As Introduced 1
123rd General Assembly 4
Regular Session H. B. No. 597 5
1999-2000 6
REPRESENTATIVE WOMER BENJAMIN 7
_________________________________________________________________ 9
A B I L L
To amend sections 1702.01, 1702.02, 1702.03, 11
1702.04, 1702.06, 1702.07, 1702.08, 1702.10, 12
1702.11, 1702.12, 1702.13, 1702.14, 1702.15, 13
1702.16, 1702.17, 1702.18, 1702.19, 1702.21,
1702.22, 1702.23, 1702.25, 1702.26, 1702.27, 14
1702.28, 1702.29, 1702.30, 1702.301, 1702.31, 15
1702.32, 1702.33, 1702.34, 1702.36, 1702.38,
1702.39, 1702.41, 1702.42, 1702.44, 1702.45, 16
1702.47, 1702.48, 1702.49, 1702.50, 1702.51, 17
1702.52, 1702.521, 1702.53, 1702.54, 1702.55, 18
1702.58, and 1702.59 of the Revised Code to
modify the Nonprofit Corporation Law, including 19
creating two new types of nonprofit corporate 20
entities; changing references from trustees to
directors; modifying membership rights, notice 21
and voting provisions, and merger provisions; and 22
making related changes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 24
Section 1. That sections 1702.01, 1702.02, 1702.03, 26
1702.04, 1702.06, 1702.07, 1702.08, 1702.10, 1702.11, 1702.12, 27
1702.13, 1702.14, 1702.15, 1702.16, 1702.17, 1702.18, 1702.19, 28
1702.21, 1702.22, 1702.23, 1702.25, 1702.26, 1702.27, 1702.28, 29
1702.29, 1702.30, 1702.301, 1702.31, 1702.32, 1702.33, 1702.34, 30
1702.36, 1702.38, 1702.39, 1702.41, 1702.42, 1702.44, 1702.45, 31
1702.47, 1702.48, 1702.49, 1702.50, 1702.51, 1702.52, 1702.521, 32
1702.53, 1702.54, 1702.55, 1702.58, and 1702.59 of the Revised 33
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Code be amended to read as follows: 35
Sec. 1702.01. As used in this chapter, unless the context 45
otherwise requires: 46
(A) "Corporation" or "domestic corporation" means a 48
nonprofit corporation formed under the laws of this state, or a 49
corporation for profit formed under the laws of this state that, 50
by amendment to its articles as provided by law, becomes a 51
nonprofit corporation. 52
(B) "Foreign corporation" means a nonprofit corporation 54
formed under the laws of another state. 55
(C) "Nonprofit corporation" means a DOMESTIC OR FOREIGN 57
corporation that is not formed OTHERWISE THAN for the pecuniary 59
gain or profit of, and whose net earnings or any part of them is 61
not distributable to, its members, trustees DIRECTORS, officers, 62
or other private persons, except that the payment of reasonable 64
compensation for services rendered and the distribution of assets 65
on dissolution as permitted by section 1702.49 of the Revised 66
Code is not pecuniary gain or profit or distribution of net 67
earnings. In a corporation all of whose members are nonprofit 68
corporations, distribution to members does not deprive it of the 69
status of a nonprofit corporation.
(D) "Charitable corporation" means a corporation organized 71
and operated exclusively for religious, charitable, scientific, 72
testing for public safety, literary, or educational purposes, 73
exclusively for the prevention of cruelty to children or animals, 74
or exclusively for a home for the aged, as defined in section 75
5701.13 of the Revised Code, OR EXCLUSIVELY FOR THE FOSTERING OF 76
NATIONAL OR INTERNATIONAL AMATEUR COMPETITION IF NO PART OF ITS 77
ACTIVITIES INVOLVE THE PROVISION OF THE ATHLETIC FACILITIES OR 78
EQUIPMENT, OR A CORPORATION ORGANIZED AND OPERATED EXCLUSIVELY 79
FOR A COMBINATION OF THESE PURPOSES. ALL CHARITABLE CORPORATIONS 80
ARE PUBLIC BENEFIT CORPORATIONS.
(E) "State" means the United States; any state, territory, 82
insular possession, or other political subdivision of the United 83
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States, including the District of Columbia; any foreign country 84
or nation; and any province, territory, or other political 85
subdivision of a foreign country or nation. 86
(F) "Articles" includes original articles of 88
incorporation, agreements of merger or consolidation IF AND ONLY 89
TO THE EXTENT THAT ARTICLES OF INCORPORATION ARE ADOPTED OR 90
AMENDED IN THE AGREEMENTS, amended articles, and amendments to 92
any of these, and, in the case of a corporation created before 93
September 1, 1851, the special charter and any amendments to it 94
made by special act of the General Assembly or pursuant to 95
general law.
(G) "Incorporator" means a person who signed the original 97
articles of incorporation. 98
(H) "Member" means one having membership rights and 100
privileges in a corporation in accordance with its articles or 101
regulations. 102
(I) "Voting member" means a member possessing voting 104
rights, either generally or in respect of the particular question 105
involved, as the case may be. 106
(J) "Person" includes, but is not limited to, a nonprofit 108
corporation, a corporation for profit), a partnership, an 109
unincorporated society or association, and two or more persons 110
having a joint or common interest. 111
(J)(K) The location of the "principal office" of a 113
corporation is the place named as such in its articles. 114
(L) "Trustees DIRECTORS" means the persons, SUCH AS 116
TRUSTEES, vested with the authority to conduct the affairs of the 118
corporation irrespective of the name by which they are 119
designated.
(M) "Insolvent" means that the corporation is unable to 121
pay its obligations as they become due in the usual course of its 122
affairs. 123
(N)(1) Subject to division (N)(2) of this section, 125
"volunteer" means a trustee DIRECTOR, officer, or agent of a 126
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nonprofit corporation, or another person associated with a 128
nonprofit corporation, who satisfies both of the following: 129
(a) Performs services for or on behalf of, and under the 131
authority or auspices of, that corporation; 132
(b) Does not receive compensation, either directly or 134
indirectly, for performing those services. 135
(2) For purposes of division (N)(1) of this section, 137
"compensation" does not include any of the following: 138
(a) Actual and necessary expenses that are incurred by a 140
volunteer in connection with the services performed for a 141
nonprofit corporation, and that are reimbursed to the volunteer 142
or otherwise paid; 143
(b) Insurance premiums paid on behalf of a volunteer, and 145
amounts paid or reimbursed, pursuant to division (E) of section 146
1702.12 of the Revised Code; 147
(c) Modest perquisites. 149
(O) "BUSINESS CORPORATION" MEANS ANY CORPORATION THAT IS 151
NOT A PUBLIC BENEFIT CORPORATION OR A MUTUAL BENEFIT CORPORATION. 152
(P) "MUTUAL BENEFIT CORPORATION" MEANS ANY CORPORATION 154
ORGANIZED UNDER THIS CHAPTER OTHER THAN A PUBLIC BENEFIT 156
CORPORATION.
(Q) "PUBLIC BENEFIT CORPORATION" MEANS A CORPORATION THAT 158
IS RECOGNIZED AS EXEMPT FROM FEDERAL INCOME TAXATION UNDER 160
SECTION 501(c)(3) OF THE "INTERNAL REVENUE CODE OF 1986," 100 162
STAT. 2085, 26 U.S.C. 1, AS AMENDED, OR IS ORGANIZED FOR A PUBLIC 164
OR CHARITABLE PURPOSE AND THAT UPON DISSOLUTION MUST DISTRIBUTE 165
ITS ASSETS TO A PUBLIC BENEFIT CORPORATION, THE UNITED STATES, A 166
STATE OR ANY POLITICAL SUBDIVISION OF A STATE, OR A PERSON THAT 167
IS RECOGNIZED AS EXEMPT FROM FEDERAL INCOME TAXATION UNDER 168
SECTION 501(c)(3) OF THE "INTERNAL REVENUE CODE OF 1986," AS 172
AMENDED.
Sec. 1702.02. (A) UNLESS ANOTHER FORM OF NOTICE IS 181
REQUIRED BY THE ARTICLES, THE REGULATIONS, THE BYLAWS, OR BY 184
APPLICABLE LAW, ANY NOTICE REQUIRED BY THIS CHAPTER SHALL BE IN 186
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WRITING AND SHALL BE DELIVERED PERSONALLY OR SENT BY TELEGRAM, 187
TELECOPY, OR ELECTRONIC MAIL TRANSMISSION OR BY UNITED STATES 188
MAIL, EXPRESS MAIL, OR COURIER SERVICE, WITH POSTAGE OR FEES 190
PREPAID.
(B) In computing the period of time for the giving of a 192
notice required or permitted under sections 1702.01 to 1702.58, 193
inclusive, of the Revised Code THIS CHAPTER, or under the 194
articles, the regulations, or the bylaws of a corporation, or a 196
resolution of its members or trustees DIRECTORS, the day on which 197
the notice is given shall be excluded, and the day when the act 198
for which notice is given is to be done shall be included, unless 199
the instrument calling for the notice otherwise provides. If 200
notice is permitted to be given by PERSONAL DELIVERY OR 201
TRANSMITTED BY TELEGRAM, TELECOPY, OR ELECTRONIC mail, the notice 203
shall be deemed to have been given when DELIVERED OR TRANSMITTED. 204
IF NOTICE IS SENT BY UNITED STATES MAIL, EXPRESS MAIL, OR COURIER 205
SERVICE, THE NOTICE SHALL BE DEEMED TO HAVE BEEN GIVEN WHEN 206
deposited in the mail OR WITH THE COURIER SERVICE.
(C) A WRITTEN NOTICE OR REPORT DELIVERED AS PART OF A 208
NEWSLETTER, MAGAZINE, OR OTHER PUBLICATION REGULARLY SENT TO 210
MEMBERS SHALL CONSTITUTE A WRITTEN NOTICE OR REPORT IF ADDRESSED 211
OR DELIVERED TO THE MEMBER'S ADDRESS SHOWN IN THE CORPORATION'S 212
CURRENT LIST OF MEMBERS, OR, IN THE CASE OF MEMBERS WHO ARE 213
RESIDENTS OF THE SAME HOUSEHOLD AND WHO HAVE THE SAME ADDRESS IN 214
THE CORPORATION'S CURRENT LIST OF MEMBERS, IF ADDRESSED OR 215
DELIVERED TO ONE OF SUCH MEMBERS AT THE ADDRESS APPEARING ON THE 216
CORPORATION'S CURRENT LIST OF MEMBERS. 217
Sec. 1702.03. A corporation may be formed UNDER THIS 226
CHAPTER for any purpose or purposes for which natural persons 228
lawfully may associate themselves, provided EXCEPT that when 229
there is a special provision in the Revised Code for the 230
formation thereunder of a designated class of corporations, a 231
corporation of such class shall be formed thereunder. 232
Sec. 1702.04. (A) Any person, singly or jointly with 241
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others, and without regard to residence, domicile, or state of 242
incorporation, may form a corporation by signing and filing with 243
the secretary of state articles of incorporation, which shall set 244
forth the following: 245
(1) The name of the corporation; 247
(2) The place in this state where the principal office of 249
the corporation is to be located; 250
(3) The purpose or purposes for which the corporation is 252
formed; 253
(4) The names and addresses of not less than three natural 255
persons who are to be initial trustees. 256
(B) The articles also may set forth the following: 258
(1) THE NAMES OF INDIVIDUALS WHO ARE TO SERVE AS THE 260
INITIAL DIRECTORS;
(2) The names of any persons or the designation of any 262
group of persons who are to be the initial members; 263
(2)(3) Any qualification of membership and the 265
classification of members; 266
(3)(4) A provision to the effect that the corporation 268
shall be subordinate to and subject to the authority of any head 269
or national association, lodge, order, beneficial association, 270
fraternal or beneficial society, foundation, federation, or any 271
other nonprofit corporation, society, organization, or 272
association; 273
(4)(5) Any lawful provision for the purpose of defining, 275
limiting, or regulating the exercise of the authority of the 276
corporation, the incorporators, the trustees DIRECTORS, the 277
officers, the members, or any class of members, or creating or 279
defining rights and privileges of the members among themselves or 280
in the property of the corporation, or governing the distribution 281
of assets on dissolution; 282
(5)(6) Any provision which THAT may be set forth in the 285
regulations; 286
(6)(7) A provision specifying the period of existence of 288
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the corporation if it is to be otherwise than perpetual; 289
(7)(8) Any additional provision permitted by this chapter. 291
(C) A written appointment of a statutory agent for the 293
purposes set forth in section 1702.06 of the Revised Code shall 294
be filed with the articles, unless the corporation belongs to one 295
of the classes mentioned in division (N) of that section. 296
(D) The legal existence of the corporation shall begin 298
upon the filing of the articles, and, unless the articles 299
otherwise provide, its period of existence shall be perpetual. 300
Sec. 1702.06. (A) Every corporation shall have and 309
maintain an agent, sometimes referred to as the "statutory 310
agent," upon whom any process, notice, or demand required or 311
permitted by statute to be served upon a corporation may be 312
served. The agent may be a natural person who is a resident of 313
this state, or may be a domestic corporation for profit or a 314
foreign corporation for profit holding a license as such under 315
the laws of this state that is authorized by its articles of 317
incorporation to act as such agent, and that has a business 318
address in this state.
(B) The secretary of state shall not accept original 320
articles for filing unless there is filed with the articles a 321
written appointment of an agent signed by the incorporators of 322
the corporation or a majority of them and a written acceptance of 323
the appointment signed by the agent. In all other cases, the 324
corporation shall appoint the agent and shall file in the office 325
of the secretary of state a written appointment of the agent that 326
is signed by any authorized officer of the corporation and a 327
written acceptance of the appointment that is either the original 328
acceptance signed by the agent or a photocopy, facsimile, or 330
similar reproduction of the original acceptance signed by the
agent. 331
(C) The written appointment of an agent shall set forth 333
the name and address in this state of the agent, including the 334
street and number or other particular description, and shall 335
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otherwise be in such form as the secretary of state prescribes. 336
The secretary of state shall keep a record of the names of 337
corporations and the names and addresses of their respective 338
agents. 339
(D) If any agent dies, removes from the state, or resigns, 341
the corporation shall forthwith appoint another agent and file 342
with the secretary of state, on a form prescribed by the 343
secretary of state, a written appointment of such THAT agent. 344
(E) If the agent changes the agent's address from that 346
appearing upon the record in the office of the secretary of 347
state, the corporation or the agent shall forthwith file with the 348
secretary of state, on a form prescribed by the secretary of 350
state, a written statement setting forth the new address. 351
(F) An agent may resign by filing with the secretary of 353
state, on a form prescribed by the secretary of state, a written 355
notice to that effect that is signed by the agent and by sending 356
a copy of the notice to the corporation at the current or last 357
known address of its principal office on or prior to the date 358
that notice is filed with the secretary of state. The notice 359
shall set forth the name of the corporation, the name and current 360
address of the agent, the current or last known address, 361
including the street and number or other particular description, 362
of the corporation's principal office, the resignation of the 363
agent, and a statement that a copy of the notice has been sent to 364
the corporation within the time and in the manner prescribed by 365
this division. Upon the expiration of sixty days after such 366
filing, the authority of the agent shall terminate. 367
(G) A corporation may revoke the appointment of an agent 369
by filing with the secretary of state, on a form prescribed by 370
the secretary of state, a written appointment of another agent 372
and a statement that the appointment of the former agent is 373
revoked.
(H) Any process, notice, or demand required or permitted 375
by statute to be served upon a corporation may be served upon the 376
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corporation by delivering a copy of it to its agent, if a natural 377
person, or by delivering a copy of it at the address of its agent 378
in this state, as such address appears upon the record in the 379
office of the secretary of state. If (1) the agent cannot be 380
found, or (2) the agent no longer has that address, or (3) the 381
corporation has failed to maintain an agent as required by this 382
section, and if in any such case the party desiring that such 383
process, notice, or demand be served, or the agent or 384
representative of the party, shall have filed with the secretary 385
of state an affidavit stating that one of the foregoing 386
conditions exists and stating the most recent address of the 387
corporation which THAT the party after diligent search has been 388
able to ascertain, then service of process, notice, or demand 390
upon the secretary of state, as the agent of the corporation, may 391
be initiated by delivering to the secretary of state or at the 393
secretary of state's office triplicate copies of such process, 394
notice, or demand and by paying to the secretary of state a fee 395
of five dollars. The secretary of state shall forthwith give 396
notice of such delivery to the corporation at its principal 397
office as shown upon the record in the secretary of state's 398
office and also to the corporation at any different address set 400
forth in the above mentioned affidavit, and shall forward to the 401
corporation at each of said THOSE addresses, by certified mail, 403
with request for return receipt, a copy of such process, notice, 404
or demand; and thereupon service upon the corporation shall be 405
deemed to have been made.
(I) The secretary of state shall keep a record of each 407
process, notice, and demand delivered to the secretary of state 409
or at the secretary of state's office under this section or any 410
other law of this state which THAT authorizes service upon the 411
secretary of state, and shall record the time of such delivery 413
and the secretary of state's action thereafter with respect 414
thereto.
