Illinois Legislature Authorizes Remote Shareholder Meetings

In response to the Covid-19 pandemic and the attendant difficulty in holding in-person meetings, the Illinois legislature recently amended the Illinois Business Corporation Act (“BCA”) to allow corporations to hold remote shareholder meetings.

On May 30, 2021, both houses of the Illinois legislature passed Senate Bill (SB) 116, which, among other things, amends Section 7.05 of the BCA to authorize fully remote as well as hybrid shareholder meetings. A hybrid shareholder meeting is one in which some shareholders are present in person and some participate remotely. Governor Pritzker signed SB 116 on August 6, 2021. The amendments take effect on January 1, 2022.

As amended, Section 7.05 now provides that, unless prohibited by the corporation’s articles of incorporation or by-laws, a corporation may allow shareholders to participate in and act at any shareholder meeting by means of remote communication that allow all persons participating in the meeting to communicate with each other.

The amendments further provide protections to ensure that persons participating remotely are actually shareholders and that those shareholders have an opportunity to meaningfully participate in the meeting. Towards those ends, amended Section 7.05 requires that, in order for a shareholder participating in a meeting remotely to be deemed present, the corporation must have implemented reasonable measures to verify that each person participating remotely is actually a shareholder. The corporation must also have implemented reasonable measures to provide shareholders participating remotely with an opportunity to participate by communicating with other shareholders, reading or hearing the proceedings, and voting.

In order to ensure that all shareholders are aware of the opportunity to participate remotely, SB 116 amends BCA Section 7.15 to provide that, if shareholders are to be provided with the opportunity to participate remotely, the notice of the meeting must state the means of remote communication through which shareholders can be deemed present and vote.

In order to further the goal of ensuring that shareholders who participate remotely have an opportunity to communicate with other shareholders, SB 116 amends BCA Section 7.30 to provide that, if the corporation elects to hold a meeting remotely, the list of shareholders entitled to vote at the meeting must be available to the shareholders through a reasonably  accessible electronic network throughout the meeting.

Many corporations have already been holding remote shareholder meetings due to the challenges to holding in-person meetings brought about by the pandemic. The Illinois BCA now provides statutory authority for remote shareholder meetings provided that reasonable measures designed to protect the integrity of the meeting are implemented. As in many other areas of business and life, as remote communication has increased efficiency and accessibility, many corporations will likely continue to hold remote shareholder meetings even after the pandemic has subsided.

Client Reviews
Sam represented our business and us personally in a contract action at a very volatile time in our lives. Not only was he knowledgeable, but his compassion and concern for us not only as clients, but as people, went above and beyond any expectations we might have had. It is very rare to find a strong legal advocate who can maintain poise, calmness, and confidence during hostile negotiations. We were listened to, consulted, and kept informed of all aspects of the litigation, and his concern for us financially was refreshing and much appreciated. We wholeheartedly give Sam our highest recommendation. Patricia
Sam and his team have worked with me and my team for years, and we could not be more satisfied. His level of comprehension of what is really being said to his attention to detail regarding the minutia of each statement has been of such value to me not only in peace of mind, but the very concrete financial results. When you have to engage an attorney for anything, you want the best person for the job, and the best person for you, Sam is absolutely both to me and my team. I have recommended both family and friends to this firm with the utmost confidence. Sam continues to serve what started as a single issue to become the go-to for all of my ventures. He's very unassuming, and quietly brilliant, and that is what we look for, delivery without the unnecessary and silly pinstripes and fake tans. I have entrusted Sam with my business for years, and will not go outside this firm. Ever. I cannot sing his praises enough. He's helped me get the best result out of a horrible situation, and is now spearheading all my companies to new heights. This firm represents the best of the legal practice, acting as council, friend and strategist. Justin P.
Sam Neschis has represented my companies for approx 7-8 years. I work in the financial / mortgage / real estate industry and overall don't trust anyone. I trust Sam, and I know and feel he is always looking out for my best welfare. Sam can service many areas in my line of work, but if Sam isn't the best suited attorney in the legal area I need help in, he always goes out to help find the proper attorney to assist me and my needs. In other words he just insn't going to bill to bill. He tells you if he can handle the file, but if he can't - Sam cares enough to send you in the proper direction. After I met Sam in person, it really sealed the deal for me. He is calm cool and collective - I like Sam as a person and as an attorney.. Thank You Sam!!!! I would recommend Sam Neschis to anyone and everyone!!!! Anonymous