Sec. 7.71. Shareholder agreements.

245 words·~1 min read·/il/chapter-805/act-5/7-71

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

(a)Shareholders may unanimously agree in writing as to matters concerning the management of a corporation provided no fraud or apparent injury to the public or creditors is present, and no clearly prohibitory statutory language is violated.

(b)An agreement created pursuant to this Section is ineffective against any shareholder not a party to the agreement unless:

(1)such shareholder had actual knowledge of the agreement at the time of becoming a

shareholder; or

(2)the existence of the agreement is conspicuously referred to

(i)on the certificate

representing the security; or

(ii)on the notice sent pursuant to Section 6.35 in the case of any uncertificated security.

(c)No agreement created pursuant to this Section shall be invalid as between the parties thereto, or shall subject employees, officers, directors or shareholders to personal liability for corporation liabilities, on the basis that the agreement:

(1)is an attempt to treat the corporation as if it were a partnership or to arrange the

shareholders' relationship in a manner that would be appropriate only between partners; or

(2)so relates to the conduct of the affairs of the corporation as to interfere with the

discretion of the board of directors.

(d)Any agreement created pursuant to this Section is specifically enforceable in accordance with the principles of equity.

(e)This Section is cumulative and does not limit any statute or rule of common law that is otherwise applicable to any corporation, whenever formed.