(J) This section does not limit or affect the right to 416
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serve any process, notice, or demand upon a corporation in any 417
other manner permitted by law. 418
(K) Except when an original appointment of an agent is 420
filed with the original articles, a written appointment of an 421
agent or a written statement filed by a corporation with the 422
secretary of state shall be signed by any authorized officer of 423
the corporation or by the incorporators of the corporation or a 424
majority of them if no trustees DIRECTORS have been elected. 425
(L) For filing a written appointment of an agent other 427
than one filed with original articles, and for filing a statement 428
of change of address of an agent, the secretary of state shall 429
charge and collect a fee of three dollars. 430
(M) Upon the failure of any corporation to appoint another 432
agent or to file a statement of change of address of an agent, 433
the secretary of state shall give notice thereof by certified 434
mail to the corporation at the address set forth in the notice of 435
registration or on the most recent statement of continued 436
existence filed in this state by the corporation. Unless the 437
failure is cured within thirty days after the mailing by the 438
secretary of state of the notice or within any further period the 439
secretary of state grants, upon the expiration of that period 440
from the date of the mailing, the articles of the corporation 441
shall be canceled without further notice or action by the 442
secretary of state. The secretary of state shall make a notation 443
of the cancellation on the secretary of state's records. A 444
corporation whose articles have been canceled may be reinstated 446
by filing, on a form prescribed by the secretary of state, an 447
application for reinstatement and the required appointment of 448
agent or required statement, and by paying a filing fee of ten 449
dollars. The rights, privileges, and franchises of a corporation 450
whose articles have been reinstated are subject to section 451
1702.60 of the Revised Code. The secretary of state shall 452
furnish the tax commissioner a monthly list of all corporations 453
canceled and reinstated under this division. 454
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(N) This section does not apply to banks, trust companies, 456
insurance companies, or any corporation defined under the laws of 457
this state as a public utility for taxation purposes. 458
Sec. 1702.07. (A) When articles of incorporation and 467
other certificates relating to the corporation are submitted to 468
the secretary of state, the secretary of state shall, after 471
finding that they comply with the provisions of sections 1702.01 472
to 1702.58 of the Revised Code THIS CHAPTER, accept the articles 473
and other certificates for filing and make a copy of the articles 475
and other certificates by microfilm or by any authorized 477
photostatic or digitized process. Evidence of the filing shall 479
be returned to the person filing the articles or certificate. 480
(B) All persons shall have the opportunity of acquiring 482
knowledge of the contents of the articles and other certificates 483
filed and recorded in the office of the secretary of state, but 484
no person dealing with the corporation shall be charged with 485
constructive notice of the contents of any such articles or 486
certificates by reason of such filing or recording.
Sec. 1702.08. (A) When an unincorporated society or 495
association, organized for any of the purposes for which a 496
corporation could be formed under sections 1702.01 to 1702.58, 498
inclusive, of the Revised Code THIS CHAPTER, authorizes the 499
incorporation of such society or association, by the same 500
procedure and affirmative vote of its voting members as the 501
regulations, constitution, or other fundamental agreement of such 502
society or association requires for an amendment to such 503
fundamental agreement or, if no such vote is specified, by a
majority vote of the voting members present IN PERSON OR, IF 504
PERMITTED, BY MAIL OR BY PROXY, at a duly convened meeting the 505
purpose of which is stated in the notice of the meeting, then 506
upon the filing of the articles under section 1702.04 of the 507
Revised Code setting forth such facts and that such required vote 508
has been obtained, such society or association shall become a 509
corporation and the members of such society or association shall 510
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become members of such corporation in accordance with provisions 511
in the articles to that effect.
(B) All the rights, privileges, immunities, powers, 513
franchises, and authority, and all the property and obligations 515
of such unincorporated society or association shall thereupon 516
pass to, vest in, and (in the case of liabilities and 517
obligations) be obligations of the corporation so formed.
Sec. 1702.10. After the articles have been filed and at 526
any time prior to a meeting of voting members, the incorporators 527
or a majority of them, at a meeting, may adopt regulations for 528
the government of the corporation, the conduct of its affairs, 529
and the management of its property, consistent with law and the 530
articles; may elect trustees DIRECTORS in addition to those ANY 531
DIRECTORS named in the articles; and may also elect members in 532
addition to any named or provided for in the articles. If the 533
incorporators fail to adopt regulations as herein authorized BY 535
THIS SECTION WITHIN NINETY DAYS AFTER THE DATE OF INCORPORATION, 536
regulations may be adopted at a meeting of voting members by the 537
affirmative vote of a majority of the voting member. 538
Sec. 1702.11. (A) Without limiting the generality of such 547
authority, the regulations, whether designated a constitution or 548
rules, or by some other term, may include provisions with respect 549
to the following: 550
(1) The time and place for holding, the manner of and 552
authority for calling, giving notice of, and conducting, and the 553
requirements of a quorum for, meetings of members, or their 554
elected representatives or delegates; 555
(2) The qualifications, admission, voluntary withdrawal, 557
censure, and suspension of members, and the termination of 558
membership; 559
(3) The fees and dues of members; 561
(4) The rights of members, or classes of members, or of 563
their elected representatives or delegates, to vote; the manner 564
of conducting votes of members on matters, INCLUDING ANY RIGHT TO 565
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VOTE BY MAIL OR BY PROXY; the specification of their THE relative 567
rights and privileges among themselves MEMBERS and in the 568
property of the corporation; and, in the case of charitable 569
corporations, limitations upon or regulations governing their THE 571
right OF MEMBERS to examine the books and records of the 572
corporation;
(5) The election of representatives or delegates OF 574
MEMBERS and their authority, rights, and privileges; 575
(6) The number, classification, manner of fixing or 577
changing the number, qualifications, term of office, voting 578
rights, compensation or manner of fixing compensation, and the 579
removal of trustees DIRECTORS; 580
(7) The time and place for holding, the manner of and 582
authority for calling, giving notice of, and conducting, and the 583
requirements of a quorum for, meetings of the trustees DIRECTORS; 585
(8) The appointment of an executive and other committees 587
of the trustees DIRECTORS or of members, and their authority, AND 589
THE METHOD BY WHICH THEY TAKE ACTION;
(9) The titles, qualifications, duties, term of office, 591
compensation or manner of fixing compensation, and the removal, 592
of officers; 593
(10) Defining, limiting, or regulating the exercise of the 595
authority of the corporation, the trustees DIRECTORS, the 596
officers, the members, or any class of members; 598
(11) The method by which voting members may change the 600
regulations. 601
(B) In the absence of provisions in the articles or the 603
regulations with respect to the method of changing the 604
regulations, the regulations may be amended, or new regulations 605
may be adopted, by the voting members at a meeting held for such 606
purpose, by the affirmative vote of a majority of the voting 607
members present IN PERSON OR, IF PERMITTED, BY MAIL OR BY PROXY, 608
if a quorum is present. 609
(C) The members of a nonprofit corporation may adopt or 611
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authorize the trustees DIRECTORS to adopt, either before or 612
during an emergency, as defined in division (U) of section 614
1701.01 of the Revised Code, emergency regulations operative only 615
during an emergency. The emergency regulations may include such 616
provisions as are authorized to be included in regulations by 617
divisions (A) and (B) of this section. In addition, unless 618
expressly prohibited by the articles or regulations, and 619
notwithstanding any different provisions in this chapter and any 620
different provision in the articles or regulations which THAT are 621
not expressly stated to be operative during an emergency, the 623
emergency regulations may make any provision that may be 624
practical or necessary with respect to meetings, committees, 625
vacancies, and temporary appointments of the trustees DIRECTORS, 626
and the rank and succession of officers, the same as may be done 628
by corporations for profit under division (C) of section 1701.11 629
of the Revised Code, reading "directors" as "trustees" where the 630
context so requires. 631
(D) Any change in the regulations made in accordance with 633
their provisions or pursuant to division (B) of this section 634
shall be binding on all members. 635
(E) If, pursuant to the regulations, such regulations are 637
amended or new regulations adopted without a meeting of the 638
voting members, the secretary of the corporation shall mail a 639
copy of the amendment or the new regulations to each voting 640
member who would have been entitled to vote on the amendment or 641
new regulations and did not participate in the adoption of the 642
amendment or new regulations. 643
(F) No person dealing with the corporation shall be 645
charged with constructive notice of the regulations. 646
(G) Unless expressly prohibited by the articles or 648
regulations, or unless otherwise provided by the emergency 649
regulations, and notwithstanding any different provision in this 650
chapter, the special rules provided for corporations for profit 651
under division (F) of section 1701.11 of the Revised Code are 652
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applicable to a nonprofit corporation during an emergency, as 653
defined in division (U) of section 1701.01 of the Revised Code, 654
reading "directors" as "trustees" where the context so requires. 655
Sec. 1702.12. (A) A corporation may sue and be sued. 664
(B) A corporation may adopt and alter a corporate seal and 666
use it or a facsimile of it, but failure to affix the corporate 667
seal shall not affect the validity of any instrument. 668
(C) Unless otherwise provided in the articles, a 670
corporation may take property of any description, or any interest 671
in property, by gift, devise, or bequest. 672
(D) Subject to limitations prescribed by law or in its 674
articles, a corporation may make donations for the public 675
welfare, for religious, charitable, scientific, literary, or 676
educational purposes, or in furtherance of any of its purposes. 677
(E)(1) A corporation may indemnify or agree to indemnify 679
any person who was or is a party, or is threatened to be made a 680
party, to any threatened, pending, or completed civil, criminal, 681
administrative, or investigative action, suit, or proceeding, 682
other than an action by or in the right of the corporation, by 683
reason of the fact that he THE PERSON is or was a trustee 684
DIRECTOR, officer, employee, or agent of or a volunteer of the 687
corporation, or is or was serving at the request of the 688
corporation as a trustee, director, officer, employee, member, 689
manager, or agent of or a volunteer of another domestic or 690
foreign nonprofit corporation or corporation for profit, a 691
limited liability company, or a partnership, joint venture,
trust, or other enterprise, against expenses, including 693
attorney's fees, judgments, fines, and amounts paid in settlement 694
actually and reasonably incurred by him THE PERSON in connection 695
with such action, suit, or proceeding, if he THE PERSON acted in 697
good faith and in a manner he THE PERSON reasonably believed to 699
be in or not opposed to the best interests of the corporation, 700
and, with respect to any criminal action or proceeding, if he THE 701
PERSON had no reasonable cause to believe his THE PERSON'S 702
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conduct was unlawful. The termination of any action, suit, or 703
proceeding by judgment, order, settlement, or conviction, or upon 704
a plea of nolo contendere or its equivalent, shall not create, of 705
itself, a presumption that the person did not act in good faith 706
and in a manner he THE PERSON reasonably believed to be in or not 707
opposed to the best interests of the corporation, and, with 709
respect to any criminal action or proceeding, a presumption that 710
the person had reasonable cause to believe that his THE PERSON'S 711
conduct was unlawful. 712
(2) A corporation may indemnify or agree to indemnify any 714
person who was or is a party, or is threatened to be made a 715
party, to any threatened, pending, or completed action or suit by 716
or in the right of the corporation to procure a judgment in its 717
favor, by reason of the fact that he THE PERSON is or was a 718
trustee DIRECTOR, officer, employee, or agent of or a volunteer 720
of the corporation, or is or was serving at the request of the 721
corporation as a trustee, director, officer, employee, member, 722
manager, or agent of or a volunteer of another domestic or 724
foreign nonprofit corporation or corporation for profit, a 725
limited liability company, or a partnership, joint venture, 726
trust, or other enterprise against expenses, including attorney's 727
fees, actually and reasonably incurred by him THE PERSON in 728
connection with the defense or settlement of such action or suit, 730
if he THE PERSON acted in good faith and in a manner he THE 732
PERSON reasonably believed to be in or not opposed to the best 734
interests of the corporation, except that no indemnification 735
shall be made in respect of any of the following:
(a) Any claim, issue, or matter as to which such THE 737
person is adjudged to be liable for negligence or misconduct in 738
the performance of his THE PERSON'S duty to the corporation 739
unless, and only to the extent that, the court of common pleas or 741
the court in which the action or suit was brought determines, 742
upon application, that, despite the adjudication of liability but 743
in view of all the circumstances of the case, such THE person is 744
17
fairly and reasonably entitled to indemnity for such expenses as 745
the court of common pleas or such other court considers proper; 746
(b) Any action or suit in which liability is asserted 748
against a trustee DIRECTOR and that liability is asserted only 749
pursuant to section 1702.55 of the Revised Code. 751
(3) To the extent that a trustee, director, officer, 753
employee, member, manager, agent, or volunteer has been 754
successful on the merits or otherwise in defense of any action, 756
suit, or proceeding referred to in division (E)(1) or (2) of this 757
section, or in defense of any claim, issue, or matter in such an 758
action, suit, or proceeding, he THE PERSON shall be indemnified 759
against expenses, including attorney's fees, actually and 761
reasonably incurred by him THE PERSON in connection with that 762
action, suit, or proceeding. 763
(4) Unless ordered by a court and subject to division 765
(E)(3) of this section, any indemnification under division (E)(1) 766
or (2) of this section shall be made by the corporation only as 767
authorized in the specific case, upon a determination that 768
indemnification of the trustee, director, officer, employee, 769
member, manager, agent, or volunteer is proper in the 770
circumstances because he THE PERSON has met the applicable 772
standard of conduct set forth in division (E)(1) or (2) of this 773
section. Such determination shall be made in any of the 774
following manners:
(a) By a majority vote of a quorum consisting of trustees 776
DIRECTORS of the indemnifying corporation who were not and are 778
not parties to or threatened with the action, suit, or proceeding 779
referred to in division (E)(1) or (2) of this section; 780
(b) Whether or not a quorum as described in division 782
(E)(4)(a) of this section is obtainable, and if a majority of a 783
quorum of disinterested trustees DIRECTORS so directs, in a 784
written opinion by independent legal counsel other than an 786
attorney, or a firm having associated with it an attorney, who 787
has been retained by or who has performed services for the 788
18
corporation or any person to be indemnified within the past five 789
years;
(c) By the members; 791
(d) By the court of common pleas or the court in which the 793
action, suit, or proceeding referred to in division (E)(1) or (2) 794
of this section was brought. 795
If an action or suit by or in the right of the corporation 797
is involved, any determination made by the disinterested trustees 798
DIRECTORS under division (E)(4)(a) of this section or by 800
independent legal counsel under division (E)(4)(b) of this 801
section shall be communicated promptly to the person who 802
threatened or brought the action or suit under division (E)(2) of 803
this section, and, within ten days after receipt of such 804
notification, such person shall have the right to petition the 805
court of common pleas or the court in which such action or suit 806
was brought to review the reasonableness of such determination. 807
(5)(a)(i) Unless, at the time of a trustee's DIRECTOR'S or 809
volunteer's act or omission that is the subject of an action, 810
suit, or proceeding referred to in division (E)(1) or (2) of this 811
section, the articles or regulations of the corporation state, by 812
specific reference to this division, that its provisions do not 813
apply to the corporation, or unless the only liability asserted 814
against a trustee DIRECTOR in an action, suit, or proceeding 815
referred to in division (E)(1) or (2) of this section is pursuant 817
to section 1702.55 of the Revised Code, or unless division 818
(E)(5)(a)(ii) of this section applies, the expenses incurred by 819
the trustee DIRECTOR or volunteer in defending the action, suit, 821
or proceeding, including attorney's fees, shall be paid by the 822
corporation. Upon the request of the trustee DIRECTOR or 823
volunteer and in accordance with division (E)(5)(b) of this 825
section, those expenses shall be paid as they are incurred, in 826
advance of the final disposition of the action, suit, or 827
proceeding.
(ii) Notwithstanding division (E)(5)(a)(i) of this 829
19
section, the expenses incurred by a trustee DIRECTOR or volunteer 831
in defending an action, suit, or proceeding referred to in 832
division (E)(1) or (2) of this section, including attorney's 833
fees, shall not be paid by the corporation upon the final 834
disposition of the action, suit, or proceeding, or, if paid in 835
advance of the final disposition of the action, suit, or 836
proceeding, shall be repaid to the corporation by the trustee 837
DIRECTOR or volunteer, if it is proved, by clear and convincing 839
evidence, in a court with jurisdiction that the act or omission 840
of the trustee DIRECTOR or volunteer was one undertaken with a 842
deliberate intent to cause injury to the corporation or was one 843
undertaken with a reckless disregard for the best interests of 844
the corporation.
(b) Expenses, including attorney's fees, incurred by a 846
trustee, director, officer, employee, member, manager, agent, or 847
volunteer in defending any action, suit, or proceeding referred 849
to in division (E)(1) or (2) of this section may be paid by the 850
corporation as they are incurred, in advance of the final 851
disposition of the action, suit, or proceeding, as authorized by 852
the trustees DIRECTORS in the specific case, upon receipt of an 854
undertaking by or on behalf of the trustee, director, officer, 855
employee, member, manager, agent, or volunteer to repay the 857
amount if it ultimately is determined that he THE PERSON is not 858
entitled to be indemnified by the corporation. 859
(6) The indemnification authorized by this section is not 861
exclusive of, and shall be in addition to, any other rights 862
granted to those seeking indemnification, pursuant to the 863
articles, the regulations, any agreement, a vote of members or 864
disinterested trustees DIRECTORS, or otherwise, both as to action 866
in their official capacities and as to action in another capacity 867
while holding their offices or positions, and shall continue as 868
to a person who has ceased to be a trustee, director, officer, 869
employee, member, manager, agent, or volunteer and shall inure to 870
the benefit of the heirs, executors, and administrators of such a 872
20
person.
