Skip to main content
Find a Lawyer

Illinois Statutes Chapter 805. Business Organizations § 5/9.10. Distributions to shareholders

Current as of January 01, 2025 | Updated by Findlaw Staff

§ 9.10. Distributions to shareholders. (a) The board of directors of a corporation may authorize, and the corporation may make, distributions to its shareholders, subject to any restriction in the articles of incorporation and subject also to the limitations of subsection (c) of this Section.

(b) If not otherwise determined under Section 7.25, the record date for determining shareholders entitled to a distribution is the date of the resolution of the board of directors authorizing the distribution.

(c) No distribution may be made if, after giving it effect:

(1) the corporation would be insolvent; or

(2) the net assets of the corporation would be less than zero or less than the maximum amount payable at the time of distribution to shareholders having preferential rights in liquidation if the corporation were then to be liquidated.

(d) The board of directors may base a determination that a distribution may be made under subsection (c) either on financial statements prepared on the basis of accounting practices and principles that are reasonable in the circumstances or on a fair valuation or other method that is reasonable in the circumstances.

(e) The effect of a distribution under subsection (c) is measured as of the earlier of:

(1) the date of its authorization if payment occurs within 120 days after the date of authorization or the date of payment if payment occurs more than 120 days after the date of authorization; or

(2) in the case of distribution by purchase, redemption, or other acquisition of the corporation's shares, the earlier of (i) the date money or other property is transferred or debt incurred by the corporation or (ii) the date shareholders cease to be shareholders.

Previous Part of Code Next Part of Code
Back to Chapter List

Cite this article: FindLaw.com - Illinois Statutes Chapter 805. Business Organizations § 5/9.10. Distributions to shareholders - last updated January 01, 2025 | https://codes.findlaw.com/il/chapter-805-business-organizations/il-st-sect-805-5-9-10/

FindLaw Codes may not reflect the most recent version of the law in your jurisdiction. Please verify the status of the code you are researching with the state legislature before relying on it for your legal needs.

Was this helpful?

Welcome to FindLaw's Cases & Codes

A free source of state and federal court opinions, state laws, and the United States Code. For more information about the legal concepts addressed by these cases and statutes, visit FindLaw’s Learn About the Law.

Go to Learn About the Law

Latest Blog Posts

For Legal Professionals

Learn About The Law

Get help with your legal needs

FindLaw’s Learn About the Law features thousands of informational articles to help you understand your options. And if you’re ready to hire an attorney, find one in your area who can help.

Go to Learn About the Law

Need to Find an Attorney?

Search our directory by legal issue

Enter information in one or both fields (Required)

Copied to clipboard