Bill Text: IL HB3270 | 2019-2020 | 101st General Assembly | Introduced

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Bill Title: Amends the Business Corporation Act of 1983. Increases from $200 to $500 the minimum base penalty for transacting business in this State without authority. Provides that a corporation that effects a change in the number of issued shares or the amount of paid-in capital prior to January 1, 2020, rather than effecting a change at any time, shall file a report regarding the issued shares or paid-in capital. Provides that franchise taxes are not payable on or after January 1, 2020. Provides that on and after January 1, 2020, a corporation that fails to file an annual report shall pay a penalty of $50 plus $10 per month or part of a month that the report is delinquent.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2019-03-29 - Rule 19(a) / Re-referred to Rules Committee [HB3270 Detail]

Download: Illinois-2019-HB3270-Introduced.html

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101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 HB3270 Introduced , by Rep. Michael T. Marron SYNOPSIS AS INTRODUCED:
805 ILCS 5/13.70 from Ch. 32, par. 13.70
805 ILCS 5/14.30 from Ch. 32, par. 14.30
805 ILCS 5/15.35 from Ch. 32, par. 15.35
805 ILCS 5/15.65 from Ch. 32, par. 15.65
805 ILCS 5/15.97 from Ch. 32, par. 15.97
805 ILCS 5/16.05 from Ch. 32, par. 16.05
Amends the Business Corporation Act of 1983. Increases from $200 to $500 the minimum base penalty for transacting business in this State without authority. Provides that a corporation that effects a change in the number of issued shares or the amount of paid-in capital prior to January 1, 2020, rather than effecting a change at any time, shall file a report regarding the issued shares or paid-in capital. Provides that franchise taxes are not payable on or after January 1, 2020. Provides that on and after January 1, 2020, a corporation that fails to file an annual report shall pay a penalty of $50 plus $10 per month or part of a month that the report is delinquent.
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FISCAL NOTE ACT MAY APPLY
A BILL FOR
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AN ACT concerning business.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Business Corporation Act of 1983 is amended
by changing Sections 13.70, 14.30, 15.35, 15.65, 15.97, and
16.05 as follows:
(805 ILCS 5/13.70) (from Ch. 32, par. 13.70)
Sec. 13.70. Transacting business without authority.
(a) No foreign corporation transacting business in this
State without authority to do so is permitted to maintain a
civil action in any court of this State, until the corporation
obtains that authority. Nor shall a civil action be maintained
in any court of this State by any successor or assignee of the
corporation on any right, claim or demand arising out of the
transaction of business by the corporation in this State, until
authority to transact business in this State is obtained by the
corporation or by a corporation that has acquired all or
substantially all of its assets.
(b) The failure of a foreign corporation to obtain
authority to transact business in this State does not impair
the validity of any contract or act of the corporation, and
does not prevent the corporation from defending any action in
any court of this State.

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(c) A foreign corporation that transacts business in this
State without authority is liable to this State, for the years
or parts thereof during which it transacted business in this
State without authority, in an amount equal to all fees,
franchise taxes, penalties and other charges that would have
been imposed by this Act upon the corporation had it duly
applied for and received authority to transact business in this
State as required by this Act, but failed to pay the franchise
taxes that would have been computed thereon, and thereafter
filed all reports required by this Act; and, if a corporation
fails to file an application for authority within 60 days after
it commences business in this State, in addition thereto it is
liable for a penalty of either 10% of the filing fee, license
fee and franchise taxes or $500 $200 plus $25 $5.00 for each
month or fraction thereof in which it has continued to transact
business in this State without authority therefor, whichever
penalty is greater. The Attorney General shall bring
proceedings to recover all amounts due this State under this
Section.
(d) The Attorney General shall bring an action to restrain
a foreign corporation from transacting business in this State,
if the authority of the foreign corporation to transact
business has been revoked under subsection (m) of Section 13.50
of this Act.
(Source: P.A. 95-515, eff. 8-28-07.)

