Illinois Resolution of Directors of a Close Corporation Authorizing Redemption of Stock

• Category: Corporations - Minutes and Resolutions
• State: Multi-State
• Control #: US-02533BG
• Format: Word; Rich Text

Description

Modern corporation statutes give corporations a wide range of powers. Generally, a corporation may purchase its own stock if it is solvent. The Illinois Resolution of Directors of a Close Corporation Authorizing Redemption of Stock is a legal document that outlines the process for redeeming stock in a close corporation. It grants authority to the directors of the corporation to redeem shares and specifies the conditions and procedures that must be followed. In Illinois, there are two types of resolutions commonly used for authorizing redemption of stock in a close corporation: 1. Ordinary Resolution: An ordinary resolution is used when the redemption of stock is a routine matter that does not require any special approval. It can be passed by a simple majority vote of the directors present at a board meeting. This type of resolution is commonly used when redeeming a few shares or when the redemption is in line with the corporation's existing agreements and bylaws. 2. Special Resolution: A special resolution is required for significant or more complex redemptions of stock. It typically involves redeeming many shares, modifying existing agreements, or making substantial changes to the corporation's capital structure. A special resolution must be approved by a higher majority, usually two-thirds or three-fourths of the directors, depending on the corporation's bylaws or articles of incorporation. The Illinois Resolution of Directors of a Close Corporation Authorizing Redemption of Stock includes various key elements necessary for the redemption process: 1. Identification: The resolution starts with a clear identification of the corporation's name and registered office address. This section ensures that the resolution applies specifically to the named corporation. 2. Authorization: The resolution outlines the authority granted to the directors to redeem shares and the conditions under which this authority can be exercised. It may specify the maximum number or percentage of shares that can be redeemed and the time frame within which the redemption must occur. 3. Consideration: The resolution addresses the consideration or payment terms for the redeemed stock, including the price per share, any applicable interest rates, or any other agreed-upon forms of payment. This section ensures that shareholders receive their rightful compensation for the redeemed shares. 4. Notification: The resolution may require the directors to notify shareholders of the upcoming redemption, including the specific details of the redemption and the timeline for action. This notification is crucial to ensure transparency and give shareholders the opportunity to respond or raise any concerns. 5. Record-Keeping: The resolution may include a provision stating that the corporation's books and records shall be updated to reflect the redeemed shares and ensure accurate record-keeping for future reference. Overall, the Illinois Resolution of Directors of a Close Corporation Authorizing Redemption of Stock serves as a legal instrument through which directors exercise their authority to redeem shares. By following the guidelines set forth in the resolution, close corporations can navigate the redemption process effectively and ensure compliance with applicable laws and regulations.

The Illinois Resolution of Directors of a Close Corporation Authorizing Redemption of Stock is a legal document that outlines the process for redeeming stock in a close corporation. It grants authority to the directors of the corporation to redeem shares and specifies the conditions and procedures that must be followed. In Illinois, there are two types of resolutions commonly used for authorizing redemption of stock in a close corporation: 1. Ordinary Resolution: An ordinary resolution is used when the redemption of stock is a routine matter that does not require any special approval. It can be passed by a simple majority vote of the directors present at a board meeting. This type of resolution is commonly used when redeeming a few shares or when the redemption is in line with the corporation's existing agreements and bylaws. 2. Special Resolution: A special resolution is required for significant or more complex redemptions of stock. It typically involves redeeming many shares, modifying existing agreements, or making substantial changes to the corporation's capital structure. A special resolution must be approved by a higher majority, usually two-thirds or three-fourths of the directors, depending on the corporation's bylaws or articles of incorporation. The Illinois Resolution of Directors of a Close Corporation Authorizing Redemption of Stock includes various key elements necessary for the redemption process: 1. Identification: The resolution starts with a clear identification of the corporation's name and registered office address. This section ensures that the resolution applies specifically to the named corporation. 2. Authorization: The resolution outlines the authority granted to the directors to redeem shares and the conditions under which this authority can be exercised. It may specify the maximum number or percentage of shares that can be redeemed and the time frame within which the redemption must occur. 3. Consideration: The resolution addresses the consideration or payment terms for the redeemed stock, including the price per share, any applicable interest rates, or any other agreed-upon forms of payment. This section ensures that shareholders receive their rightful compensation for the redeemed shares. 4. Notification: The resolution may require the directors to notify shareholders of the upcoming redemption, including the specific details of the redemption and the timeline for action. This notification is crucial to ensure transparency and give shareholders the opportunity to respond or raise any concerns. 5. Record-Keeping: The resolution may include a provision stating that the corporation's books and records shall be updated to reflect the redeemed shares and ensure accurate record-keeping for future reference. Overall, the Illinois Resolution of Directors of a Close Corporation Authorizing Redemption of Stock serves as a legal instrument through which directors exercise their authority to redeem shares. By following the guidelines set forth in the resolution, close corporations can navigate the redemption process effectively and ensure compliance with applicable laws and regulations.