An Illinois close corporation is commonly referred to as corporation that is owned, controlled and managed by a small group of people – most often family members. The Illinois Revised Statutes, on the other hand, hold that only corporations organized as close corporations, or that elect to become close corporations, are called as such. The statutory provisions of an Illinois close corporation can be found in Article 2A of the Illinois Business Corporation Act.
An Illinois close corporation is organized in the same fashion as other Illinois corporations and its Articles must meet all of the requirements established by the Business Corporation Act of 1983 and also certain requirements established by Article 2A – such as the requirement that the Articles must contain a heading declaring that name of the corporation and that is is being organized as a close corporation. The Articles may also contain optional provisions stating that the corporation’s business will be managed by the shareholders (similar to a partnership structure) instead of the board of directors; and a provision granting the shareholders the option to have the corporation dissolved at will or upon the occurrence of a specified contingent event.