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(805 ILCS 5/14.30) (from Ch. 32, par. 14.30)
Sec. 14.30. Cumulative report of changes in issued shares
or paid-in capital.
(a) Each domestic corporation and each foreign corporation
authorized to transact business in this State that effects any
change in the number of issued shares or the amount of paid-in
capital prior to January 1, 2020 that has not theretofore been
reported in any report other than an annual report, interim
annual report, or final transition annual report, shall execute
and file, in accordance with Section 1.10 of this Act, a report
with respect to the changes in its issued shares or paid-in
capital:
(1) that have occurred subsequent to the last day of
the third month preceding its anniversary month in the
preceding year and prior to the first day of the second
month immediately preceding its anniversary month in the
current year; or
(2) in the case of a corporation that has established
an extended filing month, that have occurred during its
fiscal year; or
(3) in the case of a statutory merger or consolidation
or an amendment to the corporation's articles of
incorporation that affects the number of issued shares or
the amount of paid-in capital, that have occurred between
the last day of the third month immediately preceding its
anniversary month and the date of the merger,

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consolidation, or amendment or, in the case of a
corporation that has established an extended filing month,
that have occurred between the first day of its fiscal year
and the date of the merger, consolidation, or amendment; or
(4) in the case of a statutory merger or consolidation
or an amendment to the corporation's articles of
incorporation that affects the number of issued shares or
the amount of paid-in capital, that have occurred between
the date of the merger, consolidation, or amendment (but
not including the merger, consolidation, or amendment) and
the first day of the second month immediately preceding its
anniversary month in the current year, or in the case of a
corporation that has established an extended filing month,
that have occurred between the date of the merger,
consolidation or amendment (but not including the merger,
consolidation or amendment) and the last day of its fiscal
year.
(b) The corporation shall file the report required under
subsection (a) not later than (i) the time its annual report is
required to be filed in 1992 and in each subsequent year and
(ii) not later than the time of filing the articles of merger,
consolidation, or amendment to the articles of incorporation
that affects the number of issued shares or the amount of
paid-in capital of a domestic corporation or the certified copy
of merger of a foreign corporation.
(c) The report shall net decreases against increases that

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occur during the same taxable period. The report shall set
forth:
(1) The name of the corporation and the state or
country under the laws of which it is organized.
(2) A statement of the aggregate number of shares which
the corporation has authority to issue, itemized by classes
and series, if any, within a class.
(3) A statement of the aggregate number of issued
shares as last reported to the Secretary of State in any
document required or permitted by this Act to be filed,
other than an annual report, interim annual report or final
transition annual report, itemized by classes and series,
if any, within a class.
(4) A statement, expressed in dollars, of the amount of
paid-in capital of the corporation as last reported to the
Secretary of State in any document required or permitted by
this Act to be filed, other than an annual report, interim
annual report or final transition annual report.
(5) A statement, if applicable, of the aggregate number
of shares issued by the corporation not theretofore
reported to the Secretary of State as having been issued,
and a statement, expressed in dollars, of the value of the
entire consideration received, less expenses, including
commissions, paid or incurred in connection with the
issuance, for, or on account of, the issuance of the
shares, itemized by classes, and series, if any, within a

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class; and in the case of shares issued as a share
dividend, the amount added or transferred to the paid-in
capital of the corporation for, or on account of, the
issuance of the shares; provided, however, that the report
shall also include the date of each issuance made prior to
the current reporting period, and the number of issued
shares and consideration received in each case.
(6) A statement, if applicable, expressed in dollars,
of the amount added or transferred to paid-in capital of
the corporation without the issuance of shares; provided,
however, that the report shall also include the date of
each increase made prior to the current reporting period,
and the consideration received in each case.
(7) In case of an exchange or reclassification of
issued shares resulting in an increase in the amount of
paid-in capital, a statement of the manner in which it was
effected, and a statement, expressed in dollars, of the
amount added or transferred to the paid-in capital of the
corporation as a result thereof, except any portion thereof
reported under any other subsection of this Section as a
part of the consideration received by the corporation for,
or on account of, its issued shares; provided, however,
that the report shall also include the date of each
exchange or reclassification made prior to the current
reporting period and the consideration received in each
case.

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(8) If the consideration received for the issuance of
any shares not theretofore reported as having been issued
consists of labor or services performed or of property,
other than cash, then a statement, expressed in dollars, of
the value of that consideration as fixed by the board of
directors.
(9) In the case of a cancellation of shares or a
reduction in paid-in capital made pursuant to Section 9.20,
the aggregate reduction in paid-in capital; provided,
however, that the report shall also include the date of
each reduction made prior to the current reporting period.
(10) A statement of the aggregate number of issued
shares itemized by classes and series, if any, within a
class, after giving effect to the changes reported.
(11) A statement, expressed in dollars, of the amount
of paid-in capital of the corporation after giving effect
to the changes reported.
(d) No additional license fees or franchise taxes shall be
payable upon the filing of the report to the extent that
license fees or franchise taxes shall have been previously paid
by the corporation in respect of shares previously issued which
are being exchanged for the shares the issuance of which is
being reported, provided those facts are shown in the report.
(e) The report shall be made on forms prescribed and
furnished by the Secretary of State.
(f) Until the report under this Section or a report under