(7) A corporation may purchase and maintain insurance, or 874
furnish similar protection, including, but not limited to, trust 875
funds, letters of credit, or self-insurance, for or on behalf of 876
any person who is or was a trustee DIRECTOR, officer, employee, 877
agent, or volunteer of the corporation, or is or was serving at 879
the request of the corporation as a trustee, director, officer, 880
employee, member, manager, agent, or volunteer of another 881
domestic or foreign nonprofit corporation or corporation for 882
profit, a limited liability company, or a partnership, joint 883
venture, trust, or other enterprise, against any liability 884
asserted against him THE PERSON and incurred by him THE PERSON in 886
any such capacity, or arising out of his THE PERSON'S status as 887
such, whether or not the corporation would have the power to 889
indemnify him THE PERSON against that liability under this 891
section. Insurance may be so purchased from or so maintained 892
with a person in which the corporation has a financial interest. 893
(8) The authority of a corporation to indemnify persons 895
pursuant to division (E)(1) or (2) of this section does not limit 896
the payment of expenses as they are incurred, in advance of the 897
final disposition of an action, suit, or proceeding, pursuant to 898
division (E)(5) of this section or the payment of 899
indemnification, insurance, or other protection that may be 900
provided pursuant to division (E)(6) or (7) of this section. 901
Divisions (E)(1) and (2) of this section do not create any 903
obligation to repay or return payments made by a corporation
pursuant to division (E)(5), (6), or (7) of this section. 904
(9) As used in division (E) of this section, "corporation" 906
includes all constituent corporations in a consolidation or 907
merger, and the new or surviving corporation, so that any person 908
who is or was a trustee DIRECTOR, officer, employee, agent, or 909
volunteer of a constituent corporation or is or was serving at 911
the request of a constituent corporation as a trustee, director, 912
officer, employee, member, manager, agent, or volunteer of 913
21
another domestic or foreign nonprofit corporation or corporation 914
for profit, a limited liability company, or a partnership, joint 916
venture, trust, or other enterprise, shall stand in the same 917
position under this section with respect to the new or surviving 918
corporation as he THE PERSON would if he THE PERSON had served 919
the new or surviving corporation in the same capacity. 920
(F) In carrying out the purposes stated in its articles 922
and subject to limitations prescribed by law or in its articles, 923
a corporation may do the following: 924
(1) Purchase or otherwise acquire, lease as lessee, invest 926
in, hold, use, lease as lessor, encumber, sell, exchange, 927
transfer, and dispose of property of any description or any 928
interest in property of any description; 929
(2) Make contracts; 931
(3) Form or acquire the control of other domestic or 933
foreign nonprofit corporations or corporations for profit; 934
(4) Be a partner, member, associate, or participant in 936
other enterprises or ventures, whether profit or nonprofit; 937
(5) Borrow money, and issue, sell, and pledge its notes, 939
bonds, and other evidences of indebtedness, and secure any of its 940
obligations by mortgage, pledge, or deed of trust, of all or any 941
of its property, and guarantee or secure obligations of any 942
person; 943
(6) Become a member of another corporation; 945
(7) Conduct its affairs in this state and elsewhere; 947
(8) Resist a change or potential change in control of the 949
corporation, if the trustees DIRECTORS, by a majority vote of a 950
quorum, determine that the change or potential change is opposed 952
to or not in the best interests of the corporation, upon 953
consideration of any of the matters set forth in division (E) of 954
section 1702.30 of the Revised Code; 955
(9) Do all things permitted by law and exercise all 957
authority within the purposes stated in its articles or 958
incidental to those purposes. 959
22
(G) Irrespective of the purposes stated in its articles, 961
but subject to limitations or prohibitions stated in its 962
articles, a corporation, in addition to the authority conferred 963
by division (F) of this section, may invest its funds not 964
currently needed in carrying out its purposes in any shares or 965
other securities of another nonprofit corporation or corporation 966
for profit, or another business or undertaking. 967
(H)(1) Notwithstanding any other provision of this section 969
to the contrary, no corporation that is a "private foundation," 970
as defined in section 509 of the Internal Revenue Code, shall do 971
the following: 972
(a) Engage in any act of "self-dealing," as defined in 974
section 4941 (d) of the Internal Revenue Code, that would give 975
rise to any liability for any tax imposed by section 4941 of the 976
Internal Revenue Code; 977
(b) Retain any "excess business holdings," as defined in 979
section 4943 (c) of the Internal Revenue Code, that would give 980
rise to any liability for any tax imposed by section 4943 of the 981
Internal Revenue Code; 982
(c) Make any investment that would jeopardize the carrying 984
out of any of its exempt purposes, within the meaning of section 985
4944 of the Internal Revenue Code, so as to give rise to any 986
liability for any tax imposed by that section; 987
(d) Make any "taxable expenditures," as defined in section 989
4945 (d) of the Internal Revenue Code, that would give rise to 990
any liability for any tax imposed by section 4945 of the Internal 991
Revenue Code. 992
(2) Each corporation that is a "private foundation," as 994
defined in section 509 of the Internal Revenue Code, shall, for 995
the purposes specified in its articles, distribute at such time 996
and in such manner, for each taxable year, amounts at least 997
sufficient to avoid liability for any tax imposed by section 4942 998
of the Internal Revenue Code. 999
(3) Divisions (H)(1) and (2) of this section apply to all 1,001
23
corporations described in them, whether or not contrary to the 1,002
provisions of the articles or regulations of such a corporation, 1,003
except that divisions (H)(1) and (2) of this section do not apply 1,004
to a corporation in existence on September 17, 1971, to the 1,005
extent that such corporation provides to the contrary by 1,006
amendment to its articles adopted after that date. 1,007
(4) Violation of a provision of division (H)(1) or (2) of 1,009
this section by a corporation to which the provisions of those 1,010
divisions are applicable is not cause for cancellation of its 1,011
articles. No trustee DIRECTOR or officer of a corporation to 1,012
which the provisions of division (H)(1) or (2) of this section 1,014
are applicable is personally liable for a violation of a 1,015
prohibition or requirement of those provisions, unless he THE 1,016
DIRECTOR OR OFFICER participated in such violation knowing that 1,018
it was a violation, and no such trustee DIRECTOR or officer is 1,019
personally liable if such violation was not willful and was due 1,021
to reasonable cause, except that this division does not exonerate 1,022
a trustee DIRECTOR or officer from any responsibility or 1,024
liability to which he THE DIRECTOR OR OFFICER is subject under 1,025
any other rule of law, whether or not duplicated in division 1,026
(H)(1) or (2) of this section. 1,027
(5) Except as provided in division (H)(4) of this section, 1,029
nothing in division (H) of this section impairs the rights and 1,030
powers of the courts or the attorney general of this state with 1,031
respect to any corporation. 1,032
(6) As used in division (H) of this section, "Internal 1,034
Revenue Code" means the "Internal Revenue Code of 1986," 100 1,035
Stat. 2085, 26 U.S.C. 1, as amended. 1,036
(I)(1) No lack of, or limitation upon, the authority of a 1,038
corporation shall be asserted in any action except as follows: 1,039
(a) By the state in an action by it against the 1,041
corporation; 1,042
(b) By or on behalf of the corporation against a trustee 1,044
DIRECTOR, an officer, or a member as such; 1,046
24
(c) By a member as such or by or on behalf of the members 1,048
against the corporation, a trustee DIRECTOR, an officer, or a 1,049
member as such. 1,051
(2) Division (I)(1) of this section shall apply to any 1,053
action brought in this state upon any contract made in this state 1,054
by a foreign corporation. 1,055
Sec. 1702.13. (A) The corporation shall keep a membership 1,064
book MAINTAIN A RECORD OF ITS MEMBERS containing the name and 1,065
address of each member, the date of his admission to membership, 1,067
and, if members are classified, the class to which he THE MEMBER 1,068
belongs.
(B) A corporation may issue certificates evidencing 1,070
membership in it, but a corporation incorporated on or after June 1,071
9, 1927, shall not issue certificates for shares. 1,072
(C) Membership in a corporation may be terminated in the 1,074
manner provided by law, the articles, or the regulations, and 1,075
upon the termination of membership for any cause, such fact and 1,076
the date of termination shall be recorded in the CORPORATION'S 1,077
membership book RECORDS. 1,078
(D) Unless the articles or the regulations otherwise 1,080
provide, all the rights and privileges of a member in the 1,081
corporation and its property shall cease on termination of his 1,082
membership. 1,083
(E) If permitted by the articles or the regulations of a 1,085
corporation, another nonprofit corporation or, A corporation for 1,087
profit, A LIMITED LIABILITY COMPANY, or a ANY partnership, may 1,089
become a member of the first mentioned corporation. 1,090
(F) Whenever the number of members of a corporation that, 1,092
under the law, the articles, or the regulations, must have a 1,093
specified number of members, is reduced below the specified 1,094
number, the corporation shall not be required because of that 1,095
reduction to cease carrying on its activities, but the continuing 1,096
members, if two or more, may fill all vacancies. 1,097
(G) UNLESS OTHERWISE PROVIDED IN THE ARTICLES OR 1,099
25
REGULATIONS OF A CORPORATION, ALL MEMBERS HAVE THE SAME 1,100
MEMBERSHIP RIGHTS AND PRIVILEGES.
Sec. 1702.14. Where neither the articles nor the 1,109
regulations provide for members thereof as such, or where a 1,110
corporation has in fact no members other than the trustees 1,111
DIRECTORS, the trustees DIRECTORS shall, for the purposes of any 1,112
statute or rule of law relating to corporations, be taken to be 1,113
the members of such corporation, and they shall have all the 1,114
rights and privileges of members; provided, EXCEPT that where the 1,115
provisions in sections 1702.01 to 1702.58, inclusive, of the 1,117
Revised Code THIS CHAPTER relating to meetings of trustees 1,118
DIRECTORS differ, it shall be sufficient to comply with the 1,119
provisions relating to trustees DIRECTORS. 1,120
Sec. 1702.15. Each corporation shall keep correct and 1,129
complete books and records of account, together with minutes of 1,130
the proceedings of its incorporators, members, trustees 1,131
DIRECTORS, and committees of the trustees DIRECTORS or members. 1,132
Subject to limitations prescribed in the articles or the 1,133
regulations upon the right of members of charitable corporations 1,134
to examine the books and records, all books and records of a 1,135
corporation, including the membership book RECORDS prescribed by 1,137
section 1702.13 of the Revised Code, may be examined by any
member or trustee DIRECTOR or the agent or attorney of either, 1,138
for any reasonable and proper purpose and at any reasonable time. 1,140
Sec. 1702.16. An annual meeting of voting members for the 1,149
election of trustees DIRECTORS and the consideration of reports 1,150
to be laid before such meeting shall be held on a date designated 1,152
by or in the manner provided for in the articles or the 1,153
regulations. In the absence of such a designation, the annual
meeting shall be held on the first Monday of the fourth month 1,154
following the close of each fiscal year of the corporation. When 1,155
the annual meeting is not held or trustees DIRECTORS are not 1,156
elected thereat, they may be elected at a special meeting called 1,158
for that purpose.
26
Sec. 1702.17. (A) Meetings of voting members may be 1,167
called by any of the following: 1,168
(1) The chairman CHAIRPERSON of the board, the president, 1,170
or, in case of the president's absence, death, or disability, the 1,172
vice-president authorized to exercise the authority of the 1,173
president;
(2) The trustees DIRECTORS by action at a meeting, or a 1,175
majority of the trustees DIRECTORS acting without a meeting; 1,177
(3) The lesser of (a) ten per cent of the voting members 1,179
or (b) twenty-five of such members, unless the articles or the 1,180
regulations specify for such purpose a smaller or larger 1,181
proportion or number, but not in excess of fifty per cent of such 1,182
members;
(4) Such other officers or persons as the articles or the 1,184
regulations authorize to call such meetings. 1,185
(B) Meetings of voting members may be held either within 1,187
or without this state if so provided in the articles or the 1,188
regulations. In the absence of any such provision, all meetings 1,189
shall be held at the principal office of the corporation in this 1,190
state.
Sec. 1702.18. Unless the articles or the regulations 1,199
provide for notice of meetings otherwise than as provided in this 1,200
section, written notice stating the time and place of a meeting 1,201
of the voting members, and, in case of a special meeting, the 1,202
purpose or purposes for which the meeting is called, shall be 1,203
given either by personal delivery or by mail IN THE MANNER
DESCRIBED IN SECTION 1702.02 OF THE REVISED CODE not less than 1,204
ten nor more than sixty days before the date of the meeting: (A) 1,205
to each member entitled to notice of the meeting; (B) by or at 1,206
the direction of the president or the secretary or any other 1,207
person required or permitted by the regulations to give notice or 1,208
the officers or persons calling the meeting. If mailed, such 1,209
notice shall be addressed to the member at his THE MEMBER'S
address as it appears on the records of the corporation. Notice 1,211
27
of adjournment of a meeting need not be given if the time and 1,212
place to which it is adjourned are fixed and announced at such 1,213
meeting.
Sec. 1702.19. Notice of the time, place, and purposes of 1,222
any meeting of voting members or trustees DIRECTORS, as the case 1,223
may be, whether required by law, the articles, the regulations, 1,225
or (in the case of trustees DIRECTORS) the bylaws, may be waived 1,227
in writing, either before or after the holding of such meeting,
by any member, or by any trustee DIRECTOR, which writing shall be 1,228
filed with or entered upon the records of the meeting. The 1,230
attendance of any member or any trustee DIRECTOR at any such 1,232
meeting without protesting, prior to or at the commencement of
the meeting, the lack of proper notice shall be deemed to be a 1,233
waiver by him THE MEMBER OR DIRECTOR of notice of such meeting. 1,235
Sec. 1702.21. (A) When any domestic nonprofit corporation 1,244
or domestic corporation for profit holds membership in a domestic 1,245
or foreign corporation, the chairman CHAIRPERSON of the board, 1,246
the president, any vice-president, the secretary, or the 1,248
treasurer of the corporation holding such membership, and any 1,249
such officer or cashier or trust officer of a banking or trust 1,250
corporation holding such membership, and any like officer of a 1,251
foreign nonprofit corporation or foreign corporation for profit, 1,252
or of a foreign banking or trust corporation, holding membership 1,253
in a domestic corporation, shall conclusively be deemed to have 1,254
authority to vote on behalf of that corporation, and to appoint 1,255
proxies and execute written consents, waivers, and releases on 1,256
its behalf, unless, before a vote is taken or a consent, waiver, 1,257
or release is acted upon, it appears by a certified copy of the 1,258
regulations, the bylaws, or a resolution of the trustees, 1,259
directors, or executive committee of that corporation that such 1,260
authority does not exist or is vested in some other officer or 1,261
person. 1,262
(B) WHEN ANY DOMESTIC OR FOREIGN LIMITED LIABILITY COMPANY 1,264
HOLDS MEMBERSHIP IN A DOMESTIC OF FOREIGN CORPORATION, ANY 1,265
28
MANAGER OR MEMBER OF THE LIMITED LIABILITY COMPANY HOLDING THAT 1,266
MEMBERSHIP SHALL CONCLUSIVELY BE DEEMED TO HAVE AUTHORITY TO VOTE 1,267
ON BEHALF OF THAT LIMITED LIABILITY COMPANY AND TO APPOINT 1,268
PROXIES AND EXECUTE WRITTEN CONSENTS, WAIVERS, AND RELEASES ON 1,269
ITS BEHALF, UNLESS BEFORE A VOTE IS TAKEN OR A CONSENT, WAIVER, 1,270
OR RELEASE IS ACTED UPON, IT APPEARS BY A CERTIFIED COPY OF THE 1,271
ARTICLES OF ORGANIZATION, OPERATING AGREEMENT, OR A RESOLUTION OF 1,272
THE MANAGERS OR THE MEMBERS OF THAT LIMITED LIABILITY COMPANY 1,273
THAT SUCH AUTHORITY DOES NOT EXIST OR IS VESTED IN SOME OTHER 1,274
REPRESENTATIVE OR PERSON. 1,275
(C) For the purpose of this section, a person exercising 1,277
such authority as such AN officer, REPRESENTATIVE, OR OTHER 1,279
PERSON ENTITLED TO VOTE AND ACTING IN THAT CAPACITY is 1,280
prima-facie deemed to be duly elected, qualified, and acting as 1,281
such THAT officer, REPRESENTATIVE, OR OTHER PERSON ENTITLED TO 1,282
VOTE AND ACTING IN THAT CAPACITY. 1,283
Sec. 1702.22. Unless the articles or the regulations 1,292
otherwise provide:
(A) The voting members present IN PERSON OR, IF PERMITTED, 1,294
BY MAIL OR BY PROXY, at any meeting of voting members shall 1,295
constitute a quorum for such meeting, but. THE AFFIRMATIVE VOTE 1,297
OF A MAJORITY OF THE VOTING MEMBERS PRESENT AT A MEETING AT WHICH
A QUORUM IS PRESENT SHALL BE NECESSARY FOR THE AUTHORIZATION OR 1,298
TAKING OF ANY ACTION VOTED UPON BY THE MEMBERS, EXCEPT THAT no 1,299
action required by law, the articles, or the regulations to be 1,301
authorized or taken by a specified proportion or number of the 1,302
voting members or of any class of voting members may be 1,303
authorized or taken by a lesser proportion or number;
(B) The affirmative vote of a majority of the voting 1,305
members present at a meeting at which a quorum is present shall 1,306
be necessary for the authorization or taking of any action voted 1,307
upon by the members;
(C) A majority of the voting members present at a meeting, 1,309
whether or not a quorum is present, may adjourn such meeting from 1,311
29
time to time.
