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91_SB0734eng SB734 Engrossed LRB9105965SMdv 1 AN ACT to amend the General Not For Profit Corporation 2 Act of 1986 by changing Sections 107.03, 107.05, 107.15, 3 107.75, and 108.21 and by adding Section 107.90. 4 Be it enacted by the People of the State of Illinois, 5 represented in the General Assembly: 6 Section 5. The General Not For Profit Corporation Act of 7 1986 is amended by changing Sections 107.03, 107.05, 107.15, 8 107.75, and 108.21 and by adding Section 107.90 as follows: 9 (805 ILCS 105/107.03) (from Ch. 32, par. 107.03) 10 Sec. 107.03. Members. 11 (a) A corporation may have one or more classes of 12 members or may have no members. 13 (b) If the corporation has one or more classes of 14 members, the designation of the class or classes and the 15 qualifications and rights of the members of each class shall 16 be set forth in the articles of incorporation or the bylaws. 17 The articles of incorporation or the bylaws may provide for 18 representatives or delegates of members and may establish 19 their qualifications and rights. 20 (c) If the corporation is to have no members, that fact 21 shall be set forth in the articles of incorporation or the 22 bylaws. 23 (d) A corporation may issue certificate evidencing 24 membership therein. 25 (e) The transfer of a certificate of membership in a 26 not-for-profit corporation in which assets are held for a 27 charitable, religious, eleemosynary, benevolent or 28 educational purpose, shall be without payment of any 29 consideration of money or property of any kind or value to 30 the transferor in respect to such transfer. Any transfer in 31 violation of this Section shall be void. SB734 Engrossed -2- LRB9105965SMdv 1 (f) Where the articles of incorporation or bylaws 2 provide that a corporation shall have no members, or where a 3 corporation has under its articles of incorporation, bylaws 4 or in fact no members entitled to vote on a matter, any 5 provision of this Act requiring notice to, the presence of, 6 or the vote, consent or other action by members of the 7 corporation in connection with such matter shall be satisfied 8 by notice to, the presence of, or the vote, consent or other 9 action of the directors of the corporation. 10 (g) A residential cooperative not-for-profit corporation 11 containing 50 or more single family units and located in a 12 county with a population between 780,000 and 3,000,000 shall 13 specifically set forth the qualifications and rights of its 14 members in the Articles of Incorporation and the bylaws. 15 (Source: P.A. 87-854.) 16 (805 ILCS 105/107.05) (from Ch. 32, par. 107.05) 17 Sec. 107.05. Meeting of members. (a) Meetings of 18 members may be held at such place, either within or without 19 this State, as may be provided in the bylaws or in a 20 resolution of the board of directors pursuant to authority 21 granted in the bylaws. In the absence of any such provision, 22 all meetings shall be held at the registered office of the 23 corporation in this State. 24 (b) An annual meeting of the members entitled to vote 25 may be held at such time as may be provided in the bylaws or 26 in a resolution of the board of directors pursuant to 27 authority granted in the bylaws. Failure to hold the annual 28 meeting at the designated time shall not work a forfeiture or 29 dissolution of the corporation nor affect the validity of 30 corporate action. If an annual meeting has not been held 31 within the earlier of six months after the end of the 32 corporation's fiscal year or fifteen months after its last 33 annual meeting and if, after a request in writing directed to SB734 Engrossed -3- LRB9105965SMdv 1 the president of the corporation, a notice of meeting is not 2 delivered to members entitled to vote within 60 days of such 3 request, then any member entitled to vote at an annual 4 meeting may apply to the circuit court of the county in which 5 the registered office or principal place of business of the 6 corporation is located for an order directing that the 7 meeting be held and fixing the time and place of the meeting. 8 The court may issue such additional orders as may be 9 necessary or appropriate for the holding of the meeting. 