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Section 14.25 shall have been filed in the Office of the
Secretary of State showing a reduction in paid-in capital, the
basis of the annual franchise tax payable by the corporation
shall not be reduced, provided, however, in no event shall the
annual franchise tax for any taxable year be reduced if the
report is not filed prior to the first day of the anniversary
month or, in the case of a corporation which has established an
extended filing month, the extended filing month of the
corporation of that taxable year and before payment of its
annual franchise tax.
(Source: P.A. 90-421, eff. 1-1-98.)
(805 ILCS 5/15.35) (from Ch. 32, par. 15.35)
Sec. 15.35. Franchise taxes payable by domestic
corporations. For the privilege of exercising its franchises in
this State, each domestic corporation shall pay to the
Secretary of State the following franchise taxes, computed on
the basis, at the rates and for the periods prescribed in this
Act:
(a) An initial franchise tax at the time of filing its
first report of issuance of shares.
(b) An additional franchise tax at the time of filing
(1) a report of the issuance of additional shares, or (2) a
report of an increase in paid-in capital without the
issuance of shares, or (3) an amendment to the articles of
incorporation or a report of cumulative changes in paid-in

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capital, whenever any amendment or such report discloses an
increase in its paid-in capital over the amount thereof
last reported in any document, other than an annual report,
interim annual report or final transition annual report
required by this Act to be filed in the office of the
Secretary of State.
(c) An additional franchise tax at the time of filing a
report of paid-in capital following a statutory merger or
consolidation, which discloses that the paid-in capital of
the surviving or new corporation immediately after the
merger or consolidation is greater than the sum of the
paid-in capital of all of the merged or consolidated
corporations as last reported by them in any documents,
other than annual reports, required by this Act to be filed
in the office of the Secretary of State; and in addition,
the surviving or new corporation shall be liable for a
further additional franchise tax on the paid-in capital of
each of the merged or consolidated corporations as last
reported by them in any document, other than an annual
report, required by this Act to be filed with the Secretary
of State from their taxable year end to the next succeeding
anniversary month or, in the case of a corporation which
has established an extended filing month, the extended
filing month of the surviving or new corporation; however
if the taxable year ends within the 2 month period
immediately preceding the anniversary month or, in the case

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of a corporation which has established an extended filing
month, the extended filing month of the surviving or new
corporation the tax will be computed to the anniversary
month or, in the case of a corporation which has
established an extended filing month, the extended filing
month of the surviving or new corporation in the next
succeeding calendar year.
(d) An annual franchise tax payable each year with the
annual report which the corporation is required by this Act
to file.
The provisions of this Section shall not apply to require
the payment of any franchise tax that would otherwise have been
due and payable on or after January 1, 2020. There shall be no
refunds or proration of franchise tax for any taxes due and
payable prior to January 1, 2020 on the basis that a portion of
the corporation's taxable year extends beyond January 1, 2020.
This amendatory Act of the 101st General Assembly shall not
affect any right accrued or established, or any liability or
penalty incurred prior to January 1, 2020.
(Source: P.A. 86-985.)
(805 ILCS 5/15.65) (from Ch. 32, par. 15.65)
Sec. 15.65. Franchise taxes payable by foreign
corporations. For the privilege of exercising its authority to
transact such business in this State as set out in its
application therefor or any amendment thereto, each foreign

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corporation shall pay to the Secretary of State the following
franchise taxes, computed on the basis, at the rates and for
the periods prescribed in this Act:
(a) An initial franchise tax at the time of filing its
application for authority to transact business in this
State.
(b) An additional franchise tax at the time of filing
(1) a report of the issuance of additional shares, or (2) a
report of an increase in paid-in capital without the
issuance of shares, or (3) a report of cumulative changes
in paid-in capital or a report of an exchange or
reclassification of shares, whenever any such report
discloses an increase in its paid-in capital over the
amount thereof last reported in any document, other than an
annual report, interim annual report or final transition
annual report, required by this Act to be filed in the
office of the Secretary of State.
(c) Whenever the corporation shall be a party to a
statutory merger and shall be the surviving corporation, an
additional franchise tax at the time of filing its report
following merger, if such report discloses that the amount
represented in this State of its paid-in capital
immediately after the merger is greater than the aggregate
of the amounts represented in this State of the paid-in
capital of such of the merged corporations as were
authorized to transact business in this State at the time