Sec. 1702.23. Whenever, with respect to the authorization 1,320
or taking of any action by the members or the trustees DIRECTORS, 1,322
the articles or the regulations require the vote, consent, 1,324
waiver, or release of a greater proportion or number of the
members or the trustees DIRECTORS than that otherwise required by 1,326
law with respect thereto, the provisions of the articles or the 1,327
regulations shall control.
Sec. 1702.25. Unless the articles or the regulations 1,336
prohibit the authorization or taking of any action of the 1,337
INCORPORATORS, THE members, or of the trustees DIRECTORS without 1,339
a meeting, any action which THAT may be authorized or taken at a 1,340
meeting of the INCORPORATORS, THE members, or of the trustees 1,341
DIRECTORS, as the case may be, may be authorized or taken without 1,343
a meeting with the affirmative vote or approval of, and in a
writing or writings signed by, all of the INCORPORATORS, ALL OF 1,344
THE members, or all of the trustees DIRECTORS, as the case may 1,346
be, who would be entitled to notice of a meeting for such
purpose, or, in the case of members, such other proportion or 1,347
number of voting members, not less than a majority, as the 1,348
articles or the regulations permit. Any such writing shall be 1,349
filed with or entered upon the records of the corporation. Any 1,350
certificate with respect to the authorization or taking of any
such action which THAT is required to be filed in the office of 1,351
the secretary of state shall recite that the authorization or 1,353
taking of such action was in a writing or writings approved and 1,354
signed as specified in this section.
Sec. 1702.26. (A) At a meeting of members at which 1,363
trustees DIRECTORS are to be elected, only persons nominated as 1,365
candidates shall be eligible for election as trustees DIRECTORS. 1,366
(B) At all elections of trustees DIRECTORS the candidates 1,368
receiving the greatest number of votes shall be elected. 1,370
Sec. 1702.27. (A) Except as provided in division (B) of 1,379
this section and section 1702.521 of the Revised Code: 1,380
30
(1) The number of trustees DIRECTORS as fixed by the 1,382
articles or the regulations shall be not less than three or, if 1,384
not so fixed, the number shall be three, EXCEPT THAT IF THERE ARE 1,385
ONLY ONE OR TWO MEMBERS OF THE CORPORATION, THE NUMBER OF 1,386
DIRECTORS MAY BE LESS THAN THREE BUT NOT LESS THAN THE NUMBER OF
MEMBERS. 1,387
(2) Unless the articles or the regulations fix the number 1,389
of trustees DIRECTORS or provide the manner in which such number 1,391
may be fixed or changed by the voting members, the number may be 1,392
fixed or changed at a meeting of the voting members called for 1,393
the purpose of electing trustees DIRECTORS, by the affirmative 1,394
vote of a majority of the voting members present IN PERSON OR, IF 1,395
PERMITTED, BY MAIL OR BY PROXY, if a quorum is present, but no 1,396
reduction in the number of trustees DIRECTORS shall of itself 1,397
have the effect of shortening the term of any incumbent trustee 1,399
DIRECTOR.
(3) The trustee DIRECTOR shall have such qualifications, 1,401
if any, as are stated in the articles or the regulations. 1,403
(4) The articles or the regulations may provide that 1,405
persons occupying certain positions within or without the 1,406
corporation shall be ex officio trustees DIRECTORS, but, unless 1,407
otherwise provided in the articles or the regulations, such ex 1,409
officio trustees DIRECTORS shall not be considered for quorum 1,410
purposes and shall have no vote. 1,411
(B) The court of common pleas of the county in which the 1,413
corporation maintains its principal office may, pursuant to 1,414
division (A) of section 1702.521 of the Revised Code, order the 1,415
appointment of a provisional trustee DIRECTOR for the corporation 1,417
without regard to the number or qualifications of trustees 1,418
DIRECTORS stated in the articles or regulations of the 1,419
corporation.
Sec. 1702.28. (A) Unless the articles or the regulations 1,428
provide for a different term, each trustee DIRECTOR shall hold 1,429
office until the next annual meeting of voting members and until 1,431
31
his THE DIRECTOR'S successor is elected, or until his THE 1,432
DIRECTOR'S earlier resignation, removal from office, or death. 1,433
(B) The articles or the regulations may provide for the 1,435
classification of trustees DIRECTORS into classes and that the 1,436
terms of office of the several classes need not be uniform. 1,438
Sec. 1702.29. (A) The office of a trustee DIRECTOR 1,447
becomes vacant if he THE DIRECTOR dies or resigns, which 1,450
resignation shall take effect immediately or at such other time
as the trustee DIRECTOR may specify. 1,451
(B) A trustee DIRECTOR may be removed from office pursuant 1,453
to any procedure therefor provided in the articles or in the 1,455
regulations and such removal shall create a vacancy in the board. 1,456
(C) Unless the articles or the regulations otherwise 1,458
provide, the remaining trustees DIRECTORS, though less than a 1,459
majority of the whole authorized number of trustees DIRECTORS, 1,461
may, by the vote of a majority of their number, fill any vacancy 1,462
in the board for the unexpired term. Within the meaning of this 1,463
section, a vacancy exists in case the voting members increase the 1,464
authorized number of trustees DIRECTORS but fail at the meeting 1,465
at which such increase is authorized, or an adjournment thereof, 1,467
to elect the additional trustees DIRECTORS provided for, or in 1,468
case the voting members fail at any time to elect the whole 1,469
authorized number of trustees DIRECTORS. 1,470
Sec. 1702.30. (A) Except where the law, the articles, or 1,479
the regulations require that action be otherwise authorized or 1,480
taken, all of the authority of a corporation shall be exercised 1,481
by or under the direction of its trustees DIRECTORS. For their 1,482
own government, the trustees DIRECTORS may adopt bylaws that are 1,484
not inconsistent with the articles or the regulations. 1,485
(B) A trustee DIRECTOR shall perform his THE duties as OF 1,488
a trustee DIRECTOR, including his THE duties as a member of any 1,489
committee of the trustees DIRECTORS upon which he THE DIRECTOR 1,491
may serve, in good faith, in a manner he THE DIRECTOR reasonably 1,492
believes to be in or not opposed to the best interests of the 1,493
32
corporation, and with the care that an ordinarily prudent person 1,494
in a like position would use under similar circumstances. In 1,495
performing his THE duties OF A DIRECTOR, a trustee DIRECTOR is 1,497
entitled to rely on information, opinions, reports, or 1,499
statements, including financial statements and other financial 1,500
data, that are prepared or presented by the following: 1,501
(1) One or more trustees DIRECTORS, officers, or employees 1,503
of the corporation who the trustee DIRECTOR reasonably believes 1,505
are reliable and competent in the matters prepared or presented; 1,507
(2) Counsel, public accountants, or other persons as to 1,509
matters that the trustee DIRECTOR reasonably believes are within 1,510
the person's professional or expert competence; 1,512
(3) A committee of the trustees DIRECTORS upon which he 1,514
THE DIRECTOR does not serve, duly established in accordance with 1,517
a provision of the articles or the regulations, as to matters 1,518
within its designated authority, which committee the trustee 1,519
DIRECTOR reasonably believes to merit confidence. 1,521
(C) For purposes of division (B) of this section: 1,523
(1) A trustee DIRECTOR shall not be found to have failed 1,525
to perform his THE DIRECTOR'S duties in accordance with that 1,527
division, unless it is proved, by clear and convincing evidence, 1,529
in an action brought against the trustee DIRECTOR that he THE 1,530
DIRECTOR has not acted in good faith, in a manner he THE DIRECTOR 1,532
reasonably believes to be in or not opposed to the best interests 1,533
of the corporation, or with the care that an ordinarily prudent 1,534
person in a like position would use under similar circumstances. 1,535
Such an action includes, but is not limited to, an action that 1,536
involves or affects any of the following: 1,537
(a) A change or potential change in control of the 1,539
corporation; 1,540
(b) A termination or potential termination of his THE 1,542
DIRECTOR'S service to the corporation as a trustee DIRECTOR; 1,545
(c) His THE DIRECTOR'S service in any other position or 1,547
relationship with the corporation. 1,549
33
(2) A trustee DIRECTOR shall not be considered to be 1,551
acting in good faith if he THE DIRECTOR has knowledge concerning 1,553
the matter in question that would cause reliance on information, 1,555
opinions, reports, or statements that are prepared or presented 1,556
by the persons described in divisions (B)(1) to (3) of this 1,557
section, to be unwarranted. 1,558
(3) The provisions of this division do not limit relief 1,560
available under section 1702.301 of the Revised Code. 1,561
(D)(1) Subject to divisions (D)(2) and (3) of this 1,563
section, a trustee DIRECTOR is liable in damages for any act that 1,565
he THE DIRECTOR takes or fails to take as trustee DIRECTOR only 1,567
if it is proved, by clear and convincing evidence, in a court 1,569
with jurisdiction that the act or omission of the trustee 1,570
DIRECTOR was one undertaken with a deliberate intent to cause 1,572
injury to the corporation or was one undertaken with a reckless 1,573
disregard for the best interests of the corporation. 1,574
(2) Division (D)(1) of this section does not affect the 1,576
liability of a trustee DIRECTOR under section 1702.55 of the 1,577
Revised Code. 1,578
(3) Subject to division (D)(2) of this section, division 1,580
(D)(1) of this section does not apply if, and only to the extent 1,581
that, at the time of an act or omission of a trustee DIRECTOR 1,582
that is the subject of complaint, the articles or the regulations 1,584
of the corporation state, by specific reference to that division, 1,585
that its provisions do not apply to the corporation. 1,586
(E) For purposes of this section, in determining what he A 1,588
DIRECTOR reasonably believes to be in or not opposed to the best 1,590
interests of the corporation, a trustee DIRECTOR shall consider 1,591
the purposes of the corporation and may consider any of the 1,593
following:
(1) The interests of the employees, suppliers, creditors, 1,595
and customers of the corporation; 1,596
(2) The economy of this state and of the nation; 1,598
(3) Community and societal considerations; 1,600
34
(4) The long-term and short-term best interests of the 1,602
corporation, including, but not limited to, the possibility that 1,603
those interests may be best served by the continued independence 1,604
of the corporation. 1,605
(F) Divisions (C) and (D) of this section do not affect 1,607
the duties of a trustee DIRECTOR who acts in any capacity other 1,608
than in his THE capacity as a trustee DIRECTOR. 1,610
(G) IT IS INTENDED THAT A DIRECTOR OF A CORPORATION 1,612
ORGANIZED UNDER THIS CHAPTER SHOULD BE HELD TO A STANDARD OF CARE 1,613
THAT IS NO HIGHER THAN THE STANDARD APPLICABLE TO A DIRECTOR OF A 1,614
CORPORATION FOR PROFIT ORGANIZED UNDER CHAPTER 1701. OF THE 1,616
REVISED CODE.
Sec. 1702.301. (A) Unless otherwise provided in the 1,625
articles or the regulations: 1,626
(1) No contract, action, or transaction is void or 1,628
voidable with respect to a corporation because the contract, 1,629
action, or transaction is between or affects the corporation and 1,630
one or more of its trustees DIRECTORS or officers, or is between 1,631
or affects the corporation and any other person in which one or 1,633
more of the corporation's trustees DIRECTORS or officers are 1,634
directors, trustees, or officers, or in which one or more of the 1,636
corporation's trustees DIRECTORS or officers have a financial or 1,638
personal interest, or because one or more interested trustees 1,639
DIRECTORS or officers participate in or vote at the meeting of 1,641
the trustees DIRECTORS or a committee of the trustees DIRECTORS 1,643
that authorizes the contract, action, or transaction, if any of 1,644
the following applies: 1,645
(a) The material facts as to his or their THE DIRECTOR'S 1,647
relationship or interest and as to the contract, action, or 1,649
transaction are disclosed or are known to the trustees DIRECTORS 1,650
or the committee, and the trustees DIRECTORS or committee, in 1,652
good faith reasonably justified by the material facts, authorizes 1,654
the contract, action, or transaction by the affirmative vote of a 1,655
majority of the disinterested trustees DIRECTORS, even though the 1,656
35
disinterested trustees DIRECTORS constitute less than a quorum of 1,658
the trustees DIRECTORS or the committee;
(b) The material facts as to his or their THE DIRECTOR'S 1,660
relationship or interest and as to the contract, action, or 1,662
transaction are disclosed or are known to the members entitled to 1,663
vote on the contract, action, or transaction, and the contract, 1,664
action, or transaction is specifically approved at a meeting of 1,665
the members held for the purpose of voting on the contract, 1,666
action, or transaction, by the affirmative vote of a majority of 1,667
the voting members of the corporation who are not interested in 1,668
the contract, action, or transaction; 1,669
(c) The contract, action, or transaction is fair as to the 1,671
corporation as of the time it is authorized or approved by the 1,672
trustees DIRECTORS, a committee of the trustees DIRECTORS, or the 1,674
members.
(2) Common or interested trustees DIRECTORS may be counted 1,676
in determining the presence of a quorum at a meeting of the 1,677
trustees DIRECTORS, or of a committee of the trustees DIRECTORS, 1,679
that authorizes such a contract, action, or transaction. 1,680
(3) The trustees DIRECTORS, by the affirmative vote of a 1,682
majority of those in office, and irrespective of any financial or 1,684
personal interest of any of the trustees DIRECTORS, shall have 1,685
authority to establish reasonable compensation, which may include 1,687
pension, disability, and death benefits, for services to the 1,688
corporation by trustees DIRECTORS and officers, or to delegate 1,689
that authority to establish reasonable compensation to one or 1,691
more officers or trustees DIRECTORS. 1,692
(B) Divisions (A)(1) and (2) of this section do not limit 1,694
or otherwise affect the liability of trustees DIRECTORS under 1,695
section 1702.55 of the Revised Code. 1,697
(C) For purposes of division (A) of this section, a 1,699
trustee DIRECTOR is not an interested trustee DIRECTOR solely 1,701
because the subject of a contract, action, or transaction may 1,702
involve or effect a change in control of the corporation or his 1,703
36
THE DIRECTOR'S continuation in office as a trustee DIRECTOR of 1,705
the corporation.
(D) For purposes of this section, "action" means a 1,707
resolution that is adopted by the trustees DIRECTORS or a 1,708
committee of the trustees DIRECTORS. 1,710
Sec. 1702.31. Unless otherwise provided in the articles, 1,719
regulations, or bylaws, and subject to the exceptions applicable 1,720
during an emergency for which provision is made in division (G) 1,721
of section 1702.11 of the Revised Code: 1,722
(A) Meetings of the trustees DIRECTORS may be called by 1,724
the chairman CHAIRPERSON of the board, the president, any 1,727
vice-president, or any two trustees DIRECTORS; 1,728
(B) Meetings of the trustees DIRECTORS may be held at any 1,730
place within or without the state and, unless the articles or 1,731
regulations prohibit participation by trustees DIRECTORS at a 1,732
meeting by means of communications equipment, meetings of the 1,734
trustees DIRECTORS may be held through any communications 1,736
equipment if all persons participating can hear each other and 1,737
participation in a meeting pursuant to this division shall 1,738
constitute presence at such meeting; 1,739
(C) Written notice of the time and place of each meeting 1,741
of the trustees DIRECTORS shall be given to each trustee DIRECTOR 1,743
either by personal delivery or by mail, telegram, or cablegram at 1,744
least two days before the meeting, which notice need not specify 1,745
the purposes of the meeting; 1,746
(D) Notice of adjournment of a meeting need not be given 1,748
if the time and place to which it is adjourned are fixed and 1,749
announced at such meeting. 1,750
Sec. 1702.32. Unless the articles or the regulations 1,759
otherwise provide, and subject to the exceptions applicable 1,760
during an emergency for which provision is made in division (G) 1,761
in OF section 1702.11 of the Revised Code, a majority of the 1,763
whole authorized number of trustees DIRECTORS is necessary to 1,764
constitute a quorum for a meeting of the trustees DIRECTORS, 1,765
37
except that a majority of the trustees DIRECTORS in office 1,767
constitutes a quorum for filling a vacancy in the board. The act
of a majority of the trustees DIRECTORS present at a meeting at 1,768
which a quorum is present is the act of the board, unless the act 1,770
of a greater number is required by the articles, the regulations, 1,771
or the bylaws.
Sec. 1702.33. (A) The regulations may provide for the 1,780
creation by the trustees DIRECTORS of an executive committee or 1,781
any other committee of the trustees DIRECTORS, to consist of not 1,783
less than three trustees ONE OR MORE DIRECTORS, and may authorize 1,785
the delegation to any such committee of any of the authority of 1,787
the trustees DIRECTORS, however conferred. 1,788
(B) The trustees DIRECTORS may appoint one or more 1,790
trustees DIRECTORS as alternate members of any such committee, 1,792
who may take the place of any absent member or members at any 1,793
meeting of the particular committee. 1,794
(C) Each such committee shall serve at the pleasure of the 1,796
trustees DIRECTORS, shall act only in the intervals between 1,797
meetings of the trustees DIRECTORS, and shall be subject to the 1,799
control and direction of the trustees DIRECTORS. 1,801
(D) Unless otherwise provided in the regulations or 1,803
ordered by the trustees DIRECTORS, any such committee may act by 1,804
a majority of its members at a meeting or by a writing or 1,806
writings signed by all of its members. 1,807
(E) Unless participation by members of any such committee 1,809
at a meeting by means of communications equipment is prohibited 1,810
by the articles, the regulations, or an order of the trustees 1,811
DIRECTORS, meetings of the particular committee may be held 1,813
through any communications equipment if all persons participating 1,814
can hear each other. Participation in a meeting pursuant to this 1,815
division constitutes presence at the meeting. 1,816
(F) An act or authorization of an act by any such 1,818
committee within the authority delegated to it shall be as 1,819
effective for all purposes as the act or authorization of the 1,820
38
trustees DIRECTORS. 1,821
Sec. 1702.34. (A) The officers of a corporation shall 1,830
consist of a president, a secretary, a treasurer, and, if 1,831
desired, a chairman CHAIRPERSON of the board, one or more 1,832
vice-presidents, and such other officers and assistant officers 1,834
as may be deemed necessary, each of whom may be designated by 1,835
such other titles as may be provided in the articles, the 1,836
regulations, the bylaws, or resolutions of the trustees 1,837
DIRECTORS. Unless the articles or the regulations otherwise 1,839
provide, none of the officers need be a trustee DIRECTOR. Any 1,840
two or more offices may be held by the same person. The officers 1,842
shall be elected or appointed at such time, in such manner, and 1,843
for such terms as may be prescribed in the articles or the 1,844
regulations. In the absence of any such provision, all officers 1,845
shall be elected annually by the trustees DIRECTORS.
