As Reported by House Civil and Commercial Law Committee 1
123rd General Assembly 4
Regular Session Sub. H. B. No. 312 5
1999-2000 6
REPRESENTATIVES SALERNO-BUCHY 8
_________________________________________________________________ 9
A B I L L
To amend sections 1705.04, 1705.08, 1705.12, and 11
1705.43 of the Revised Code to eliminate the 12
requirement that articles of organization of a 13
limited liability company specify an address for
obtaining copies of the company's operating 14
agreement or company bylaws and that the articles 15
must be amended if that address is changed, to 16
eliminate certain distribution rights of a member
upon withdrawal from the company and instead to 17
treat the withdrawing member as an assignee of 18
the member's membership interest in the company,
and to specify that the withdrawal of a member 19
does not dissolve a limited liability company if 20
certain requirements are satisfied.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 22
Section 1. That sections 1705.04, 1705.08, 1705.12, and 24
1705.43 of the Revised Code be amended to read as follows: 25
Sec. 1705.04. (A) One or more persons, without regard to 34
residence, domicile, or state of organization, may form a limited 35
liability company. The company is formed when one or more 37
persons or their authorized representative signs and files with 38
the secretary of state articles of organization that set forth 39
all of the following: 40
(1) The name of the company; 42
(2) Except as provided in division (B) of this section, 44
the period of its duration, which may be perpetual; 45
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(3) The address to which interested persons may direct 47
requests for copies of any operating agreement and any bylaws of 48
the company; 49
(4) Any other provisions that are from the operating 51
agreement or that are not inconsistent with applicable law and 52
that the members elect to set out in the articles for the 53
regulation of the affairs of the company. 54
(B) If the articles of organization or operating agreement 56
do not set forth the period of the duration of the limited 58
liability company, its duration shall be perpetual. 59
(C) If a limited liability company is formed under this 61
chapter for the purpose of rendering a professional service, the 63
kinds of professional services authorized under Chapters 4703. 64
and 4733. of the Revised Code, or a combination of the
professional services of optometrists authorized under Chapter 65
4725. of the Revised Code, chiropractors authorized under Chapter 66
4734. of the Revised Code, psychologists authorized under Chapter 69
4732. of the Revised Code, registered or licensed practical 70
nurses authorized under Chapter 4723. of the Revised Code, 71
pharmacists authorized under Chapter 4729. of the Revised Code, 72
physical therapists authorized under sections 4755.40 to 4755.53 73
of the Revised Code, and doctors of medicine and surgery, 75
osteopathic medicine and surgery, or podiatric medicine and 76
surgery authorized under Chapter 4731. of the Revised Code, the 77
following apply:
(1) Each member, employee, or other agent of the company 79
who renders a professional service in this state and, if the 80
management of the company is not reserved to its members, each 81
manager of the company who renders a professional service in this 82
state shall be licensed, certificated, or otherwise legally 84
authorized to render in this state the same kind of professional 85
service; if applicable, the kinds of professional services 86
authorized under Chapters 4703. and 4733. of the Revised Code; 87
or, if applicable, any of the kinds of professional services of 88
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optometrists authorized under Chapter 4725. of the Revised Code, 89
chiropractors authorized under Chapter 4734. of the Revised Code, 90
psychologists authorized under Chapter 4732. of the Revised Code, 92
registered or licensed practical nurses authorized under Chapter 94
4723. of the Revised Code, pharmacists authorized under Chapter
4729. of the Revised Code, physical therapists authorized under 96
sections 4755.40 to 4755.53 of the Revised Code, or doctors of 97
medicine and surgery, osteopathic medicine and surgery, or
podiatric medicine and surgery authorized under Chapter 4731. of 98
the Revised Code. 99
(2) Each member, employee, or other agent of the company 101
who renders a professional service in another state and, if the 102
management of the company is not reserved to its members, each 103
manager of the company who renders a professional service in 104
another state shall be licensed, certificated, or otherwise 106
legally authorized to render that professional service in the 107
other state.
