Corporate Sale of Substantially All Assets Approval Requirements in Illinois

At a glance

Requirements one by one

Illinois uses a qualitative trigger without a numerical safe harbor

805 ILCS 5/11.60 applies to a sale, lease, exchange, or other disposition of all or substantially all property and assets, with or without goodwill, outside the usual and regular course. Section 11.55 lets the board alone authorize the same listed dispositions when made in the usual and regular course.

The sections give no asset, income, or revenue percentage, no significant- continuing-business formula, and no consolidated-subsidiary, valuation, or investment-holding test. This page therefore does not decide the qualitative transaction facts.

The board recommends and submits the transaction

Section 11.60(a) requires a board resolution recommending the disposition and directing its submission to an annual or special shareholder meeting. It states no conflict or special-circumstance route for withholding a recommendation and no power to condition submission.

At the meeting, shareholders may fix any or all terms, conditions, and consideration or authorize the board to do so. Consideration may be money or real or personal property, including shares of another domestic or foreign corporation.

Notice combines a 20-to-60-day window with dissent information

Section 11.60(b) requires written notice to every record shareholder stating that the meeting will consider the all-or-substantially-all disposition. It also informs holders of the dissent right and includes § 11.70 or otherwise gives adequate procedure notice.

Under 805 ILCS 5/7.15, the asset-sale meeting notice is delivered 20 to 60 days before the meeting. The statute does not require an asset-sale plan or full terms-and-consideration attachment.

Two-thirds of outstanding shares is the default vote

Section 11.60(c) requires at least two-thirds of all outstanding shares entitled to vote. If a class or series is entitled to vote separately, approval also requires two-thirds of the outstanding shares of each such class or series.

Section 11.60(e) lets the articles substitute a smaller or larger vote, but not less than a majority of all outstanding shares entitled and a majority of each separately voting class.

Written consent adds notice before and after action

805 ILCS 5/7.10 permits written consent at the meeting-minimum vote unless the articles provide otherwise, or unanimous consent. If fewer than all entitled holders sign, every entitled holder receives written notice at least five days before execution and nonsigners receive prompt written notice after effectiveness.

The no-meeting route does not remove § 11.70's dissent notice and procedure. The current statute separately addresses the deadline and materials for a holder who elects to dissent; this survey flags that procedure rather than administering it.

The ordinary-course exception includes encumbrances only in that course

Section 11.55 expressly includes a usual-and-regular-course mortgage, pledge, or other disposition in its board-only route. Sections 11.55 and 11.60 do not state a blanket outside-course encumbrance exception, a wholly owned subsidiary safe harbor, a pro rata distribution exception, a dissolution branch, or a subsidiary-asset aggregation rule.

Silence does not establish that another corporate statute or transaction document can never apply. It means those exceptions are not part of these asset-disposition sections.

Abandonment preserves third-party contract rights

After shareholder authorization, § 11.60(d) lets the board abandon without further shareholder action or approval. Its discretion remains subject to the rights of third parties under related contracts.

Section 11.60 states no prescribed asset-sale plan, agreement, signer, public filing, or closing sequence. It does not decide contract termination, fees, damages, title records, or regulatory filings.

Consummation carries a dissent-and-payment route

805 ILCS 5/11.65(a)(2), (b) gives shareholders dissent and payment rights when an outside-course sale, lease, or exchange of all or substantially all property and assets is consummated. A holder with that entitlement may challenge the triggering action only for fraud with respect to the holder or corporation or a fiduciary-duty breach.

That savings sentence does not establish fraud or breach. This page identifies eligibility and notice but does not administer the § 11.70 demand, valuation, payment, sale instruction, or court process.

What trips people up

• The Illinois vote is outstanding-share based. Two-thirds of shares present or votes cast is not the default denominator.
• The articles may lower the vote, but only to majority floors. Both the overall outstanding-share vote and each separately voting class retain a majority minimum.
• Ordinary-course encumbrance language is not a universal mortgage exception. Section 11.55 ties its board-alone mortgage and pledge route to the usual and regular course.

Common questions

Must the board recommend the transaction?

Section 11.60(a) says the board resolution recommends the disposition and sends it to a vote. The section states no conflict-based nonrecommendation option.

May the board abandon after holder approval?

Yes. Section 11.60(d) permits abandonment without another shareholder action, subject to third-party contract rights.

Does the statute require an asset-sale filing?

Sections 11.55 and 11.60 state no filing for the ordinary disposition. Separate title, dissolution, tax, lien, license, or regulated-industry law may require other records.

Statutes and sources

• 805 ILCS 5/11.55, 11.60, and 11.65. The quoted current text supplies the trigger, ordinary-course route, board/holder process, vote, abandonment, and dissent boundary. Official current Article 11 print view (accessed September 5, 2026).
• 805 ILCS 5/7.10 and 7.15. The quoted current text supplies consent and asset-sale meeting notice timing. Official current Article 7 print view (accessed September 5, 2026).