(B) Unless the articles or the regulations otherwise 1,847
provide, and subject to the exceptions applicable during an 1,848
emergency for which provision is made in division (G) of section 1,849
1702.11 of the Revised Code: 1,850
(1) All officers, as between themselves and the 1,852
corporation, shall respectively have such authority and perform 1,853
such duties as are determined by the persons authorized to elect 1,854
or appoint them; 1,855
(2) Any officer may be removed, with or without cause, by 1,857
the persons authorized to elect or appoint him THE OFFICER 1,858
without prejudice to the contract rights of such officer. The 1,860
election or appointment of an officer for a given term, or a 1,861
general provision in the articles, the regulations, or the bylaws 1,862
with respect to term of office, shall not be deemed to create 1,863
contract rights; 1,864
(3) The persons authorized to elect or appoint officers 1,866
may fill any vacancy in any office occurring from whatever 1,867
reason. 1,868
Sec. 1702.36. The trustees DIRECTORS may authorize any 1,877
39
mortgage, pledge, or deed of trust of all or any of the property 1,879
of the corporation of any description, or any interest therein, 1,880
for the purpose of securing the payment or performance of any 1,881
obligation or contract. Unless the articles or the regulations,
or the terms of any trust on which the corporation holds any 1,882
particular property, otherwise provide, no vote or consent of 1,883
members or authorization from the court under section 1715.39 of 1,884
the Revised Code is necessary for such action.
Sec. 1702.38. (A) The articles may be amended from time 1,893
to time in any respect if the articles as amended set forth all 1,894
such provisions as are required in, and only such provisions as 1,895
may properly be in, original articles filed at the time of 1,896
adopting the amendment, other than with respect to the initial 1,897
trustees; provided DIRECTORS, EXCEPT that a charitable 1,898
corporation shall not amend its articles in such manner that it 1,900
will cease to be a charitable corporation. 1,901
(B) Without limiting the generality of such authority, the 1,903
articles may be amended to: 1,904
(1) Change the name of the corporation; 1,906
(2) Change the place in this state where its principal 1,908
office is to be located; 1,909
(3) Change, enlarge, or diminish its purpose or purposes; 1,911
(4) Change any provision of the articles or add any 1,913
provision that may properly be included therein. 1,914
(C) The voting members PRESENT IN PERSON OR, IF PERMITTED, 1,916
BY MAIL OR BY PROXY, at a meeting held for such purpose may adopt 1,918
an amendment by the affirmative vote of a majority of the voting 1,919
members present if a quorum is present, or, if the articles or 1,920
the regulations provide or permit, by the affirmative vote of a 1,921
greater or lesser proportion or number of the voting members, and 1,922
by such affirmative vote of the voting members of any particular 1,923
class as is required by the articles or the regulations. 1,924
(D) In addition to or in lieu of adopting an amendment to 1,926
the articles, the voting members may adopt amended articles by 1,927
40
the same action or vote as that required to adopt the amendment. 1,928
(E) The trustees DIRECTORS may adopt amended articles to 1,930
consolidate the original articles and all previously adopted 1,932
amendments to the articles that are in force at the time, or the 1,933
voting members at a meeting held for such purpose may adopt such 1,934
amended articles by the same vote as that required to adopt an 1,935
amendment.
(F) Amended articles shall set forth all such provisions 1,937
as are required in, and only such provisions as may properly be 1,938
in, original articles filed at the time of adopting the amended 1,939
articles, other than with respect to the initial trustees 1,940
DIRECTORS, and shall contain a statement that they supersede the 1,942
existing articles. 1,943
(G) Upon the adoption of any amendment or amended 1,945
articles, a certificate containing a copy of the resolution 1,946
adopting the amendment or amended articles, a statement of the 1,947
manner of its adoption, and, in the case of adoption of the 1,948
resolution by the trustees DIRECTORS, a statement of the basis 1,949
for such adoption, shall be filed with the secretary of state, 1,951
and thereupon the articles shall be amended accordingly, and the 1,952
amended articles shall supersede the existing articles. The 1,953
certificate shall be signed by any authorized officer of the 1,954
corporation. 1,955
(H) A copy of an amendment or amended articles changing 1,957
the name of a corporation or its principal office in this state, 1,958
certified by the secretary of state, may be filed for record in 1,959
the office of the county recorder of any county in this state, 1,960
and for such recording the county recorder shall charge and 1,961
collect the same fee as provided for in division (A) of section 1,962
317.32 of the Revised Code. Such copy shall be recorded in the 1,963
records of deeds. 1,964
Sec. 1702.39. (A) Unless the articles or the regulations, 1,973
or the terms of any trust on which the corporation holds any 1,974
particular property, otherwise provide, a lease, sale, exchange, 1,975
41
transfer, or other disposition of any assets of a MUTUAL BENEFIT 1,976
corporation may be made without the necessity of procuring 1,977
authorization from the court under section 1715.39 of the Revised 1,978
Code, upon such terms and for such consideration, which may 1,979
consist, in whole or in part, of money or other property, 1,980
including shares or other securities or promissory obligations of 1,981
any corporation for profit, domestic or foreign, as may be
authorized by the trustees; provided DIRECTORS, EXCEPT that a 1,982
lease, sale, exchange, transfer, or other disposition of all, or 1,984
substantially all, the assets may be made only when such 1,985
transaction is also authorized (either before or after
authorization by the trustees DIRECTORS) by the voting members 1,986
PRESENT IN PERSON OR, IF PERMITTED, BY PROXY, at a meeting held 1,987
for such purpose, by the affirmative vote of a majority of the 1,989
voting members present if a quorum is present, or, if the 1,990
articles or the regulations provide or permit, by the affirmative 1,991
vote of a greater or lesser proportion or number of the voting
members, and by such affirmative vote of the voting members of 1,992
any particular class as is required by the articles or the 1,993
regulations. Notice of the meeting of the members shall be given 1,994
to all members whether or not entitled to vote thereat. Such 1,996
notice shall be accompanied by a copy or summary of the terms of 1,997
such transaction.
(B) A PUBLIC BENEFIT CORPORATION MAY NOT LEASE, SELL, 1,999
EXCHANGE, TRANSFER, OR OTHERWISE DISPOSE OF ASSETS WITH VALUE 2,000
EQUAL TO MORE THAN FIFTY PER CENT OF THE FAIR MARKET VALUE OF THE 2,001
NET TANGIBLE AND INTANGIBLE ASSETS, INCLUDING GOODWILL, OF THE 2,002
CORPORATION OVER A PERIOD OF TWENTY-FOUR CONSECUTIVE MONTHS IN A 2,003
TRANSACTION OR SERIES OF TRANSACTIONS THAT ARE OUTSIDE THE 2,004
ORDINARY COURSE OF ITS BUSINESS OR THAT ARE NOT IN ACCORDANCE 2,005
WITH THE PURPOSE OR PURPOSES FOR WHICH THE CORPORATION WAS 2,007
ORGANIZED, AS SET FORTH IN ITS ARTICLES OR THE TERMS OF ANY TRUST 2,008
ON WHICH THE CORPORATION HOLDS SUCH ASSETS, UNLESS EITHER OF THE 2,009
FOLLOWING APPLIES:
42
(1) THE TRANSACTION HAS RECEIVED THE PRIOR APPROVAL OF THE 2,011
COURT OF COMMON PLEAS OF THE COUNTY IN THIS STATE IN WHICH THE 2,012
PRINCIPAL OFFICE OF THE CORPORATION IS LOCATED, IN A PROCEEDING 2,013
OF WHICH THE ATTORNEY GENERAL HAS BEEN GIVEN WRITTEN NOTICE; 2,014
(2) THE CORPORATION HAS PROVIDED WRITTEN NOTICE OF THE 2,016
PROPOSED TRANSACTION, INCLUDING A COPY OR SUMMARY OF THE TERMS OF 2,017
SUCH TRANSACTION, AT LEAST TWENTY DAYS BEFORE CONSUMMATION OF THE 2,018
LEASE, SALE, EXCHANGE, TRANSFER, OR OTHER DISPOSITION OF THE 2,019
ASSETS, TO THE ATTORNEY GENERAL AND TO THE MEMBERS OF THE 2,020
CORPORATION, AND THE PROPOSED TRANSACTION HAS BEEN APPROVED BY 2,021
THE VOTING MEMBERS PRESENT IN PERSON OR, IF PERMITTED, BY PROXY, 2,022
AT A MEETING HELD FOR SUCH PURPOSE, BY THE AFFIRMATIVE VOTE OF A 2,024
MAJORITY OF THE VOTING MEMBERS PRESENT IF A QUORUM IS PRESENT, 2,025
OR, IF THE ARTICLES OR REGULATIONS PROVIDE OR PERMIT, BY THE 2,026
AFFIRMATIVE VOTE OF A GREATER OR LESSER PROPORTION OR NUMBER OF
THE VOTING MEMBERS, AND IF THE ARTICLES OR REGULATIONS REQUIRE, 2,028
BY THE AFFIRMATIVE VOTE OF THE VOTING MEMBERS OF ANY PARTICULAR 2,029
CLASS.
(C) THE ATTORNEY GENERAL MAY INSTITUTE A CIVIL ACTION TO 2,031
ENFORCE THE REQUIREMENTS OF DIVISION (B) OF THIS SECTION IN THE 2,032
COURT OF COMMON PLEAS OF THE COUNTY IN THIS STATE IN WHICH THE 2,033
PRINCIPAL OFFICE OF THE CORPORATION IS LOCATED OR IN THE FRANKLIN 2,035
COUNTY COURT OF COMMON PLEAS. IN ADDITION TO ANY CIVIL REMEDIES 2,040
THAT MAY EXIST UNDER COMMON LAW OR THE REVISED CODE, A COURT MAY 2,042
RESCIND THE TRANSACTION OR GRANT INJUNCTIVE RELIEF OR IMPOSE ANY 2,043
COMBINATION OF THESE REMEDIES.
(D) The corporation by its trustees DIRECTORS may abandon 2,046
the proposed lease, sale, exchange, transfer, or other 2,048
disposition of all or substantially all of the assets of the 2,050
corporation PURSUANT TO DIVISION (A) OR (B) OF THIS SECTION, 2,051
subject to the contract rights of other persons, if such power of 2,052
abandonment is conferred upon the trustees DIRECTORS either by 2,053
the terms of the transaction or by the same vote of voting 2,054
members and at the same meeting of members as that referred to in 2,055
43
division (A) OR (B) of this section, AS APPLICABLE, or at any 2,057
subsequent meeting.
(C)(E) An action to set aside a conveyance by a 2,059
corporation, on the ground that any section of the Revised Code 2,061
applicable to the lease, sale, exchange, transfer, or other 2,062
disposition of all or substantially all the assets of such 2,063
corporation has not been complied with, shall be brought within 2,064
ninety days ONE YEAR after such transaction, or such THE action 2,066
shall be forever barred. 2,067
Sec. 1702.41. (A)(1) Any two or more corporations may 2,076
merge into a single corporation which shall be one of the 2,077
constituent corporations, or may consolidate into a single 2,078
corporation which shall be a new corporation to be formed by the 2,079
consolidation; except that a charitable corporation may merge 2,080
into or may consolidate with other charitable corporations only, 2,081
and the surviving or new corporation, as the case may be, must be 2,082
a charitable corporation. 2,083
(B)(2) To effect such merger or consolidation, the 2,085
trustees DIRECTORS of each constituent corporation shall approve 2,087
an agreement of merger or consolidation to be signed by the 2,088
chairman CHAIRPERSON of the board, THE president, or a 2,090
vice-president, and by the secretary or an assistant secretary, 2,092
which agreement shall set forth:
(1)(a) That the named constituent corporations have agreed 2,094
to merge into a specified constituent corporation, herein 2,095
designated the surviving corporation, or that the named 2,096
constituent corporations have agreed to consolidate into a new 2,097
corporation to be formed by the consolidation, herein designated 2,098
the new corporation; 2,099
(2)(b) The name of the surviving or new corporation, which 2,101
may be the same as or similar to that of any constituent 2,102
corporation; 2,103
(3)(c) The place in this state where the principal office 2,105
of the surviving or new corporation is to be located; 2,106
44
(4) The purpose or purposes of the surviving or new 2,108
corporation which, in case the constituent corporations are 2,109
charitable corporations, must be such that the surviving or new 2,110
corporation will also be a charitable corporation; 2,111
(5)(d) The names and addresses of the first trustees 2,113
DIRECTORS and officers of the surviving or new corporation, and, 2,115
if desired, their term or terms of office; 2,116
(6)(e) The name and address of the statutory agent upon 2,118
whom any process, notice, or demand against any constituent 2,119
corporation or the surviving or new corporation may be served; 2,120
(7)(f) The terms of the merger or consolidation and the 2,122
mode of carrying the same into effect; 2,123
(8)(g) The regulations of the surviving or new corporation 2,125
or a provision to the effect that the regulations of one of the 2,126
constituent corporations shall be the regulations of the 2,127
surviving or new corporation or to the effect that the voting 2,128
members or the trustees DIRECTORS of the surviving or new 2,129
corporation may adopt regulations, or any combination thereof. 2,131
(C)(3) The agreement may also set forth: 2,133
(1)(a) The specification of a date, which may be the date 2,135
of the filing of the agreement or a date subsequent thereto, upon 2,136
which the merger or consolidation shall become effective; 2,137
(2)(b) A provision conferring upon the trustees DIRECTORS 2,140
of one or more of the constituent corporations the power to 2,141
abandon the merger or consolidation prior to the filing of the 2,142
agreement;
(3)(c) Any additional provision permitted to be included 2,144
in the articles of a newly formed corporation; 2,145
(4)(d) Any additional provision deemed necessary or 2,147
desirable with respect to the proposed merger or consolidation. 2,148
(B)(1) WITHOUT THE PRIOR APPROVAL OF THE COURT OF COMMON 2,150
PLEAS OF THE COUNTY IN THIS STATE IN WHICH THE PRINCIPAL OFFICE 2,151
OF THE CORPORATION IS LOCATED, IN A PROCEEDING OF WHICH THE 2,152
ATTORNEY GENERAL HAS BEEN GIVEN WRITTEN NOTICE, A PUBLIC BENEFIT 2,153
45
CORPORATION MAY MERGE ONLY WITH ANY OF THE FOLLOWING:
(a) A PUBLIC BENEFIT CORPORATION; 2,155
(b) A FOREIGN CORPORATION THAT WOULD QUALIFY UNDER THE 2,158
REVISED CODE AS A PUBLIC BENEFIT CORPORATION;
(c) A MUTUAL BENEFIT CORPORATION OR A BUSINESS 2,160
CORPORATION, PROVIDED THAT THE PUBLIC BENEFIT CORPORATION IS THE 2,161
SURVIVING CORPORATION AND CONTINUES TO BE A PUBLIC BENEFIT 2,162
CORPORATION;
(d) A BUSINESS CORPORATION OR MUTUAL BENEFIT CORPORATION, 2,164
PROVIDED THAT ALL OF THE FOLLOWING APPLY: 2,165
(i) ON OR PRIOR TO THE EFFECTIVE DATE OF THE MERGER, 2,167
ASSETS WITH A VALUE EQUAL TO THE GREATER OF THE FAIR MARKET VALUE 2,168
OF THE NET TANGIBLE AND INTANGIBLE ASSETS, INCLUDING GOODWILL, OF 2,169
THE PUBLIC BENEFIT CORPORATION OR THE FAIR MARKET VALUE OF THE 2,170
PUBLIC BENEFIT CORPORATION IF IT IS TO BE OPERATED AS A BUSINESS 2,171
CONCERN, ARE TRANSFERRED OR CONVEYED TO ONE OR MORE PERSONS THAT 2,172
WOULD HAVE RECEIVED ITS ASSETS UNDER SECTION 1702.49 OF THE
REVISED CODE HAD IT VOLUNTARILY DISSOLVED. 2,173
(ii) IT RETURNS, TRANSFERS, OR CONVEYS ANY ASSETS HELD BY 2,175
IT UPON A CONDITION REQUIRING RETURN, TRANSFER, OR CONVEYANCE, 2,176
WHICH CONDITION OCCURS BY REASON OF THE MERGER, IN ACCORDANCE 2,177
WITH THAT CONDITION;
(iii) THE MERGER IS APPROVED BY A MAJORITY OF DIRECTORS OF 2,179
THE PUBLIC BENEFIT CORPORATION WHO WILL NOT RECEIVE ANY FINANCIAL 2,180
OR OTHER BENEFIT, DIRECTLY OR INDIRECTLY, AS A RESULT OF THE 2,181
MERGER OR BY AGREEMENT, AND WHO ARE NOT AND WILL NOT AS A RESULT 2,182
OF THE MERGER BECOME MEMBERS OF, SHAREHOLDERS IN, OR OFFICERS, 2,183
EMPLOYEES, AGENTS, OR CONSULTANTS OF THE SURVIVING CORPORATION. 2,184
(2) AT LEAST TWENTY DAYS BEFORE CONSUMMATION OF ANY MERGER 2,186
OR CONSOLIDATION OF A PUBLIC BENEFIT CORPORATION PURSUANT TO 2,187
DIVISION (B)(1)(d) OF THIS SECTION, NOTICE, INCLUDING A COPY OF 2,188
THE PROPOSED PLAN OF MERGER OR CONSOLIDATION, SHALL BE DELIVERED 2,189
TO THE ATTORNEY GENERAL. 2,190
(3) WITHOUT THE PRIOR WRITTEN CONSENT OF THE ATTORNEY 2,192
46
GENERAL OR OF THE COURT OF COMMON PLEAS OF THE COUNTY IN THIS 2,193
STATE IN WHICH THE PRINCIPAL OFFICE OF THE CORPORATION IS 2,194
LOCATED, IN A PROCEEDING IN WHICH THE ATTORNEY GENERAL HAS BEEN 2,195
GIVEN NOTICE, NO MEMBER OF A PUBLIC BENEFIT CORPORATION IN THAT 2,196
PERSON'S CAPACITY AS A MEMBER MAY RECEIVE OR KEEP ANYTHING AS A
RESULT OF A MERGER OTHER THAN MEMBERSHIP IN THE SURVIVING PUBLIC 2,197
BENEFIT CORPORATION. THE COURT SHALL APPROVE THE TRANSACTION IF 2,198
IT IS IN THE PUBLIC INTEREST.
