Sec. 2A.40. Written agreements as to conduct of certain affairs of corporation.

342 words·~2 min read·/il/chapter-805/act-5/2a-40

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

(a)All shareholders of a close corporation may enter into a written agreement, relating to any phase of the affairs of the corporation, including, but not limited to, the following:

(1)Management of the business of the corporation.

(2)Declaration and payment of dividends or division of profits.

(3)Who shall be officers or directors, or both, of the corporation.

(4)Restrictions on transfer of shares specified pursuant to paragraph

(s)of Section

1.80.

(5)Voting requirements, including the requirements of unanimous voting of shareholders

or directors.

(6)Employment of shareholders by the corporation.

(7)Arbitration of issues as to which the shareholders are deadlocked in voting power or

as to which the directors are deadlocked and the shareholders are unable to break the deadlock.

(b)No written agreement to which shareholders of a close corporation have actually assented, whether embodied in the articles of incorporation or bylaws of the corporation or in any separate written agreement and which relates to any phase of the affairs of the corporation, whether to the management of its business or division of its profits or otherwise, shall be invalid as between the parties thereto, on the ground that it is an attempt by the parties thereto to treat the corporation as if it were a partnership or to arrange their relationships in a manner that would be appropriate only between partners.

(c)If the business of a close corporation is managed by a board of directors, an agreement among all of the shareholders, whether solely among themselves or between all of them and a party who is not a shareholder, is not invalid, as among the parties thereto, on the ground that it so relates to the conduct of the affairs of the corporation as to interfere with the discretion of the board of directors, but the making of such an agreement shall impose upon the shareholders the liability for managerial acts that is imposed by the laws of this State upon directors.