## Facts

- AAA Temporary Services, Inc. (AAA) was an Illinois corporation whose only shareholders were Lillian Raimer and Michaelene Kay.
- AAA’s articles of incorporation provided that three directors would be elected at the first shareholders’ meeting.
- At the first shareholders’ meeting, Raimer and Kay were elected directors, along with Wesley Somers, who was never a shareholder.
- AAA’s bylaws contemplated annual shareholders’ meetings and provided that directors would serve until the next annual meeting or until successors were elected.
- The second annual shareholders’ meeting was never held.
- On the date of what was supposed to be the third annual shareholders’ meeting, Raimer and Kay attempted to amend AAA’s bylaws to reduce the number of directors from three to two, which would remove Somers from the board.
- Illinois statutory law placed the power to amend corporate bylaws in the board of directors unless the articles of incorporation stated otherwise.
- Somers sued Raimer, Kay, and AAA, alleging the shareholders lacked authority to amend the bylaws and that the attempted amendment was void.
- The trial court entered judgment on the pleadings for Somers, and Raimer and AAA appealed (Kay did not appear on appeal).

## Issues

1. Whether, when the articles of incorporation do not reserve bylaw-amending power to shareholders, the shareholders may amend the bylaws to reduce the number of directors and remove an incumbent director.
2. Whether a closely held corporation’s ownership structure permits shareholders to depart from the statutory allocation of authority over bylaw amendments.
3. Whether Somers’s alleged improper motive for suing could defeat his claim that the bylaw amendment was unauthorized.

## Decision

- The appellate court affirmed the judgment on the pleadings for Somers.
- The court held that, under Illinois law, bylaw-amending power rested with the board of directors unless the articles provided otherwise, and AAA’s articles did not do so.
- Because Raimer and Kay acted as shareholders (not as the full board that included Somers) when they purported to amend the bylaws, the attempted amendment reducing the board from three directors to two was void.
- As a result, AAA continued to have three directors, including Somers.
- The court rejected the argument that the corporation’s close-corporation character allowed shareholders to reassign statutory governance authority in a way that conflicted with the statute.
- The court also rejected attacks on Somers’s motive as a legal defense where the pleadings showed a valid right to relief.

## Legal Principles

- Under the Illinois Business Corporation Act, the power to make, alter, amend, or repeal bylaws is vested in the board of directors unless the articles of incorporation expressly reserve that power to shareholders.
- A shareholder vote cannot validly amend bylaws where the statute assigns that authority to the board and the articles contain no reservation; such an attempted amendment is void.
- Close-corporation arguments do not justify actions that conflict with mandatory statutory allocations of corporate authority.
- An alleged bad motive for bringing suit does not defeat an otherwise valid claim seeking to enforce corporate statutory or charter-based rights.
- When directors serve until successors are elected, an invalid attempt to change board size does not end an incumbent director’s term.

## Conclusion

The appellate court affirmed a declaration that AAA’s two shareholders lacked statutory authority to amend the bylaws to reduce the number of directors because the articles did not reserve that power to shareholders; the attempted amendment was void, and Somers remained a director as part of a three-member board.


Somers v. AAA Temporary Services, 5 Ill.App.3d 931, 284 N.E.2d 462 (1972)