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SB 1466

CORPORATION-INCORPORATION DATE

104th Regular Session Introduced by John Curran and 3 co-sponsors

Removes the 1981 limit and lets any Illinois corporation amend its charter to limit/eliminate cumulative voting or set special voting rights for share classes, effective 1/1/2026.

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Bill Summary · SB 1466

Summary — SB 1466 (Public Act 104‑0104)

Amendment to the Illinois Business Corporation Act (805 ILCS 5/7.40)

Main purpose

SB 1466 (enacted as Public Act 104‑0104) changes corporate voting rules by removing a temporal limitation in Section 7.40 of the Business Corporation Act of 1983. The amendment clarifies that the articles of incorporation of any corporation — regardless of its date of incorporation — may limit or eliminate cumulative voting rights, limit or deny voting rights, or provide special voting rights for any class or series of shares.

Key provisions

  • Retains the baseline rule that each outstanding share generally carries one vote and that shareholders may vote in person or by proxy.
  • Expands the existing authority (previously limited to corporations incorporated after December 31, 1981) so that:
    • The articles of incorporation of any corporation may limit or eliminate cumulative voting rights in all or specified circumstances.
    • The articles may limit or deny voting rights or create special voting rights for particular classes or series of shares.
  • Confirms that a corporation may amend its articles at any time to effect those same changes.
  • Continues the rule that, if the articles provide for more or less than one vote per share, references in the Act to a “majority” or other voting proportion refer to that number of votes rather than share count.

Statutory citation: 805 ILCS 5/7.40 (as amended). Effective date: January 1, 2026.

Who is affected

  • Shareholders, particularly minority shareholders who rely on cumulative voting to elect directors.
  • Boards of directors and corporate managers, who gain clearer authority to structure voting rights through charter provisions.
  • Corporate counsel, investor relations, proxy advisory firms, institutional investors and potential acquirers (governance and voting structures affect control dynamics and takeover defenses).

Potential impacts

  • Increases flexibility for corporations to design or alter share-class voting structures and to eliminate cumulative voting, potentially reducing a mechanism minority shareholders use to gain board representation.
  • May simplify governance changes for older corporations that previously were excluded by the 1981 incorporation‑date limitation.
  • Could affect shareholder protections, voting power distribution, and outcomes of director elections, proxy contests, and M&A negotiations.

Legislative/procedural status

  • Sponsor: Sen. Julie A. Morrison (and others listed in the bill history).
  • Enacted as Public Act 104‑0104; governor approved August 1, 2025.
  • Effective January 1, 2026.

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

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