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of the merger, as last reported by them in any documents,
other than annual reports, required by this Act to be filed
in the office of the Secretary of State; and in addition,
the surviving corporation shall be liable for a further
additional franchise tax on the paid-in capital of each of
the merged corporations as last reported by them in any
document, other than an annual report, required by this Act
to be filed with the Secretary of State, from their taxable
year end to the next succeeding anniversary month or, in
the case of a corporation which has established an extended
filing month, the extended filing month of the surviving
corporation; however if the taxable year ends within the 2
month period immediately preceding the anniversary month
or the extended filing month of the surviving corporation,
the tax will be computed to the anniversary or, extended
filing month of the surviving corporation in the next
succeeding calendar year.
(d) An annual franchise tax payable each year with any
annual report which the corporation is required by this Act
to file.
The provisions of this Section shall not apply to require
the payment of any franchise tax that would otherwise have been
due and payable on or after January 1, 2020. There shall be no
refunds or proration of franchise tax for any taxes due and
payable prior to January 1, 2020 on the basis that a portion of
the corporation's taxable year extends beyond January 1, 2020.

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This amendatory Act of the 101st General Assembly shall not
affect any right accrued or established, or any liability or
penalty incurred prior to January 1, 2020.
(Source: P.A. 92-33, eff. 7-1-01.)
(805 ILCS 5/15.97) (from Ch. 32, par. 15.97)
Sec. 15.97. Corporate Franchise Tax Refund Fund.
(a) Beginning July 1, 1993, a percentage of the amounts
collected under Sections 15.35, 15.45, 15.65, and 15.75 of this
Act shall be deposited into the Corporate Franchise Tax Refund
Fund, a special Fund hereby created in the State treasury. From
July 1, 1993, until December 31, 1994, there shall be deposited
into the Fund 3% of the amounts received under those Sections.
Beginning January 1, 1995, and for each fiscal year beginning
thereafter, 2% of the amounts collected under those Sections
during the preceding fiscal year shall be deposited into the
Fund.
(b) Beginning July 1, 1993, moneys in the Fund shall be
expended exclusively for the purpose of paying refunds payable
because of overpayment of franchise taxes, penalties, or
interest under Sections 13.70, 15.35, 15.45, 15.65, 15.75, and
16.05 of this Act and making transfers authorized under this
Section. Refunds in accordance with the provisions of
subsections (f) and (g) of Section 1.15 and Section 1.17 of
this Act may be made from the Fund only to the extent that
amounts collected under Sections 15.35, 15.45, 15.65, and 15.75

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of this Act have been deposited in the Fund and remain
available. On or before August 31 of each year, the balance in
the Fund in excess of $100,000 shall be transferred to the
General Revenue Fund. Notwithstanding the above, for the period
commencing on the effective date of this amendatory Act of the
101st General Assembly and continuing through December 31,
2021, amounts in the Fund shall not be transferred to the
General Revenue Fund and shall be used to pay refunds in
accordance with the provisions of this Act. Within a reasonable
time after January 1, 2022, the Secretary of State shall direct
and the Comptroller shall order transferred to the General
Revenue Fund all amounts remaining in the Fund.
(c) This Act shall constitute an irrevocable and continuing
appropriation from the Corporate Franchise Tax Refund Fund for
the purpose of paying refunds upon the order of the Secretary
of State in accordance with the provisions of this Section.
(Source: P.A. 99-620, eff. 1-1-17.)
(805 ILCS 5/16.05) (from Ch. 32, par. 16.05)
Sec. 16.05. Penalties and interest imposed upon
corporations.
(a) Each corporation, domestic or foreign, that fails or
refuses to file any annual report or report of cumulative
changes in paid-in capital and pay any franchise tax due
pursuant to the report prior to the first day of its
anniversary month or, in the case of a corporation which has

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established an extended filing month, the extended filing month
of the corporation shall pay a penalty of 10% of the amount of
any delinquent franchise tax due for the report. From February
1, 2008 through March 15, 2008, no penalty shall be imposed
with respect to any amount of delinquent franchise tax paid
pursuant to the Franchise Tax and License Fee Amnesty Act of
2007. Notwithstanding the above, commencing on January 1, 2020,
each corporation, domestic or foreign, that fails or refuses to
file any annual report prior to the first day of its
anniversary month, or in the case of a corporation which has
established an extended filing month, the extended filing month
of the corporation, shall pay a penalty of $50 plus $10 for
each calendar month or part of the month that it is delinquent.
(b) Each corporation, domestic or foreign, that fails or
refuses to file a report of issuance of shares or increase in
paid-in capital within the time prescribed by this Act is
subject to a penalty on any obligation occurring prior to
January 1, 1991, and interest on those obligations on or after
January 1, 1991, for each calendar month or part of month that
it is delinquent in the amount of 2% of the amount of license
fees and franchise taxes provided by this Act to be paid on
account of the issuance of shares or increase in paid-in
capital. From February 1, 2008 through March 15, 2008, no
penalty shall be imposed, or interest charged, with respect to
any amount of delinquent license fees and franchise taxes paid
pursuant to the Franchise Tax and License Fee Amnesty Act of

