Close Corporations generally have stock that is held by a few people or families and the shares are rarely bought or sold. A typical close corporation will also have shareholders that have entered into agreements as to how the corporation will be run or restricting the transferability of the shares. In addition, the same individuals, or related individuals, will probably be shareholders, directors and officers. The Illinois Close Corporation statute allows the corporation to be managed by the Shareholders instead of by the Board of Directors.

But, simply having the same individuals hold each of these positions, however, does not make the corporation a close corporation.

In Illinois, being a close corporation and taking advantage of its structure means preparing the necessary documentation and making the proper statutory filings or election.

As discussed elsewhere, because the same individuals may have several different roles, it is very important that each role be maintained and the appropriate formalities be followed. For instance, because an officer carries out the management decisions of the Shareholders acting as Directors, contracts should be signed by an officer acting in the capacity as an officer.

If you have questions or are interested in creating or using a Close Corporation, please feel free to contact Mr. Cooke at (312) 497-9002 or by email at "gc@Cookeslaw.com". Mr. Cooke's fee is $300.00 per hour.