As Passed by the House 1
123rd General Assembly 4
Regular Session Am. Sub. H. B. No. 597 5
1999-2000 6
REPRESENTATIVES WOMER BENJAMIN-CALLENDER-SALERNO-MEAD-CATES 7
_________________________________________________________________ 9
A B I L L
To amend sections 1701.01, 1702.01, 1702.02, 11
1702.03, 1702.04, 1702.05, 1702.06, 1702.07, 12
1702.08, 1702.10, 1702.11, 1702.12, 1702.13,
1702.14, 1702.15, 1702.16, 1702.17, 1702.18, 13
1702.19, 1702.21, 1702.22, 1702.23, 1702.25, 14
1702.26, 1702.27, 1702.28, 1702.29, 1702.30,
1702.301, 1702.31, 1702.32, 1702.33, 1702.34, 15
1702.36, 1702.38, 1702.39, 1702.41, 1702.42, 16
1702.44, 1702.45, 1702.47, 1702.48, 1702.49, 17
1702.50, 1702.51, 1702.52, 1702.521, 1702.53,
1702.54, 1702.55, 1702.58, and 1702.59 of the 18
Revised Code to modify the Nonprofit Corporation 19
Law, including creating two new types of
nonprofit corporate entities; changing references 20
from trustees to directors; modifying membership 21
rights, notice and voting provisions, and merger 22
and consolidation provisions; and making related
changes. 23
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 25
Section 1. That sections 1701.01, 1702.01, 1702.02, 27
1702.03, 1702.04, 1702.05, 1702.06, 1702.07, 1702.08, 1702.10, 28
1702.11, 1702.12, 1702.13, 1702.14, 1702.15, 1702.16, 1702.17, 29
1702.18, 1702.19, 1702.21, 1702.22, 1702.23, 1702.25, 1702.26, 30
1702.27, 1702.28, 1702.29, 1702.30, 1702.301, 1702.31, 1702.32, 31
1702.33, 1702.34, 1702.36, 1702.38, 1702.39, 1702.41, 1702.42, 32
1702.44, 1702.45, 1702.47, 1702.48, 1702.49, 1702.50, 1702.51, 33
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1702.52, 1702.521, 1702.53, 1702.54, 1702.55, 1702.58, and 34
1702.59 of the Revised Code be amended to read as follows: 36
Sec. 1701.01. As used in sections 1701.01 to 1701.98 of 45
the Revised Code, unless the context otherwise requires: 46
(A) "Corporation" or "domestic corporation" means a 48
corporation for profit formed under the laws of this state. 49
(B) "Foreign corporation" means a corporation for profit 51
formed under the laws of another state, and "foreign entity" 52
means an entity formed under the laws of another state. 53
(C) "State" means the United States; any state, territory, 55
insular possession, or other political subdivision of the United 56
States, including the District of Columbia; any foreign country 57
or nation; and any province, territory, or other political 58
subdivision of such foreign country or nation. 59
(D) "Articles" includes original articles of 61
incorporation, certificates of reorganization, amended articles, 63
and amendments to any of these, and, in the case of a corporation 64
created before September 1, 1851, the special charter and any 65
amendments to it made by special act of the general assembly or 66
pursuant to general law. 67
(E) "Incorporator" means a person who signed the original 69
articles of incorporation. 70
(F) "Shareholder" means a person whose name appears on the 72
books of the corporation as the owner of shares of such 73
corporation. Unless the articles, the regulations, or the 74
contract of subscription otherwise provides, "shareholder" 75
includes a subscriber to shares, whether the subscription is 76
received by the incorporators or pursuant to authorization by the 77
directors, and such shares shall be deemed to be outstanding 78
shares. 79
(G) "Person" includes, without limitation, a natural 81
person, a corporation, whether nonprofit or for profit, a 82
partnership, a limited liability company, an unincorporated 83
society or association, and two or more persons having a joint or 84
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common interest. 85
(H) The location of the "principal office" of a 87
corporation is the place named as the principal office in its 88
articles.