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2007.
(c) Each corporation, domestic or foreign, that fails or
refuses to file a report of cumulative changes in paid-in
capital or report following merger within the time prescribed
by this Act is subject to interest on or after January 1, 1992,
for each calendar month or part of month that it is delinquent,
in the amount of 2% of the amount of franchise taxes provided
by this Act to be paid on account of the issuance of shares or
increase in paid-in capital disclosed on the report of
cumulative changes in paid-in capital or report following
merger, or $1, whichever is greater. From February 1, 2008
through March 15, 2008, no interest shall be charged with
respect to any amount of delinquent franchise tax paid pursuant
to the Franchise Tax and License Fee Amnesty Act of 2007.
Notwithstanding the above, commencing on January 1, 2020, each
corporation, domestic or foreign, that fails or refuses to file
any report following merger within the time prescribed by this
Act, shall pay a penalty of $50 plus $10 for each calendar
month or part of the month that it is delinquent.
(d) If the annual franchise tax, or the supplemental annual
franchise tax for any 12-month period commencing July 1, 1968,
or July 1 of any subsequent year through June 30, 1983,
assessed in accordance with this Act, is not paid by July 31,
it is delinquent, and there is added a penalty prior to January
1, 1991, and interest on and after January 1, 1991, of 2% for
each month or part of month that it is delinquent commencing

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with the month of August, or $1, whichever is greater. From
February 1, 2008 through March 15, 2008, no penalty shall be
imposed, or interest charged, with respect to any amount of
delinquent franchise taxes paid pursuant to the Franchise Tax
and License Fee Amnesty Act of 2007.
(e) If the supplemental annual franchise tax assessed in
accordance with the provisions of this Act for the 12-month
period commencing July 1, 1967, is not paid by September 30,
1967, it is delinquent, and there is added a penalty prior to
January 1, 1991, and interest on and after January 1, 1991, of
2% for each month or part of month that it is delinquent
commencing with the month of October, 1967. From February 1,
2008 through March 15, 2008, no penalty shall be imposed, or
interest charged, with respect to any amount of delinquent
franchise taxes paid pursuant to the Franchise Tax and License
Fee Amnesty Act of 2007.
(f) If any annual franchise tax for any period beginning on
or after July 1, 1983, is not paid by the time period herein
prescribed, it is delinquent and there is added a penalty prior
to January 1, 1991, and interest on and after January 1, 1991,
of 2% for each month or part of a month that it is delinquent
commencing with the anniversary month or in the case of a
corporation that has established an extended filing month, the
extended filing month, or $1, whichever is greater. From
February 1, 2008 through March 15, 2008, no penalty shall be
imposed, or interest charged, with respect to any amount of

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delinquent franchise taxes paid pursuant to the Franchise Tax
and License Fee Amnesty Act of 2007.
(g) Any corporation, domestic or foreign, failing to pay
the prescribed fee for assumed corporate name renewal when due
and payable shall be given notice of nonpayment by the
Secretary of State by regular mail; and if the fee together
with a penalty fee of $5 is not paid within 90 days after the
notice is mailed, the right to use the assumed name shall
cease.
(h) Any corporation which (i) puts forth any sign or
advertisement, assuming any name other than that by which it is
incorporated or otherwise authorized by law to act or (ii)
violates Section 3.25, shall be guilty of a Class C misdemeanor
and shall be deemed guilty of an additional offense for each
day it shall continue to so offend.
(i) Each corporation, domestic or foreign, that fails or
refuses (1) to answer truthfully and fully within the time
prescribed by this Act interrogatories propounded by the
Secretary of State in accordance with this Act or (2) to
perform any other act required by this Act to be performed by
the corporation, is guilty of a Class C misdemeanor.
(j) Each corporation that fails or refuses to file articles
of revocation of dissolution within the time prescribed by this
Act is subject to a penalty for each calendar month or part of
the month that it is delinquent in the amount of $50.
(Source: P.A. 95-233, eff. 8-16-07; 95-707, eff. 1-11-08;

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96-1121, eff. 1-1-11.)