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HB 2924

CORPORATION-INCORPORATION DATE

104th Regular Session Introduced by Jen Gong-Gershowitz and 2 co-sponsors

Illinois HB 2924 amends the Business Corporation Act to let corporations limit or eliminate cumulative voting and set special voting rights for stock classes.

Rule 19(a) / Re-referred to Rules Committee
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Bill Summary · HB 2924

Summary — HB 2924 (mixed materials received)

Note: The materials provided appear to include text from two different HB 2924 bills in two jurisdictions. Below are separate, concise summaries for each bill as presented.

Arizona — HB 2924 (Rep. Mae Peshlakai)

Title in materials: “TRADE; COMMERCE; DECEPTIVE METHODS; PRICING” — adds a consumer‑fraud provision to A.R.S. Title 44

Main purpose

Adds a new statutory section (proposed A.R.S. § 44‑1535) that makes a long list of unfair or deceptive practices unlawful when selling goods or services in Arizona. The provision codifies many specific misrepresentations and business practices commonly regarded as consumer fraud.

Key provisions / changes

  • Creates a non‑exhaustive list (numbered subsections) of prohibited deceptive or unfair acts, including:
    • False or misleading claims about source, sponsorship, approval, certification, geographic origin, characteristics, ingredients, uses, benefits, quality, grade, style or model.
    • Misrepresenting goods as new when they are used, altered, reconditioned or deteriorated.
    • False statements about price reductions or rebates.
    • Misrepresentations that repairs, parts or services are needed when they are not.
    • Deceptive sales tactics (bait‑and‑switch, advertising without intent to supply demand, coercion, claiming false authority for sales agents).
    • Failing to disclose material facts a consumer could not reasonably know.
    • Improper disclaimers or limitations of implied warranties unless clearly and conspicuously disclosed.
    • Misleading environmental claims (recycled, recyclable, degradable) — sets a specific 360‑day definition for “degradable” in one subsection and requires certain decomposition standards for claims like “biodegradable” or “photodegradable.”
    • Requirements for prize/contest disclosures tied to sales presentations (e.g., written disclosure in bold 10‑point font; cash value; terms; description of offered items and price range).
    • Other items: improper waivers of legal rights, failure to promptly refund deposits when transactions are canceled, exploiting disabilities or illiteracy, charging grossly excessive prices, etc.
  • The text as provided enumerates many detailed examples but does not include the enforcement mechanism, remedies, or penalty language in the excerpt.

Who is affected

  • Retailers, manufacturers, advertisers, service providers, sales agents, and anyone engaged in consumer transactions in Arizona.
  • Consumers would gain clearer statutory protection against specific deceptive practices (enforcement mechanism not shown in excerpt).
  • Potential compliance impacts for businesses (policy, advertising, packaging, disclosures, sales training).

Procedural status / timeline

  • Filed: February 18, 2025.
  • Status: Rule 19(a) / Re‑referred to Rules Committee (referred April 11, 2025). Other committee activity not shown in provided excerpt.
  • Primary sponsor: Rep. Mae Peshlakai.

Illinois — HB 2924 (Rep. Bob Morgan)

Topic in materials: Amendment to the Business Corporation Act of 1983 (805 ILCS 5/7.40) — voting rights and cumulative voting

Main purpose

Amends Section 7.40 of the Illinois Business Corporation Act to clarify/expand the ability of a corporation’s articles of incorporation (or amendments thereto) to limit or eliminate cumulative voting rights and to limit, deny, or provide special voting rights for any class or series of shares.

Key provisions / changes

  • Current law (as cited) previously treated corporations incorporated after December 31, 1981, differently with respect to whether articles may limit or eliminate cumulative voting. The amendment:
    • Provides that the articles of incorporation of any corporation (not limited by incorporation date) may limit or eliminate cumulative voting rights in whole or in part.
    • Allows articles (and amendments to articles at any time) to limit or deny voting rights or to create special voting rights for any class or series of shares.
    • Clarifies that where articles provide for more or fewer votes per share, references to “majority” in the Act refer to the majority of votes entitled to be cast (not merely the majority of shares).
  • Overall effect: explicitly authorizes corporations to set voting regimes (including eliminating cumulative voting) by their articles or amendments, regardless of incorporation date.

Who is affected

  • Corporations formed or doing business under Illinois law.
  • Shareholders, particularly minority shareholders who use cumulative voting to elect directors and obtain board representation.
  • Corporate counsel, investor relations, and governance advisors — may influence structuring of articles of incorporation and shareholder rights.

Potential impact

  • May reduce statutory protection of minority shareholders by allowing elimination of cumulative voting through a corporation’s governing documents.
  • Increases flexibility for corporate structuring of voting rights and classes/series of stock.
  • Could affect capital raising and investor negotiations where voting protections are a bargaining point.

Procedural status / timeline (materials)

  • Introduced: February 6, 2025 by Rep. Bob Morgan.
  • Committee: Assigned to Judiciary – Civil; reported Do Pass (Short Debate) March 12, 2025.
  • Placed on calendar and read in the House (readings listed in February–March 2025).
  • Co‑sponsors added: Reps. Curtis J. Tarver, II and Jennifer Gong‑Gershowitz (dates noted).

If you want, I can:
- Pull out a side‑by‑side comparison of how the Illinois change would alter existing statutory language and examples of likely corporate responses; or
- Draft a short memo identifying likely enforcement authorities, penalties and next steps for the Arizona consumer‑fraud text (based on typical Arizona enforcement practice) if you provide direction.

Compiled from official sources — confirm details with the bill’s official record.

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