(I) The "express terms" of shares of a class are the 90
statements expressed in the articles with respect to such shares. 91
(J) Shares of a class are "junior" to shares of another 93
class when any of their dividend or distribution rights are 94
subordinate to, or dependent or contingent upon, any right of, or 95
dividend on, or distribution to, shares of such other class. 96
(K) "Treasury shares" means shares belonging to the 98
corporation and not retired that have been either issued and 99
thereafter acquired by the corporation or paid as a dividend or 100
distribution in shares of the corporation on treasury shares of 101
the same class; such shares shall be deemed to be issued, but 102
they shall not be considered as an asset or a liability of the 103
corporation, or as outstanding for dividend or distribution, 104
quorum, voting, or other purposes, except, when authorized by the 105
directors, for dividends or distributions in authorized but 106
unissued shares of the corporation of the same class. 107
(L) To "retire" a share means to restore it to the status 109
of an authorized but unissued share. 110
(M) "Redemption price of shares" means the amount required 112
by the articles to be paid on redemption of shares. 113
(N) "Liquidation price" means the amount or portion of 115
assets required by the articles to be distributed to the holders 116
of shares of any class upon dissolution, liquidation, merger, or 117
consolidation of the corporation, or upon sale of all or 118
substantially all of its assets. 119
(O) "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
(P) "Parent corporation" or "parent" means a domestic or 125
foreign corporation that owns and holds of record shares of 127
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another corporation, domestic or foreign, entitling the holder of 128
the shares at the time to exercise a majority of the voting power 129
in the election of the directors of the other corporation without 130
regard to voting power that may thereafter exist upon a default, 132
failure, or other contingency; "subsidiary corporation" or 133
"subsidiary" means a domestic or foreign corporation of which 134
another corporation, domestic or foreign, is the parent. 135
(Q) "Combination" means a transaction, other than a merger 137
or consolidation, wherein either of the following applies: 138
(1) Voting shares of a domestic corporation are issued or 140
transferred in consideration in whole or in part for the transfer 141
to itself or to one or more of its subsidiaries, domestic or 142
foreign, of all or substantially all the assets of one or more 143
corporations, domestic or foreign, with or without good will or 144
the assumption of liabilities; 145
(2) Voting shares of a foreign parent corporation are 147
issued or transferred in consideration in whole or in part for 148
the transfer of such assets to one or more of its domestic 149
subsidiaries. 150
"Transferee corporation" in a combination means the 152
corporation, domestic or foreign, to which the assets are 153
transferred, and "transferor corporation" in a combination means 154
the corporation, domestic or foreign, transferring such assets 155
and to which, or to the shareholders of which, the voting shares 156
of the domestic or foreign corporation are issued or transferred. 157
(R) "Majority share acquisition" means the acquisition of 159
shares of a corporation, domestic or foreign, entitling the 160
holder of the shares to exercise a majority of the voting power 161
in the election of directors of such corporation without regard 162
to voting power that may thereafter exist upon a default, 163
failure, or other contingency, by either of the following: 164
(1) A domestic corporation in consideration in whole or in 166
part, for the issuance or transfer of its voting shares; 167
(2) A domestic or foreign subsidiary in consideration in 169
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whole or in part for the issuance or transfer of voting shares of 170
its domestic parent. 171
(S) "Acquiring corporation" in a combination means the 173
domestic corporation whose voting shares are issued or 174
transferred by it or its subsidiary or subsidiaries to the 175
transferor corporation or corporations or the shareholders of the 176
transferor corporation or corporations; and "acquiring 177
corporation" in a majority share acquisition means the domestic 178
corporation whose voting shares are issued or transferred by it 179
or its subsidiary in consideration for shares of a domestic or 180
foreign corporation entitling the holder of the shares to 181
exercise a majority of the voting power in the election of 182
directors of such corporation. 183
(T) When used in connection with a combination or a 185
majority share acquisition, "voting shares" means shares of a 186
