Illinois § 9.05

§ 9.05.

Power of corporation to acquire its own shares. (a) A corporation may acquire its own shares, subject to limitations set forth in Section 9.10 of this Act. (b) If a corporation acquires its own shares after the effective date of this amendatory Act of 1993, the shares constitute treasury shares until cancelled as provided by subsection (d) of this Section. (c) A corporation shall file a report under Section 14.25 of this Act in the case of its acquisition of its own shares that occurs either prior to January 1, 1991 or on or prior to the last day of the third month immediately preceding the corporation's anniversary month in 1991. A corporation shall file a report under Section 14.30 of this Act in the case of its acquisition and cancellation of its own shares that occurs after both December 31, 1990 and the last day of such third month. However, if the articles of incorporation provide that the number of authorized shares is reduced by an acquisition and cancellation of shares, then the corporation shall, within 60 days after the date of acquisition, execute and file in duplicate in accordance with Section 1.10 of this Act, a statement of cancellation which sets forth: (1) The name of the corporation. (2) The aggregate number of shares which the corporation has authority to issue, itemized by classes and series, if any, within a class before giving effect to the cancellation. (3) The aggregate number of issued shares, itemized by classes and series, if any, within a class before giving effect to the cancellation. (4) The number of shares cancelled, itemized by classes and series, if any, within a class. (5) The aggregate number of shares which the corporation has the authority to issue, itemized by classes and series, if any, within a class after giving effect to the cancellation. (6) The aggregate number of issued shares, itemized by classes and series, if any, within a class, after giving effect to the cancellation. (7) A statement, expressed in dollars, of the amount of the paid-in capital of the corporation before giving effect to the cancellation. (8) A statement, expressed in dollars, of the amount of the paid-in capital of the corporation after giving effect to the cancellation. Upon the filing of the statement of cancellation by the Secretary of State, the paid-in capital of the corporation shall be deemed to be reduced by that part of the paid-in capital which was, at the time of the cancellation, represented by the shares so cancelled, to the extent of the cost from the paid-in capital of the reacquired and cancelled shares or a lesser amount as may be elected by the corporation, and the statement of cancellation shall operate as an amendment to the articles of incorporation so as to reduce the number of authorized shares by the number of shares so cancelled. (d) A corporation, by resolution of the board of directors, may cancel any of its treasury shares. When cancelled, the shares shall constitute authorized but unissued shares unless the articles of incorporation provide that the shares shall not be reissued, in which case the number of authorized shares shall be reduced by the number of shares cancelled. (e) Until the report required by subsection (c) of this Section, or the report required by Section 14.25 or Section 14.30 of this Act reporting a reduction in paid-in capital, shall have been filed in the office of the Secretary of State, the basis of the annual franchise tax payable by the corporation shall not be reduced, provided, however, in no event shall the annual franchise tax for any taxable year be reduced if such report is not filed prior to the first day of the anniversary month or, in the case of a corporation which has established an extended filing month, the extended filing month of that taxable year and before payment of its annual franchise tax. (Source: P.A. 94-605, eff. 1-1-06.)