(4) THE ATTORNEY GENERAL MAY INSTITUTE A CIVIL ACTION TO 2,200
ENFORCE THE REQUIREMENTS OF DIVISIONS (B)(2) AND (3) OF THIS 2,201
SECTION IN THE COURT OF COMMON PLEAS OF THE COUNTY IN THIS STATE 2,202
IN WHICH THE PRINCIPAL OFFICE OF THE CORPORATION IS LOCATED OR IN 2,203
THE FRANKLIN COUNTY COURT OF COMMON PLEAS. IN ADDITION TO ANY 2,204
CIVIL REMEDIES THAT MAY EXIST UNDER COMMON LAW OR THE REVISED 2,205
CODE, A COURT MAY RESCIND THE TRANSACTION OR GRANT INJUNCTIVE 2,206
RELIEF OR IMPOSE ANY COMBINATION OF THESE REMEDIES.
(C) A CORPORATION MAY BE THE SURVIVING ENTITY IN A MERGER 2,208
OR CONSOLIDATION WITH ONE OR MORE BUSINESS CORPORATIONS, OR A 2,210
CORPORATION MAY MERGE OR CONSOLIDATE INTO ONE OR MORE BUSINESS 2,211
CORPORATIONS WITH A BUSINESS CORPORATION AS THE SURVIVING ENTITY, 2,212
PROVIDED THAT THE CORPORATION COMPLIES WITH THE PROVISIONS OF 2,213
THIS SECTION AND SECTIONS 1702.42 AND 1702.43 OF THE REVISED 2,215
CODE, AS APPLICABLE TO THE CORPORATION, AND THAT THE BUSINESS 2,216
CORPORATION COMPLIES WITH THE PROVISIONS OF SECTION 1701.781 OR 2,217
1701.791 OF THE REVISED CODE, AS APPLICABLE TO THE BUSINESS 2,218
CORPORATION. 2,219
Sec. 1702.42. (A) The trustees DIRECTORS of each 2,228
constituent corporation, upon approving such AN agreement of 2,230
merger or consolidation, shall direct that the agreement be 2,232
submitted to the voting members entitled to vote on it at a
meeting of voting members of such corporation held for such THAT 2,233
purpose, and notice of such meeting shall be given to all members 2,235
of such constituent corporation whether or not entitled to vote 2,236
thereat. The notice shall be accompanied by a copy or summary of 2,238
47
the agreement.
(B) At each such meeting, a vote of the members shall be 2,240
taken on the proposed agreement. In order to be adopted, the 2,241
agreement (including any amendments or additions thereto proposed 2,242
at each such meeting) must receive the affirmative vote of a 2,243
majority of the voting members of each constituent corporation 2,244
present IN PERSON OR, IF PERMITTED, BY MAIL OR BY PROXY, at each 2,245
such meeting if a quorum is present, or, if the articles or the 2,246
regulations of such corporation provide or permit, the
affirmative vote of a greater or lesser proportion or number of 2,247
the voting members, and such affirmative vote of the voting 2,248
members of any particular class as is required by the articles or 2,249
the regulations of such corporation. If the agreement would 2,250
authorize any particular corporate action which THAT, under any 2,252
applicable provision of law or under the existing articles of one
or more of the constituent corporations, could be authorized only 2,253
by or pursuant to a specified vote of voting members, such 2,254
agreement (including any amendments or additions thereto proposed 2,255
at each such meeting) in order to be adopted must receive the 2,256
affirmative vote so specified.
(C) At any time prior to the filing of the agreement, the 2,258
merger or consolidation may be abandoned by the trustees 2,259
DIRECTORS of one or more of the constituent corporations, if such 2,261
THE power of abandonment is conferred upon such trustees 2,263
DIRECTORS either by the agreement or by the same vote of voting 2,264
members of each of the constituent corporations and at the same 2,265
meetings as those referred to in division (B) of this section or 2,266
at subsequent meetings.
Sec. 1702.44. When such merger or consolidation becomes 2,276
effective: 2,277
(A) The separate existence of all the constituent 2,279
corporations, except the surviving or new corporation, shall 2,280
cease, except that, whenever a conveyance, assignment, transfer, 2,281
deed, or other instrument, or act, is necessary to vest property 2,282
48
or rights in the surviving or new corporation, the officers of 2,283
the respective constituent corporation shall execute, 2,284
acknowledge, and deliver such instruments, and do such acts, and 2,285
for such purposes the existence of the constituent corporations 2,286
and the authority of their respective officers and trustees 2,287
DIRECTORS shall be deemed continued notwithstanding the merger or 2,289
consolidation;
(B) The constitutent CONSTITUENT corporations shall become 2,291
a single corporation which, in the case of a merger, shall be 2,292
that one of the constituent corporations designated in the 2,293
agreement of merger as the surviving corporation and, in the case 2,294
of a consolidation, shall be the new corporation provided for in 2,295
the agreement of consolidation; 2,296
(C) The surviving or new corporation shall have all the 2,298
rights, privileges, immunities, powers, franchises, and authority 2,299
and shall be subject to all the obligations of a corporation 2,300
formed under sections 1702.01 to 1702.58 of the Revised Code THIS 2,301
CHAPTER; 2,302
(D) The surviving or new corporation shall thereupon and 2,304
thereafter possess all the rights, privileges, immunities, 2,305
powers, franchises, and authority, as well of a public as of a 2,306
private nature, of each of the constituent corporations; and all 2,307
property of every description, and every interest therein, and 2,308
all obligations, of or belonging to or due to each of the 2,309
constituent corporations, shall thereafter be taken and deemed to 2,310
be transferred to and vested in the surviving or new corporation 2,311
without further act or deed; and any right or interest in respect 2,312
to any past or future devise, bequest, conditional gift, or 2,313
trust, property, or fund restricted to particular uses, when 2,314
vested in or claimed by such surviving or new corporation as a 2,315
result of such merger or consolidation, shall belong to it as a 2,316
continuation without interruption of the existence and identity 2,317
of the constituent organization originally named as taker or 2,318
beneficiary; and title to any real estate, or any interest 2,319
49
therein, vested in any of the constituent corporations shall not 2,320
revert or in any way be impaired by reason of such merger or 2,321
consolidation; 2,322
(E) To the extent permitted by the laws of any other state 2,324
in which any constituent corporation has property, the provisions 2,325
of division (D) of this section apply in such state; 2,326
(F) The surviving or new corporation shall thenceforth be 2,328
liable for all the obligations of each of the constituent 2,329
corporations; and any claim existing or action or proceeding 2,330
pending by or against any of the constituent corporations may be 2,331
prosecuted to judgment, with right of appeal as in other cases, 2,332
as if such merger or consolidation had not taken place, or the 2,333
surviving or new corporation may be substituted in its place; 2,334
(G) All the rights of creditors of each constituent 2,336
corporation shall be preserved unimpaired, and all liens upon the 2,337
property of any of the constituent corporations shall be 2,338
preserved unimpaired, limited in lien to the property affected by 2,339
such liens immediately prior to the effective date of the merger 2,340
or consolidation; 2,341
(H) The agreement shall operate as amended articles in the 2,343
case of a merger and as original articles in the case of 2,344
consolidation. 2,345
Sec. 1702.45. One or more domestic corporations may merge 2,354
or consolidate with one or more foreign corporations in the 2,355
following manner, if such merger or consolidation is permitted by 2,356
the laws of each state under the laws of which any constituent 2,357
foreign corporation exists:
(A) Each domestic corporation shall comply with the 2,359
provisions of sections 1702.41, 1702.42, and 1702.43 of the 2,360
Revised Code, and each foreign corporation shall comply with the 2,361
applicable provisions of the laws of the state under which it 2,362
exists, except that the agreement of merger or consolidation, by 2,363
whatever name designated, shall comply with divisions (B) and (C) 2,364
of this section, and except that a charitable corporation may
50
merge into or may consolidate with other charitable corporations 2,365
only, and the surviving or new corporation, as the case may be, 2,366
must be a charitable corporation ANY MERGER OF CONSOLIDATION OF A 2,367
PUBLIC BENEFIT CORPORATION, WHETHER DOMESTIC OR FOREIGN, SHALL 2,368
COMPLY WITH DIVISION (B) OF SECTION 1702.41 OF THE REVISED CODE; 2,369
(B) The agreement shall set forth all statements and 2,371
matters required by section 1702.41 of the Revised Code, except 2,372
that the statement of the place in this state where the principal 2,373
office of the surviving or new corporation is to be located and 2,374
the statement with respect to the appointment of the statutory 2,375
agent shall be set forth only if the surviving or new corporation
is to be a domestic corporation. In addition, the agreement 2,376
shall set forth:
(1) The names of the states under the laws of which each 2,378
constituent corporation exists; 2,379
(2) All statements and matters required to be set forth in 2,381
agreements of merger or consolidation by the laws of each state 2,382
under the laws of which any constituent foreign corporation 2,383
exists;
(3) If the surviving or new corporation is to be a foreign 2,385
corporation:
(a) the place where the principal office of the surviving 2,387
or new corporation is to be located in the state under the laws 2,388
of which the surviving or new corporations is to exist; 2,389
(b) the consent by the surviving or new corporation that 2,391
it may be sued and served with process in this state in any 2,392
proceeding for the enforcement of any obligation of any 2,393
constituent domestic corporation;
(c) the irrevocable appointment of the secretary of state 2,395
of this state as its agent to accept service of process in any 2,396
such proceeding;
(d) if it is desired that the surviving or new corporation 2,398
exercise its corporate privileges in this state as a foreign 2,399
corporation in a continual course of transactions, a statement to 2,400
51
that effect and a statement with respect to the appointment of 2,401
the statutory agent and with respect to the consent to service of 2,402
any process, notice, or demand upon such statutory agent or the 2,403
secretary of state, as required when a foreign corporation
applies for a certificate authorizing it to do so; 2,404
(C) The agreement may also set forth any additional 2,406
provision permitted by the laws of any state under the laws of 2,407
which any constituent corporation exists, to the extent not 2,408
inconsistent with the laws of the state under the laws of which 2,409
the surviving or new corporation is to exist.
Sec. 1702.47. (A) A corporation may be dissolved 2,418
voluntarily in the manner provided in this section. 2,419
(B) A resolution of dissolution for a corporation shall 2,421
set forth: 2,422
(1) That the corporation elects to be dissolved; 2,424
(2) Any additional provision deemed necessary with respect 2,426
to the proposed dissolution and winding up. 2,427
(C) The trustees DIRECTORS may adopt a resolution of 2,429
dissolution in the following cases: 2,431
(1) When the corporation has been adjudged bankrupt or has 2,433
made a general assignment for the benefit of creditors; 2,434
(2) By leave of the court, when a receiver has been 2,436
appointed in a general creditors' suit or in any suit in which 2,437
the affairs of the corporation are to be wound up; 2,438
(3) When substantially all of the assets have been sold at 2,440
judicial sale or otherwise; 2,441
(4) When the period of existence of the corporation 2,443
specified in its articles has expired. 2,444
(D) The voting members at a meeting held for such purpose 2,446
may adopt a resolution of dissolution by the affirmative vote of 2,447
a majority of the voting members present IN PERSON OR, IF 2,448
PERMITTED, BY MAIL OR BY PROXY, if a quorum is present or, if the 2,450
articles or the regulations provide or permit, by the affirmative 2,451
vote of a greater or lesser proportion or number of the voting 2,452
52
members, and by such affirmative vote of the voting members of 2,453
any particular class as is required by the articles or the 2,454
regulations. Notice of the meeting of the members shall be given 2,455
to all the members whether or not entitled to vote thereat.
(E) Upon the adoption of a resolution of dissolution, a 2,457
certificate shall be prepared, on a form prescribed by the 2,458
secretary of state, setting forth the following: 2,459
(1) The name of the corporation; 2,461
(2) A statement that a resolution of dissolution has been 2,463
adopted; 2,464
(3) A statement of the manner of adoption of such 2,466
resolution, and, in the case of its adoption by the trustees 2,467
DIRECTORS, a statement of the basis for such adoption; 2,469
(4) The place in this state where its principal office is 2,471
or is to be located; 2,472
(5) The names and addresses of its trustees DIRECTORS and 2,474
officers; 2,475
(6) The name and address of its statutory agent. 2,477
(F) Such certificate shall be signed by any authorized 2,479
officer, unless the officer fails to execute and file such 2,480
certificate within thirty days after the adoption of the 2,482
resolution, or upon any date specified in the resolution as the 2,483
date upon which such certificate is to be filed, or upon the 2,484
expiration of any period specified in the resolution as the 2,485
period within which such certificate is to be filed, whichever is 2,486
latest, in which event the certificate of dissolution may be 2,487
signed by any three voting members and shall set forth a 2,488
statement that the persons signing the certificate are voting 2,489
members and are filing the certificate because of the failure of 2,490
the officers to do so.
(G) A certificate of dissolution, filed with the secretary 2,492
of state, shall be accompanied by: 2,493
(1) An affidavit of one or more of the persons executing 2,495
the certificate of dissolution or of an officer of the 2,496
53
corporation containing a statement of the counties, if any, in 2,497
this state in which the corporation has personal property subject 2,498
to personal property taxes or a statement that the corporation is 2,499
of a type required to pay personal property taxes to state 2,500
authorities only; 2,501
(2) A receipt, certificate, or other evidence showing the 2,503
payment of all personal property taxes accruing up to the date of 2,504
such filing, unless the affidavit provided for in division (G)(1) 2,505
of this section states that the corporation has in this state no 2,507
personal property subject to personal property taxes;
(3) A receipt, certificate, or other evidence from the 2,509
director of job and family services showing that all 2,511
contributions due from the corporation as an employer have been 2,512
paid, or that such payment has been adequately guaranteed, or 2,513
that the corporation is not subject to such contributions; 2,514
(4) A receipt, certificate, or other evidence showing the 2,516
payment of all sales, use, and highway use taxes accruing up to 2,517
the date of such filing, or that such payment has been adequately 2,518
guaranteed; 2,519
(5) In lieu of the receipt, certificate, or other evidence 2,521
described in division (G)(2), (3), or (4) of this section, an 2,522
affidavit of one or more of the persons executing the certificate 2,523
of dissolution or of an officer of the corporation containing a 2,524
statement of the date upon which the particular department, 2,525
agency, or authority was advised in writing of the scheduled date 2,526
of the filing of the certificate of dissolution and was advised 2,527
in writing of the acknowledgement by the corporation of the 2,528
applicability of section 1702.55 of the Revised Code. 2,529
(H) Upon the filing of a certificate of dissolution and 2,531
such accompanying documents, the corporation shall be dissolved. 2,532
Sec. 1702.48. Following the filing of the certificate of 2,541
dissolution, the trustees DIRECTORS shall forthwith cause a 2,542
notice of voluntary dissolution to be published once a week on 2,544
the same day of each week for two successive weeks, in a 2,545
54
newspaper published and of general circulation in the county in
which the principal office of the corporation was to be or is 2,546
located, and shall forthwith cause written notice of dissolution 2,547
to be given either personally or by mail to all known creditors 2,548
of, and to all known claimants against, the dissolved 2,549
corporation.
