Illinois Shareholder Law Survey
What follows is a brief survey of Illinois shareholder law with a focus on minority shareholder rights and relief when those rights have been ignored or violated.
Hopkins Centrich is Greater Houston’s premier firm for shareholder oppression matters. Over the decades we have provided cutting edge, high quality, creative legal solutions for minority shareholders in Texas closely held corporations when their rights have been abused by the majority owners. We have also worked with clients in law firms across the country in all manner of cases where the rights of minority shareholders have been impinged on and they have suffered loss – economic, intellectual property, goodwill, and more.
Illinois is a Statutory State
Statutory states have adopted specific statutes governing minority shareholder oppression claims in corporations. Key characteristics of statutory states regarding shareholder oppression include:
Oppression statute - The state legislature has enacted a statute expressly addressing shareholder oppression causes of action.
Statutory remedies - The law provides statutory remedies for oppression, such as dissolution or a forced buyout of the minority's shares.
What makes Illinois a Statutory State:
Oppression statute - Illinois enacted a specific shareholder oppression statute (805 ILCS 5/12.56) that provides a cause of action.
Statutory remedies - The law provides statutory remedies like dissolution or a forced buyout.
Case precedent - Illinois courts look to the language of the statute in analyzing and applying the law.
Statutory definitions - The statute defines oppressive conduct rather than relying on common law definition
Expansion of common law - The statute expands shareholder protections beyond those available under common law.
Standing requirements - The law specifies which shareholders have standing to bring an oppression claim.
Statutory burdens - Burdens of proof are allocated by the statute rather than common law principles.
Director conflicts - The law dictates when demand on the corporation may be excused due to director conflicts.
Binding precedent - The statutory law takes precedence over any contrary common law rulings.
Legislative intent - Courts attempt to interpret the statute consistent with legislative intent.