10 (c) Special meetings of the members may be called by the 11 president or by the board of directors. Special meetings of 12 the members may also be called by such other officers or 13 persons or number or proportion of members entitled to vote 14 as may be provided in the articles of incorporation or the 15 bylaws. In the absence of a provision fixing the number or 16 proportion of members entitled to vote who are entitled to 17 call a meeting, a special meeting of members entitled to vote 18 may be called by such members having one-twentieth of the 19 votes entitled to be cast at such meeting. 20 (d) Unless specifically prohibited by the articles of 21 incorporation or bylaws, members entitled to vote may 22 participate in and act at any meeting through the use of a 23 conference telephone or other communications equipment by 24 means of which all persons participating in the meeting can 25 communicate with each other. Participation in such meeting 26 shall constitute attendance and presence in person at the 27 meeting of the person or persons so participating. 28 (e) For meetings of a not-for-profit corporation 29 organized for the purpose of residential cooperative housing, 30 consisting of 50 or more single family dwellings, and located 31 in a county containing a population between 780,000 and 32 3,000,000 inhabitants, any member may record by tape, film, 33 or other means the proceedings at the meetings. The board or 34 the membership may prescribe reasonable rules and regulations SB734 Engrossed -4- LRB9105965SMdv 1 to govern the making of the recordings. The portion of any 2 meeting held to discuss violations of rules and regulations 3 of the corporation by a residential shareholder shall be 4 recorded only with the affirmative assent of that 5 shareholder. 6 (Source: P.A. 84-1423.) 7 (805 ILCS 105/107.15) (from Ch. 32, par. 107.15) 8 Sec. 107.15. Notice of members' meetings. Written 9 notice stating the place, day, and hour of the meeting and, 10 in the case of a special meeting, the purpose or purposes for 11 which the meeting is called, shall be delivered not less than 12 5 nor more than 60 days before the date of the meeting, or in 13 the case of a removal of one or more directors, a merger, 14 consolidation, dissolution or sale, lease or exchange of 15 assets not less than 20 nor more than 60 days before the date 16 of the meeting, by or at the direction of the president, or 17 the secretary, or the officer or persons calling the meeting, 18 to each member of record entitled to vote at such meeting. A 19 residential cooperative not-for-profit corporation containing 20 50 or more single family units and located in a county with a 21 population between 780,000 and 3,000,000 shall, in addition 22 to the other requirements of this Section, post notice of 23 member's meetings in conspicuous places in the residential 24 cooperative at least 48 hours prior to the meeting of the 25 members. 26 (Source: P.A. 84-1423.) 27 (805 ILCS 105/107.75) (from Ch. 32, par. 107.75) 28 Sec. 107.75. Books and records. 29 (a) Each corporation shall keep correct and complete 30 books and records of account and shall also keep minutes of 31 the proceedings of its members, board of directors and 32 committees having any of the authority of the board of SB734 Engrossed -5- LRB9105965SMdv 1 directors; and shall keep at its registered office or 2 principal office a record giving the names and addresses of 3 its members entitled to vote. All books and records of a 4 corporation may be inspected by any member entitled to vote, 5 or that member's agent or attorney, for any proper purpose at 6 any reasonable time. 7 (b) A residential cooperative not-for-profit corporation 8 containing 50 or more single family units and located in a 9 county with a population between 780,000 and 3,000,000 shall 10 keep an accurate and complete account of all transfers of 11 membership and shall, on a quarterly basis, record all 12 transfers of membership with the county clerk of the county 13 in which the residential cooperative is located. 14 Additionally, a list of all transfers of membership shall be 15 available for inspection by any member of the corporation. 16 (Source: P.A. 84-1423.) 17 (805 ILCS 105/107.90 new) 18 Sec. 107.90. Not-for-profit residential cooperative. 19 (a) As used in this Section: 20 "Member" includes the plural "members", where a 21 membership is jointly held. 22 "Membership agreement" means the contract and other 23 documents that define the rights of the member to occupy, 24 use, or possess a portion or all of a parcel of real 25 estate exclusively. 26 "Class of membership" means a grouping of members 27 based on the same privileges, rights, and manner of 28 treatment by the corporation. 