Sec. 1702.49. (A) When a corporation is dissolved 2,558
voluntarily or when the articles of a corporation have been 2,559
canceled or when the period of existence of a corporation 2,560
specified in its articles has expired, the corporation shall 2,561
cease to carry on its activities and shall do only such acts as 2,562
are required to wind up its affairs, or to obtain reinstatement 2,563
of the articles in accordance with section 1702.06, 1702.59, or 2,564
1724.06 of the Revised Code, or are permitted upon reinstatement 2,565
by division (C) of section 1702.60 of the Revised Code, and for 2,566
such purposes it shall continue as a corporation. 2,567
(B) Any claim existing or action or proceding PROCEEDING 2,569
pending by or against the corporation or which THAT would have 2,571
accrued against it may be prosecuted to judgment, with right of 2,573
appeal as in other cases, but any proceeding, execution, or 2,574
process, or the satisfaction or performance of any order, 2,575
judgment, or decree, may be stayed as provided in section 1702.50 2,576
of the Revised Code.
(C) Any process, notice, or demand against the corporation 2,578
may be served by delivering a copy to an officer, trustee 2,579
DIRECTOR, liquidator, or person having charge of its assets or, 2,581
if no such person can be found, to the statutory agent. 2,582
(D) The trustees DIRECTORS of the corporation and their 2,584
survivors or successors shall act as a board of trustees 2,586
DIRECTORS in accordance with the regulations and bylaws until the 2,588
affairs of the corporation are completely wound up. Subject to 2,589
the orders of courts of this state having jurisdiction over the 2,590
corporation, the trustees DIRECTORS shall proceed as speedily as 2,592
is practicable to a complete winding up of the affairs of the 2,593
55
corporation and, to the extent necessary or expedient to that 2,594
end, shall exercise all the authority of the corporation. 2,595
Without limiting the generality of such authority, they may fill 2,596
vacancies, elect officers, carry out contracts of the 2,597
corporation, make new contracts, borrow money, mortgage or pledge 2,598
the property of the corporation as security, sell its assets at 2,599
public or private sale, make conveyances in the corporate name, 2,600
lease real estate for any term, including ninety-nine years 2,601
renewable forever, settle or compromise claims in favor of or 2,602
against the corporation, employ one or more persons as 2,603
liquidators to wind up the affairs of the corporation with such 2,604
authority as the trustees DIRECTORS see fit to grant, cause the 2,605
title to any of the assets of the corporation to be conveyed to 2,606
such liquidators for that purpose, apply assets to the payment of 2,607
obligations, perform all other acts necessary or expedient to the 2,608
winding up of the affairs of the corporation, and, after paying 2,609
or adequately providing for the payment of all known obligations 2,610
of the corporation, distribute the remainder of the assets as 2,611
follows: 2,612
(1) Assets held upon condition requiring return, transfer, 2,614
or conveyance, which condition shall have occurred by reason of 2,615
the dissolution or otherwise, shall be returned, transferred, or 2,616
conveyed in accordance with such requirements; 2,617
(2) In the case of a charitable PUBLIC BENEFIT 2,619
corporation: (a) assets held by it in trust for specified 2,621
purposes shall be applied so far as is feasible in accordance 2,622
with the terms of the trust; (b) the remaining assets not held in 2,623
trust shall be applied so far as is feasible towards carrying out 2,624
the purposes stated in its articles; (c) in the event and to the 2,625
extent that, in the judgment of the trustees DIRECTORS, it is not 2,626
feasible to apply the assets as provided in above clauses (a) and 2,628
(b), the assets shall be applied as may be directed by the court 2,629
of common pleas of the county in this state in which the 2,630
principal office of the corporation is located, in an action 2,631
56
brought for that purpose by the corporation or by the trustees 2,632
DIRECTORS or any thereof, to which action the attorney general of 2,634
the state shall be a party, or in an action brought by the 2,635
attorney general in a court of competent jurisdiction, or in an 2,636
action brought as provided in section 1702.50 of the Revised Code 2,637
for the purpose of winding up the affairs of the corporation 2,638
under the supervision of the court;
(3) In the case of a MUTUAL BENEFIT corporation other than 2,640
a charitable corporation, any remaining assets shall be 2,642
distributed in accordance with the applicable provisions of the 2,643
articles or the regulations or, to the extent that no such 2,644
provision is made, the assets shall be distributed pursuant to a 2,645
plan of distribution adopted by the voting members at a meeting 2,646
held for the purpose of voting on dissolution, or any adjournment 2,647
thereof, by the same affirmative vote as that required for the 2,648
adoption of a resolution of dissolution. If no plan of 2,649
distribution is so adopted by the voting members, then said 2,650
remaining assets shall be distributed pursuant to a plan of 2,651
distribution adopted by the trustees DIRECTORS. IF NO PLAN OF 2,652
DISTRIBUTION IS SO ADOPTED BY THE VOTING MEMBERS OR DIRECTORS, 2,653
THEN THE REMAINING ASSETS SHALL BE APPLIED AS MAY BE DIRECTED BY 2,654
THE COURT OF COMMON PLEAS OF THE COUNTY IN THIS STATE IN WHICH
THE PRINCIPAL OFFICE OF THE CORPORATION IS LOCATED, IN AN ACTION 2,655
BROUGHT FOR THAT PURPOSE BY THE MUTUAL BENEFIT CORPORATION OR BY 2,656
THE DIRECTORS OR ANY THEREOF, OR BY THE ATTORNEY GENERAL IN A 2,657
COURT OF COMPETENT JURISDICTION, OR IN AN ACTION BROUGHT AS 2,658
PROVIDED IN SECTION 1702.50 OF THE REVISED CODE FOR THE PURPOSE
OF WINDING UP THE AFFAIRS OF THE CORPORATION UNDER THE 2,659
SUPERVISION OF THE COURT.
(E) Without limiting the authority of the trustees 2,661
DIRECTORS, any action within the purview of this section which 2,663
THAT is authorized or approved by the voting members at a meeting 2,665
held for such purpose, by the same affirmative vote as that 2,666
required for the adoption of a resolution of dissolution, shall 2,667
57
be conclusive for all purposes upon all members of the 2,668
corporation, except that nothing herein set forth shall impair 2,669
the jurisdiction of courts of competent jurisdiction to enforce 2,670
the duties of a charitable PUBLIC BENEFIT corporation in respect 2,672
of the application of its assets towards ITS PUBLIC OR charitable 2,673
purposes, or impair the power of the state, acting through the 2,675
attorney general, to require such assets to be applied, as nearly 2,676
as may be, towards ITS PUBLIC OR charitable purposes. 2,677
(F) All deeds and other instruments of the corporation 2,679
shall be in the name of the corporation and shall be executed, 2,680
acknowledged, and delivered by the officers appointed by the 2,681
trustees DIRECTORS. 2,682
(G) At any time during the winding up of its affairs, the 2,684
corporation by its trustees DIRECTORS may make application to the 2,686
court of common pleas of the county in this state in which the 2,687
principal office of the corporation is located to have the 2,688
winding up continued under supervision of the court, as provided 2,689
in section 1702.50 of the Revised Code. 2,690
Sec. 1702.50. (A) Without limiting the generality of its 2,699
authority, the court of common pleas of the county in this state 2,700
in which is located the principal office of a voluntarily 2,701
dissolved corporation or of a corporation whose articles have 2,702
been canceled or whose period of existence has expired, upon the 2,703
complaint of the corporation, a majority of the trustees 2,704
DIRECTORS, or a creditor or member, and upon such notice to all 2,706
the trustees DIRECTORS and such other persons interested as the 2,708
court considers proper, at any time may order and adjudge in 2,709
respect to the following matters: 2,710
(1) The presentation and proof of all claims and demands 2,712
against the corporation and of all rights, interests, or liens in 2,713
or on any of its property; the fixing of the time within which 2,714
and the manner in which such proof shall be made and the person 2,715
to whom such presentation shall be made; and the barring from 2,716
participation in any distribution of assets of all persons 2,717
58
failing to make and present proofs as required by the order of 2,718
the court; 2,719
(2) The stay of the prosecution of any proceeding against 2,721
the corporation or involving any of its property, and the 2,722
requirement that the parties to it present and prove their 2,723
claims, demands, rights, interests, or liens at the time and in 2,724
the manner required of creditors or others; or the grant of leave 2,725
to bring or maintain an independent proceeding to enforce liens; 2,726
(3) The settlement or determination of all claims of every 2,728
nature against the corporation or any of its property; the 2,729
determination of the assets required to be retained to pay or 2,730
provide for the payment of such claims or any claim; the 2,731
determination of the assets available for distribution among 2,732
members and others; and the making of new parties to the 2,733
proceeding so far as the court considers proper for the 2,734
determination of all matters; 2,735
(4) The determination of the rights of members or others 2,737
in and to the assets of the corporation; 2,738
(5) The presentation and the filing of intermediate and 2,740
final accounts of the trustees DIRECTORS or of the liquidators 2,741
and hearings on them; the allowance, disallowance, or settlement 2,743
of such accounts; and the discharge of the trustees DIRECTORS, 2,744
the liquidators, or any of them from their duties and 2,746
liabilities;
(6) The appointment of a special master commissioner to 2,748
hear and determine any such matters with such authority as the 2,749
court considers proper; 2,750
(7) The filling of any vacancies in the number of trustees 2,752
DIRECTORS or liquidators when the trustees DIRECTORS are unable 2,754
to act on the vacancies for want of a quorum or for any other 2,756
reason;
(8) The appointment of a receiver, in accordance with the 2,758
usages of a court in equitable matters, to wind up the affairs of 2,759
the corporation, to take custody of any of its property, or for 2,760
59
any other purpose; 2,761
(9) The issuance or entry of any injunction or any other 2,763
order which THAT the court considers proper in the administration 2,765
of the trust involved in the winding up of the affairs of the 2,766
corporation and the giving of notice of it; 2,767
(10) The allowance and payment of compensation to the 2,769
trustees DIRECTORS or any of them, to liquidators, to a receiver, 2,771
to the attorney for the complainant, or to any person properly 2,772
rendering services beneficial to the corporation or to those 2,773
interested in it; 2,774
(11) The entry of a judgment or decree which THAT, if it 2,776
so provides, may operate as the deed or other instrument ordered 2,777
to be executed, or the appointment of a master to execute such 2,778
deed or instrument in the name of the corporation with the same 2,779
effect as if executed by an authorized officer pursuant to 2,780
authority conferred by the trustees DIRECTORS or the voting 2,781
members of the corporation, whenever there is no officer or agent 2,782
competent to execute such deed or instrument, whenever the 2,783
corporation or its officers do not perform or comply with a 2,784
judgment or decree of court, or whenever the court considers it 2,785
proper.
(B) A judicial proceeding under this section concerning 2,787
the winding up of the affairs of a corporation is a special 2,788
proceeding, and final orders in the proceeding may be vacated, 2,789
modified, or reversed on appeal pursuant to the Rules of 2,790
Appellate Procedure and, to the extent not in conflict with those 2,791
rules, Chapter 2505. of the Revised Code. 2,792
Sec. 1702.51. (A) Whenever, after a corporation is 2,801
dissolved voluntarily or the articles of a corporation have been 2,802
canceled or the the period of existence of a corporation has 2,803
expired, a receiver is appointed to wind up the affairs of the 2,804
corporation, all the claims, demands, rights, interests, or liens 2,805
of creditors, claimants, and members shall be determined as of
the day on which the receiver was appointed. Unless it is 2,806
60
otherwise ordered, such appointment vests in the receiver and his 2,807
THE RECEIVER'S successors the right to the immediate possession 2,809
of all the property of the corporation, which shall, if so 2,810
ordered, execute and deliver conveyances of such property to the 2,811
receiver or his THE RECEIVER'S nominee. 2,812
(B) Any officer, trustee DIRECTOR, member, or other 2,814
person, whether a resident of the state or a non-resident and 2,816
however interested, may be appointed as receiver.
(C) The receiver shall have all the authority vested in 2,818
the trustees DIRECTORS and officers of the corporation, shall 2,820
exercise such authority subject to such orders as are made by the 2,821
court, and may be required to qualify by giving bond to the state 2,822
in such amount as the court fixes, with surety to the
satisfaction of the clerk of the court, conditioned for the 2,823
faithful discharge of his THE RECEIVER'S duties and for a due 2,824
accounting for all money or property received by him THE 2,825
RECEIVER.
Sec. 1702.52. (A) A corporation may be dissolved 2,834
judicially and its affairs wound up: 2,835
(1) By an order of the supreme court or of a court of 2,837
appeals in an action in quo warranto brought as provided by 2,838
sections 2733.02 to 2733.39 of the Revised Code, in which event 2,839
the court may order the affairs of the corporation to be wound up 2,840
by its trustees DIRECTORS as in the case of voluntary 2,841
dissolution, or by proceedings in, and under the order of, the 2,843
court of common pleas of the county in this state in which the 2,844
corporation has its principal office; 2,845
(2) By an order of the court of common pleas of the county 2,847
in this state in which such corporation has its principal office, 2,848
in an action brought by voting members entitled to dissolve the 2,849
corporation voluntarily, when it is established: 2,850
(a) That its articles have been canceled or its period of 2,852
existence has expired and that it is necessary in order to 2,853
protect the members that the corporation be judicially dissolved; 2,854
61
(b) That the corporation is insolvent or is unable to 2,856
afford reasonable security to those who may deal with it and that 2,857
it is necessary in order to protect the creditors of the 2,858
corporation that the corporation be judicially dissolved; 2,859
(c) That the objects of the corporation have wholly failed 2,861
or are entirely abandoned or that their accomplishment is 2,862
impracticable; 2,863
(3) By an order of the court of common pleas of the county 2,865
in this state in which the corporation has its principal office, 2,866
in an action brought by a majority of the voting members, or such 2,867
lesser proportion or number of voting members as are entitled by 2,868
the articles to dissolve the corporation voluntarily, when it is 2,869
established that it is beneficial to the members that the 2,870
corporation be judicially dissolved; 2,871
(4) By an order of the court of common pleas of the county 2,873
in this state in which the corporation has its principal office, 2,874
in an action brought by one-half of the trustees DIRECTORS when 2,875
there is an even number of trustees DIRECTORS or by one-half of 2,877
the voting members, when it is established that the corporation 2,879
has an even number of trustees DIRECTORS who are deadlocked in 2,880
the management of the corporate affairs and the voting members 2,882
are unable to break the deadlock, or when it is established that 2,883
the corporation has an uneven number of trustees DIRECTORS and 2,884
that the voting members are deadlocked in voting power and unable 2,886
to agree upon or vote for the election of trustees DIRECTORS as 2,887
successors to trustees DIRECTORS whose terms normally would 2,888
expire upon the election of their successors. 2,889
(B) A complaint for judicial dissolution shall be verified 2,891
by any of the complainants and shall set forth facts showing that 2,892
the case is one of those specified in this section. Unless the 2,893
complainants set forth in the complaint that they are unable to 2,894
annex a list of members, a schedule shall be annexed to the 2,895
complaint setting forth the name of each member and his THE 2,896
MEMBER'S address if it is known. 2,897
62
(C) Upon the filing of a complaint for judicial 2,899
dissolution, the court with which it is filed shall have power to 2,900
issue injunctions, to appoint a receiver with such authority and 2,901
duties as the court from time to time may direct, to take such 2,902
other proceedings as may be necessary to protect the property or 2,903
the rights of the complainants or of the persons interested, and 2,904
to carry on the activities of the corporation until a full 2,905
hearing can be had. Upon or after the filing of a complaint for 2,906
judicial dissolution, the court, by injunction or order, may stay 2,907
the prosecution of any proceeding against the corporation or 2,908
involving any of its property and require the parties to it to 2,909
present and prove their claims, demands, rights, interests, or 2,910
liens, at the time and in the manner required of creditors or 2,911
others. The court may refer the complaint to a special master 2,912
commissioner. 2,913
(D) After a hearing had upon such notice as the court may 2,915
direct to be given to all parties to the proceeding and to any 2,916
other parties in interest designated by the court, a final order 2,917
based either upon the evidence, or upon the report of the special 2,918
master commissioner if one has been appointed, shall be made 2,919
dissolving the corporation or dismissing the complaint. An order 2,920
or judgment for the judicial dissolution of a corporation shall 2,921
contain a concise statement of the proceedings leading up to the 2,922
order or judgment; the name of the corporation; the place in this 2,923
state where its principal office is located; the names and 2,924
addresses of its trustees DIRECTORS and officers; the name and 2,925
address of a statutory agent; and, if desired, such other 2,927
provisions with respect to the judicial dissolution and winding 2,928
up as are considered necessary or desirable. A certified copy of 2,929
such order forthwith shall be filed in the office of the 2,930
secretary of state, whereupon the corporation shall be dissolved. 2,931
To the extent consistent with orders entered in such proceeding, 2,932
the effect of such judicial dissolution shall be the same as in 2,933
the case of voluntary dissolution, and the provisions of sections 2,934
63
1702.49, 1702.50, and 1702.51 of the Revised Code relating to the 2,935
authority and duties of trustees DIRECTORS during the winding up 2,936
of the affairs of a corporation dissolved voluntarily, with 2,938
respect to the jurisdiction of courts over the winding up of the 2,939
affairs of a corporation, and with respect to receivers for 2,940
winding up the affairs of a corporation shall be applicable to 2,941
corporations judicially dissolved. 2,942
(E) A judicial proceeding under this section concerning 2,944
the judicial dissolution of a corporation is a special 2,945
proceeding, and final orders in the proceeding may be vacated, 2,946
modified, or reversed on appeal pursuant to the Rules of 2,947
Appellate Procedure or the Rules of Practice of the Supreme 2,948
Court, whichever are applicable, and, to the extent not in 2,949
conflict with those rules, Chapter 2505. of the Revised Code. 2,950
Sec. 1702.521. (A) Upon the complaint of not less than 2,959
one-fourth of the trustees DIRECTORS of the corporation, the 2,960
court of common pleas of the county in which the corporation 2,962
maintains its principal office may order the appointment of a 2,963
provisional trustee DIRECTOR for that corporation if the articles 2,964
or regulations of the corporation expressly provide for such an 2,966
appointment. No appointment shall be made until a hearing is 2,967
held by the court. Notice of the hearing shall be given to each 2,968
trustee DIRECTOR and the secretary of the corporation in any 2,970
manner that the court directs. The complainants shall establish 2,971
at the hearing that, because of irreconcilable differences among 2,972
the existing trustees DIRECTORS, the continued operation of the 2,973
corporation has been substantially impeded or made impossible. 2,975
(B) A provisional trustee DIRECTOR shall have the same 2,977
rights and duties as other trustees DIRECTORS and shall serve 2,979
until removed by the appointing court or by the members of the 2,981
corporation entitled to exercise a majority of the voting power 2,982
of the corporation in the election of trustees DIRECTORS or until 2,983
his THE PROVISIONAL DIRECTOR'S earlier resignation or death. If 2,986
the provisional trustee DIRECTOR dies or resigns, the court,
64
pursuant to division (A) of this section, may appoint a 2,988
replacement provisional trustee DIRECTOR, upon its own motion and 2,989
without the filing of a complaint for the appointment of a 2,991
provisional trustee DIRECTOR. If the appointing court finds that 2,993
the irreconcilable differences no longer exist, it shall order 2,994
the removal of the provisional trustee DIRECTOR. 2,995
(C) No person shall be appointed as a provisional trustee 2,997
DIRECTOR unless he THE PERSON is generally conversant with 2,999
corporate affairs, has no legal or equitable interest in the 3,001
obligations of the corporation of which he THE PERSON is to be 3,002
appointed a trustee DIRECTOR, and is not indebted to such 3,005
corporation. The compensation of a provisional trustee DIRECTOR 3,006
shall be determined by agreement with the corporation for which 3,007
he THE PROVISIONAL DIRECTOR is serving, subject to the approval 3,008
of the appointing court, except that the appointing court may fix 3,010
his THE PROVISIONAL DIRECTOR'S compensation in the absence of 3,012
agreement or in the event of disagreement between the provisional 3,013
trustee DIRECTOR and the corporation.