(D) Except for the provisions of this chapter pertaining 109
to the personal liability of members, employees, or other agents 110
of a limited liability company and, if the management of the 111
company is not reserved to its members, the personal liability of 112
managers of the company, this chapter does not restrict, limit, 113
or otherwise affect the authority or responsibilities of any 114
agency, board, commission, department, office, or other entity to 115
license, certificate, register, and otherwise regulate the 116
professional conduct of individuals or organizations of any kind 118
rendering professional services in this state or to regulate the 119
practice of any profession that is within the jurisdiction of the 120
agency, board, commission, department, office, or other entity, 121
notwithstanding that the individual is a member or manager of a 122
limited liability company and is rendering the professional 123
services or engaging in the practice of the profession through 124
the limited liability company or that the organization is a 125
limited liability company. 126
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(E) No limited liability company formed for the purpose of 130
providing a combination of the professional services, as defined
in section 1785.01 of the Revised Code, of optometrists 131
authorized under Chapter 4725. of the Revised Code, chiropractors 132
authorized under Chapter 4734. of the Revised Code, psychologists 133
authorized under Chapter 4732. of the Revised Code, registered or 135
licensed practical nurses authorized under Chapter 4723. of the
Revised Code, pharmacists authorized under Chapter 4729. of the 136
Revised Code, physical therapists authorized under sections 137
4755.40 to 4755.53 of the Revised Code, and doctors of medicine 139
and surgery, osteopathic medicine and surgery, or podiatric 140
medicine and surgery authorized under Chapter 4731. of the 141
Revised Code shall control the professional clinical judgment 143
exercised within accepted and prevailing standards of practice of 144
a licensed, certificated, or otherwise legally authorized 145
optometrist, chiropractor, psychologist, nurse, pharmacist,
physical therapist, or doctor of medicine and surgery, 149
osteopathic medicine and surgery, or podiatric medicine and
surgery in rendering care, treatment, or professional advice to 151
an individual patient. 152
This division does not prevent a hospital, as defined in 154
section 3727.01 of the Revised Code, insurer, as defined in 156
section 3999.36 of the Revised Code, or intermediary 158
organization, as defined in section 1751.01 of the Revised Code, 160
from entering into a contract with a limited liability company 161
described in this division that includes a provision requiring 162
utilization review, quality assurance, peer review, or other
performance or quality standards. Those activities shall not be 163
construed as controlling the professional clinical judgment of an 164
individual practitioner listed in this division. 165
Sec. 1705.08. (A) The articles of organization of a 174
limited liability company may be amended at any time and for any 175
proper purpose by filing a certificate of amendment with the 176
secretary of state. However, a certificate of amendment amending 177
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the articles of organization shall be filed within thirty days 178
after the occurrence of any of the following: 179
(1) The name of the limited liability company is changed; 181
(2) The period of the limited liability company's duration 183
is changed; 184
(3) The address to which persons may direct requests for 186
copies of any operating agreements or bylaws of the limited 187
liability company is changed; 188
(4) Any other information that is set forth in the 190
articles of organization is changed. 191
(B) A member of a limited liability company in which the 193
management is reserved to its members, or a manager of a limited 194
liability company in which the management is not reserved to its 195
members, promptly shall file or cause to be filed a certificate 196
of amendment upon discovering that a statement in the articles of 197
organization was materially false when made or that any other 198
information set forth in the articles of organization has changed 199
making the articles materially inaccurate. 200
(C)(1) A certificate of amendment filed pursuant to 202
division (A) or (B) of this section shall be on a form prescribed 203
by the secretary of state and shall set forth all of the 204
following: 205
(a) The name of the limited liability company; 207
(b) The date of the filing of the limited liability 209
company's articles of organization that are being amended; 210
(c) The amendment to the limited liability company's 212
articles of organization. 213
(2) The certificate of amendment shall be executed by a 215
member, manager, or authorized representative of the limited 216
liability company, which person shall also certify that he THE 217
PERSON is authorized to execute the certificate. 219
(D) The articles of organization of a limited liability 221
company may be restated at any time by filing a restatement of 222
the articles of organization with the secretary of state. The 223
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restatement shall be certified by a member, manager, or 224
authorized representative of the limited liability company, which 225
person shall also certify that he THE PERSON is authorized to 226
execute the restatement. 228
Sec. 1705.12. Upon withdrawal, a member withdrawing from a 237
limited liability company has the right to receive any 238
distribution to which he THE MEMBER is entitled under the 240
operating agreement and, except as otherwise provided in that
agreement, the right to receive within a reasonable time after 241
withdrawal the fair value of his membership interest as of the 243
date of withdrawal based upon his right to share in distributions 245
of the company WITHDRAWING MEMBER SHALL BE TREATED AS IF THE 246
MEMBER WERE AN ASSIGNEE OF ALL OF THE MEMBER'S MEMBERSHIP 247
INTEREST AS OF THE DATE OF WITHDRAWAL. 248
Sec. 1705.43. (A) A limited liability company organized 257
under this chapter shall be dissolved upon the occurrence of any 258
of the following events: 259
(1) The expiration of the period, if any, fixed by the 261
operating agreement or articles of organization for the duration 263
of the company;
(2) One or more events specified in writing in the 265
operating agreement as causing the dissolution of the company; 266
(3) The unanimous written agreement of all members to 268
dissolve the company; 269
(4) The EXCEPT AS PROVIDED IN DIVISION (C) OF THIS 272
SECTION, THE withdrawal of a member of the company, unless the 273
business of the company is continued by the consent of all of the 274
remaining members or under a right to continue the company that 275
is stated in writing in the operating agreement; 276
(5) Upon entry of a decree of judicial dissolution under 278
section 1705.47 of the Revised Code. 279
(B) Following the occurrence of any of the events OF 281
DISSOLUTION specified in division (A) of this section, the 282
limited liability company shall deliver to the secretary of state 283
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for filing a certificate of dissolution on a form that is 284
prescribed by the secretary of state and that includes the name 285
of the company and the effective date of its dissolution. 286
(C) IF THE COMPANY WAS FORMED ON OR AFTER THE EFFECTIVE 289
DATE OF THIS AMENDMENT, OR THE COMPANY WAS FORMED PRIOR TO THE 290
EFFECTIVE DATE OF THIS AMENDMENT AND ITS ARTICLES OR OPERATING 291
AGREEMENT ARE AMENDED TO SPECIFICALLY STATE THAT THIS DIVISION 292
APPLIES TO THE COMPANY, THE WITHDRAWAL OF A MEMBER OF THE COMPANY 293
SHALL NOT CAUSE THE DISSOLUTION OF THE COMPANY EXCEPT AS MAY BE 294
PROVIDED IN THE OPERATING AGREEMENT.
Section 2. That existing sections 1705.04, 1705.08, 296
1705.12, and 1705.43 of the Revised Code are hereby repealed. 298