29 (b) The provisions of this Section apply only to a 30 not-for-profit corporation organized for the purpose of 31 residential cooperative housing consisting of 50 or more 32 single family dwellings, located in a county containing a 33 population between 780,000 and 3,000,000 inhabitants, and for SB734 Engrossed -6- LRB9105965SMdv 1 which the title to one or more member's parcels is held by 2 the corporation. 3 (c) If (i) title for real property occupied or 4 controlled by a member under a membership agreement is held 5 by or is transferred to that member; (ii) more than one class 6 of membership exists; or (iii) the corporation fails to 7 obtain recognition or loses recognition as a Cooperative 8 Housing Corporation under Section 216 of the Internal Revenue 9 Code of 1954, as amended, then: 10 (1) The board of directors shall issue notice to 11 the members within 10 days after obtaining knowledge of 12 (i), (ii), or (iii), or within 10 days after the 13 effective date of this amendatory Act of the 91st General 14 Assembly, if the board obtained such knowledge before the 15 effective date of this amendatory Act of the 91st General 16 Assembly. 17 (2) At the member's option, any member may receive 18 a warranty deed for full title to the real property that 19 he or she occupies issued by the not-for-profit 20 corporation, upon presentation of a notarized and written 21 request to the corporation, provided that the corporation 22 holds the title. 23 (3) The member may withdraw from the corporation, 24 at the member's option. The member shall retain his or 25 her interest in any common property held by the 26 corporation or may transfer his or her interest to the 27 corporation for fair value, at the member's option. 28 (805 ILCS 105/108.21) (from Ch. 32, par. 108.21) 29 Sec. 108.21. Meetings of the board of directors of a 30 residential cooperative not-for-profit corporation containing 31 24 or more units and located in a city containing more than 32 1,000,000 inhabitants or containing 50 or more single family 33 units and located in a county with a population between SB734 Engrossed -7- LRB9105965SMdv 1 780,000 and 3,000,000 inhabitants shall be open to any 2 member, except for the portion of any meeting held (i) to 3 discuss litigation when an action against or on behalf of the 4 corporation has been filed and is pending in a court or 5 administrative tribunal, or when the board of directors finds 6 that such an action is probable or imminent, (ii) to consider 7 information regarding appointment, employment or dismissal of 8 an employee, or (iii) to discuss violations of rules and 9 regulations of the corporation by a residential shareholder. 10 Any member may record by tape, film or other means the 11 proceedings at such meetings or portions thereof required to 12 be open by this Section. The board may prescribe reasonable 13 rules and regulations to govern the right to make such 14 recordings. Notice of such meetings shall be mailed or 15 delivered at least 48 hours prior thereto, unless a written 16 waiver of such notice is signed by the person or persons 17 entitled to such notice pursuant to the articles of 18 incorporation, bylaws, other instrument before the meeting is 19 convened. Copies of notices of meetings of the board of 20 directors shall be posted in entranceways, elevators, or 21 other conspicuous places in the residential cooperative at 22 least 48 hours prior to the meeting of the board of 23 directors. If there is no common entranceway for 7 or more 24 apartments, the board of directors may designate one or more 25 locations in the proximity of such units where the notices of 26 meetings shall be posted. For purposes of this Section, 27 "meeting of the board of directors" means any gathering of a 28 quorum of the members of the board of directors of the 29 residential cooperative held for the purpose of discussing 30 business of the cooperative. The provisions of this Section 31 shall apply to any residential cooperative containing 24 or 32 more units and located in a city containing more than 33 1,000,000 inhabitants or containing 50 or more single family 34 units and located in a county with a population between SB734 Engrossed -8- LRB9105965SMdv 1 780,000 and 3,000,000 inhabitants situated in the State of 2 Illinois regardless of where such cooperative may be 3 incorporated. 4 (Source: P.A. 84-1423.) 5 Section 99. Effective date. This Act takes effect upon 6 becoming law.