Free Illinois Corporate Bylaws Template

Corporate bylaws are the internal rules an Illinois corporation adopts to govern itself. Section 2.25 of the Business Corporation Act of 1983 covers them, and it packs three separate rules into a single paragraph.

Illinois corporate bylaws are unusual in one respect. Shareholders can entrench a bylaw against the board, which is a lever most state statutes do not hand them so directly.

Section 2.25 sets the defaults, and section 2.20 handles the meeting where bylaws usually get adopted.

The Default Rule

Bylaws may be made, altered, amended, or repealed by the shareholders or the board of directors. Both groups hold the power at the same time, unless something displaces it.

The Articles Can Take It Away

That default applies unless the power to make, alter, amend, or repeal the bylaws is reserved to the shareholders by the articles of incorporation. Reserving it there removes the board from the picture entirely.

Shareholders Can Entrench a Bylaw

Here is the part worth reading twice. No bylaw adopted by the shareholders may be altered, amended, or repealed by the board of directors if the bylaws so provide. Shareholders can therefore protect a specific bylaw without amending the articles at all.

What the Bylaws May Contain

Section 2.25 closes by permitting any provisions for the regulation and management of the affairs of the corporation that are not inconsistent with law or the articles of incorporation.

Only if the bylaws stay silent about it. Section 2.25 lets shareholders block the board from touching a bylaw they adopted, provided the bylaws say so.

That protection is opt-in rather than automatic. A bylaw adopted by shareholders with no entrenchment language remains open to board amendment like any other.

Weigh it before drafting. Entrenchment gives shareholders certainty, but it also means every future change needs a shareholder vote, which is slower for a corporation that amends its rules often.

Section 2.20 sets out the organizational meetings, and the notice period is short.

1. File your articles of incorporation. Under section 2.15, corporate existence begins when the Secretary of State files them.
2. Work out which meeting applies. Where there are preincorporation subscribers and the articles name no initial directors, section 2.20(b) calls a first meeting of shareholders, who may adopt bylaws if the articles require it or they so determine.
3. Otherwise the directors adopt them. Section 2.20(c) has the first meeting of initial directors adopt bylaws if the shareholders have not.
4. Give at least three days’ written notice of an organizational meeting, unless everyone entitled to notice waives it in writing before or after.
5. Adopt the bylaws and minute the vote, noting which group acted.
6. Keep the signed copy with your corporate records and replace it after every amendment.