(D) A proceeding concerning the appointment of a 3,015
provisional trustee DIRECTOR of a corporation is a special 3,016
proceeding, and final orders issued in the proceeding may be 3,018
vacated, modified, or reversed on appeal pursuant to the Rules of 3,019
Appellate Procedure and, to the extent not in conflict with those 3,020
rules, Chapter 2505. of the Revised Code. 3,021
Sec. 1702.53. (A) A copy of the articles or amended 3,030
articles filed in the office of the secretary of state, certified 3,031
by the secretary of state, shall be conclusive evidence, except 3,032
as against the state, that the corporation has been incorporated 3,033
under the laws of this state; and a copy duly certified by the 3,034
secretary of state of any certificate of amendment or other
certificate filed in his THE SECRETARY OF STATE'S office shall be 3,035
prima-facie evidence of such amendment or of the facts stated in 3,038
any such certificate, and of the observance and performance of
all antecedent conditions necessary to the action which such 3,039
65
certificate purports to evidence. 3,040
(B) A copy of amended articles filed in the office of the 3,042
secretary of state, certified by the secretary of state, shall be 3,043
accepted in this state and other jurisdictions in lieu of the 3,044
original articles, amendments thereto, and prior amended 3,045
articles.
(C) The original or a copy of the record of minutes of the 3,047
proceedings of the incorporators of a corporation, or of the 3,048
proceedings or meetings of the members or any class of members, 3,049
or of the trustees DIRECTORS, or of any committee thereof, 3,051
including any written consent, waiver, release, or agreement
entered in such record or minutes, or the original or a copy of a 3,052
statement that no specified proceeding was had or that no 3,053
specified consent, waiver, release, or agreement exists, shall, 3,054
when certified to be true by the secretary or an assistant 3,055
secretary of a corporation, be received in the courts as
prima-facie evidence of the facts stated therein. Every meeting 3,056
referred to in such certified original or copy shall be deemed 3,057
duly called and held, and all motions and resolutions adopted and 3,058
proceedings had at such meeting shall be deemed duly adopted and 3,059
had, and all elections of trustees DIRECTORS and all elections or 3,061
appointments of officers chosen at such meeting shall be deemed
valid, until the contrary is proved; and whenever a person who is 3,062
not a member of a corporation has acted in good faith in reliance 3,063
upon any such certified original or copy, it is conclusive in his 3,064
THE PERSON'S favor.
Sec. 1702.54. (A) No officer, trustee DIRECTOR, employee, 3,073
or agent of a corporation shall, either alone or with another or 3,075
others, with intent to deceive:
(1) Make, issue, deliver, transmit by mail, or publish any 3,077
prospectus, report, circular, certificate, statement, balance 3,078
sheet, exhibit, or document, respecting membership rights in, or 3,079
the activities, assets, liabilities, earnings, or accounts of, a 3,080
corporation, which THAT is false in any material respect, knowing 3,082
66
the same to be false;
(2) Having charge of any books, minutes, records, or 3,084
accounts of a corporation, make therein any entry which THAT is 3,085
false in any material respect, knowing such entry to be false, or 3,087
remove, erase, alter, or cancel any entry therein, knowing that 3,088
the entries resulting therefrom will be false.
(B) Whoever violates this section shall be personally 3,090
liable, jointly and severally, with all other persons 3,091
participating with him THE PERSON in any such act, to any person 3,093
for any damage actually suffered and proximately resulting from
such act. 3,094
(C) No action to enforce a liability under this section 3,096
shall be brought after four years from the time of the act 3,097
complained of.
(D) Remedies under this section are not exclusive of other 3,099
remedies at common law or under other statutes. 3,100
Sec. 1702.55. (A) The members, the trustees DIRECTORS, 3,109
and the officers of a corporation shall not be personally liable 3,110
for any obligation of the corporation. 3,111
(B) Trustees DIRECTORS who vote for or assent to: 3,113
(1) A distribution of assets to members contrary to law or 3,115
the articles; 3,116
(2) A distribution of assets to persons other than 3,118
creditors during the winding up of the affairs of the 3,119
corporation, on dissolution or otherwise, without the payment of 3,120
all known obligations of the corporation, or without making 3,121
adequate provision therefor; 3,122
(3) The making of loans, other than in the usual conduct 3,124
of its affairs or in accordance with provisions therefor in the 3,125
articles, to an officer, trustee DIRECTOR, or member of the 3,126
corporation; shall be jointly and severally liable to the 3,128
corporation as follows: in cases under division (B)(1) of this 3,129
section up to the amount of such distribution in excess of the 3,130
amount that could have been distributed without violation of law 3,131
67
or the articles, but not in excess of the amount that would inure 3,132
to the benefit of the creditors of the corporation if it was 3,133
insolvent at the time of the distribution or there was reasonable 3,134
ground to believe that by such action it would be rendered 3,135
insolvent, or to the benefit of the members other than members of 3,136
the class in respect of which the distribution was made; and in 3,137
cases under division (B)(2) of this section, to the extent that 3,138
such obligations (not otherwise barred by statute) are not paid, 3,139
or for the payment of which adequate provision has not been made; 3,140
and in cases under division (B)(3) of this section, for the 3,141
amount of the loan with interest thereon at the rate of six per 3,142
cent per annum until such amount has been paid, provided, EXCEPT 3,143
that a trustee DIRECTOR shall not be liable under division (B)(1) 3,145
or (2) of this section if in determining the amount available for 3,147
any such distribution, he THE DIRECTOR in good faith relied on a 3,148
financial statement of the corporation prepared by an officer or 3,151
employee of the corporation in charge of its accounts or 3,152
certified by a public accountant or firm of public accountants, 3,153
or in good faith he THE DIRECTOR considered the assets to be of 3,155
their book value, or he THE DIRECTOR followed what he THE 3,157
DIRECTOR believed to be sound accounting and business practice. 3,159
(C) A trustee DIRECTOR who is present at a meeting of the 3,161
trustees DIRECTORS or a committee thereof at which action on any 3,163
matter is authorized or taken and who has not voted for or 3,164
against such action shall be presumed to have voted for the 3,165
action unless his THE DIRECTOR'S written dissent therefrom is 3,167
filed either during the meeting or within a reasonable time after 3,168
the adjournment thereof, with the person acting as secretary of 3,169
the meeting or with the secretary of the corporation. 3,170
(D) A member who knowingly receives any distribution made 3,172
contrary to law or the articles shall be liable to the 3,173
corporation for the amount received by him which THE MEMBER THAT 3,174
is in excess of the amount which THAT could have been distributed 3,177
without violation of law or the articles. 3,179
68
(E) A trustee DIRECTOR against whom a claim is asserted 3,181
under or pursuant to this section and who is held liable thereon 3,183
shall be entitled to contribution, on equitable principles, from 3,184
other trustees DIRECTORS who also are liable; and in addition, 3,185
any trustee DIRECTOR against whom a claim is asserted under or 3,187
pursuant to this section or who is held liable shall have a right 3,188
of contribution from the members who knowingly received any 3,189
distribution made contrary to law or the articles, and such 3,190
members as among themselves shall also be entitled to 3,191
contribution in proportion to the amounts received by them 3,192
respectively.
(F) No action shall be brought by or on behalf of a 3,194
corporation upon any cause of action arising under division 3,195
(B)(1) or (2) of this section at any time after two years from 3,196
the day on which the violation occurs; provided that no such 3,197
action shall be barred by this division (F) prior to January 1, 3,198
1956. 3,199
(G) Nothing contained in this section shall preclude any 3,201
creditor whose claim is unpaid from exercising such rights as he 3,202
THE CREDITOR otherwise would have by law to enforce his THE 3,204
CREDITOR'S claim against assets of the corporation distributed to 3,206
members or other persons.
Sec. 1702.58. (A) Except as provided in sections 1702.01 3,215
to 1702.58, inclusive, of the Revised Code, the provisions of 3,216
said THOSE sections shall apply only to domestic corporations, 3,219
and except as otherwise provided in this section, the provisions 3,220
of said THOSE sections shall apply to all domestic corporations, 3,222
whether formed under said THOSE sections or under previous laws 3,223
of this state. 3,224
(B) Special provisions in the Revised Code for the 3,226
organization, conduct, or government of designated classes of 3,227
corporations shall govern to the exclusion of the provisions of 3,228
sections 1702.01 to 1702.58, inclusive, of the Revised Code, on 3,230
the same subject, except where it clearly appears that a special 3,231
69
provision is cumulative, in which case it THAT PROVISION and the 3,232
provisions of said THOSE sections on the same subject shall 3,234
apply.
(C) A corporation incorporated prior to June 9, 1927, with 3,236
authority to issue shares may continue to issue and re-issue 3,237
shares in accordance with its articles, but shall be without 3,238
authority to amend its articles in order to increase the 3,239
authorized number of shares.
(D) A corporation created before September 1, 1851, which 3,241
THAT (1) has expressly elected to be governed by the laws passed 3,243
since that date, (2) subsequent to that date has taken such 3,244
action under laws then in effect as to make it subject, as a 3,245
matter of law, to the Constitution of 1851 and laws passed
thereunder, or (3) subsequent to October 1, 1955, takes any 3,246
action under sections 1702.01 to 1702.58, inclusive, of the 3,247
Revised Code, or any of them, which THAT but for said THOSE 3,249
sections it would not be authorized to take, shall be deemed to 3,251
be a corporation exercising its corporate privileges under the
Constitution of this state and the laws passed in pursuance 3,252
thereof, and not otherwise. 3,253
(E) A corporation created before September 1, 1851, and 3,255
actually carrying on its activities in this state, and which 3,256
prior to October 11, 1955, has not taken action described in 3,258
division (D) of this section, may accept the provisions of 3,259
sections 1702.01 to 1702.58, inclusive, of the Revised Code, at a 3,261
meeting of voting members held for such purpose, by a resolution
to that effect adopted by the affirmative vote of a majority of 3,262
the voting members present IN PERSON OR, IF PERMITTED, BY MAIL OR 3,263
BY PROXY, if a quorum is present, and by filing in the office of 3,264
the secretary of state a copy of said THE resolution certified by 3,266
the president or a vice-president and the secretary or an 3,268
assistant secretary ANY AUTHORIZED OFFICER of the corporation, 3,269
for which filing the secretary of state shall charge and collect 3,270
a fee of five dollars. Thereafter said THE corporation shall be 3,271
70
deemed to exercise its corporat CORPORATE privileges under the 3,273
Constitution of this state and the laws passed in pursuance 3,276
thereof, and not otherwise.
(F) Except as provided in divisions (D) and (E) of this 3,278
section, a corporation created before September 1, 1851, shall be 3,279
governed by the laws in force on that date as modified since that 3,280
date.
(G) A domestic corporation for profit, upon compliance 3,282
with the provision of the Revised Code as in effect from time to 3,283
time relating to such corporation's becoming a nonprofit 3,284
corporation upon amendment to its articles or upon adoption of 3,285
amended articles, as provided by law, shall, upon filing the
prescribed certificate in the office of the secretary of state, 3,286
become a corporation subject to the provisions of, and entitled 3,287
to all the rights, privileges, immunities, powers, franchises, 3,288
and authority granted by, sections 1702.01 to 1702.58, inclusive, 3,290
of the Revised Code THIS CHAPTER.
Sec. 1702.59. (A) Every nonprofit corporation, 3,299
incorporated under the general corporation laws of this state, or 3,300
previous laws, or under special provisions of the Revised Code, 3,301
or created before September 1, 1851, which corporation has 3,302
expressedly or impliedly elected to be governed by the laws 3,303
passed since that date, and whose articles or other documents are 3,304
filed with the secretary of state, shall file with the secretary 3,305
of state a verified statement of continued existence, signed by a 3,306
trustee DIRECTOR, officer, or three members in good standing, 3,308
setting forth the corporate name, the place where the principal 3,309
office of the corporation is located, the date of incorporation, 3,310
the fact that the corporation is still actively engaged in 3,311
exercising its corporate privileges, and the name and address of 3,312
its agent appointed pursuant to section 1702.06 of the Revised 3,313
Code.
(B) Each corporation required to file a statement of 3,316
continued existence shall file it with the secretary of state 3,317
71
within each five years after the date of incorporation or of the 3,318
last corporate filing. For filing such statements of continued 3,319
existence, the secretary of state shall charge and collect a fee
of five dollars. 3,320
(C) Corporations specifically exempted by division (N) of 3,322
section 1702.06 of the Revised Code, or whose activities are 3,323
regulated or supervised by another state official, agency, 3,324
bureau, department, or commission are exempted from this section. 3,325
(D) The secretary of state shall give notice in writing 3,327
and provide a form for compliance with this section to each 3,328
corporation required by this section to file the statement of 3,329
continued existence, such notice and form to be mailed to the 3,330
last known address of the corporation as it appears on the 3,331
records of the secretary of state or which the secretary of state 3,333
may ascertain upon a reasonable search. 3,334
(E) In the event any nonprofit corporation required by 3,336
this section to file a statement of continued existence fails to 3,337
file the statement required every fifth year, then the secretary 3,338
of state shall cancel the articles of such corporation, make a 3,339
notation of the cancellation on the records, and mail to the 3,340
corporation a certificate of the action so taken. 3,341
(F) A corporation whose articles have been canceled may be 3,343
reinstated by filing an application for reinstatement and paying 3,344
to the secretary of state a fee of ten dollars. The name of a 3,345
corporation whose articles have been canceled shall be reserved 3,346
for a period of one year after the date of cancellation. If the 3,347
reinstatement is not made within one year from the date of the 3,348
cancellation of its articles of incorporation and it appears that 3,349
a corporate name, limited liability company name, limited 3,351
liability partnership name, limited partnership name, or trade
name has been filed, the name of which is not distinguishable 3,352
upon the record as provided in section 1702.06 of the Revised 3,353
Code, the applicant for reinstatement shall be required by the 3,355
secretary of state, as a condition prerequisite to such 3,356
72
reinstatement, to amend its articles by changing its name. A 3,357
certificate of reinstatement may be filed in the recorder's 3,358
office of any county in the state, for which the recorder shall 3,359
charge and collect a fee of one dollar. The rights, privileges, 3,360
and franchises of a corporation whose articles have been
reinstated are subject to section 1702.60 of the Revised Code. 3,361
(G) The secretary of state shall furnish the tax 3,363
commissioner a list of all corporations failing to file the 3,364
required statement of continued existence. 3,365
Section 2. That existing sections 1702.01, 1702.02, 3,367
1702.03, 1702.04, 1702.06, 1702.07, 1702.08, 1702.10, 1702.11, 3,368
1702.12, 1702.13, 1702.14, 1702.15, 1702.16, 1702.17, 1702.18, 3,369
1702.19, 1702.21, 1702.22, 1702.23, 1702.25, 1702.26, 1702.27, 3,370
1702.28, 1702.29, 1702.30, 1702.301, 1702.31, 1702.32, 1702.33, 3,371
1702.34, 1702.36, 1702.38, 1702.39, 1702.41, 1702.42, 1702.44, 3,372
1702.45, 1702.47, 1702.48, 1702.49, 1702.50, 1702.51, 1702.52, 3,373
1702.521, 1702.53, 1702.54, 1702.55, 1702.58, and 1702.59 of the 3,374
Revised Code are hereby repealed. 3,375