corporation, domestic or foreign, entitling the holder of the 187
shares to vote at the time in the election of directors of such 188
corporation without regard to voting power which may thereafter 189
exist upon a default, failure, or other contingency. 190
(U) "An emergency" exists when the governor, or any other 192
person lawfully exercising the power and discharging the duties 193
of the office of governor, proclaims that an attack on the United 194
States or any nuclear, atomic, or other disaster has caused an 195
emergency for corporations, and such an emergency shall continue 196
until terminated by proclamation of the governor or any other 197
person lawfully exercising the powers and discharging the duties 198
of the office of governor. 199
(V) "Constituent corporation" means an existing 201
corporation merging into or into which is being merged one or 202
more other entities in a merger or an existing corporation being 204
consolidated with one or more other entities into a new entity in 205
a consolidation, whether any of the entities is domestic or 206
foreign, and "constituent entity" means any entity merging into
or into which is being merged one or more other entities in a 207
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merger, or an existing entity being consolidated with one or more 208
other entities into a new entity in a consolidation, whether any 209
of the entities is domestic or foreign. 210
(W) "Surviving corporation" means the constituent domestic 213
or foreign corporation that is specified as the corporation into 214
which one or more other constituent entities are to be or have 215
been merged, and "surviving entity" means the constituent
domestic or foreign entity that is specified as the entity into 216
which one or more other constituent entities are to be or have 217
been merged.
(X) "Close corporation agreement" means an agreement that 219
satisfies the three requirements of division (A) of section 220
1701.591 of the Revised Code. 221
(Y) "Issuing public corporation" means a domestic 223
corporation with fifty or more shareholders that has its 224
principal place of business, its principal executive offices, 225
assets having substantial value, or a substantial percentage of 226
its assets within this state, and as to which no valid close 227
corporation agreement exists under division (H) of section 228
1701.591 of the Revised Code. 229
(Z)(1) "Control share acquisition" means the acquisition, 231
directly or indirectly, by any person of shares of an issuing 232
public corporation that, when added to all other shares of the 233
issuing public corporation in respect of which such person may 234
exercise or direct the exercise of voting power as provided in 235
this division, would entitle such person, immediately after such 236
acquisition, directly or indirectly, alone or with others, to 237
exercise or direct the exercise of the voting power of the 238
issuing public corporation in the election of directors within 239
any of the following ranges of such voting power: 240
(a) One-fifth or more but less than one-third of such 242
voting power; 243
(b) One-third or more but less than a majority of such 245
voting power; 246
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(c) A majority or more of such voting power. 248
A bank, broker, nominee, trustee, or other person who 250
acquires shares in the ordinary course of business for the 251
benefit of others in good faith and not for the purpose of 252
circumventing section 1701.831 of the Revised Code shall, 253
however, be deemed to have voting power only of shares in respect 254
of which such person would be able, without further instructions 255
from others, to exercise or direct the exercise of votes on a 256
proposed control share acquisition at a meeting of shareholders 257
called under section 1701.831 of the Revised Code. 258
(2) The acquisition by any person of any shares of an 260
issuing public corporation does not constitute a control share 261
acquisition for the purpose of section 1701.831 of the Revised 262
Code if the acquisition was or is consummated in, results from, 263
or is the consequence of any of the following circumstances: 264
(a) Prior to November 19, 1982; 266
(b) Pursuant to a contract existing prior to November 19, 268
1982; 269
(c) By bequest or inheritance, by operation of law upon 271
the death of an individual, or by any other transfer without 272
valuable consideration, including a gift, that is made in good 273
faith and not for the purpose of circumventing section 1701.831 274
of the Revised Code; 275
(d) Pursuant to the satisfaction of a pledge or other 277
security interest created in good faith and not for the purpose 278
of circumventing section 1701.831 of the Revised Code; 279
(e) Pursuant to a merger or consolidation adopted, or a 281
combination or majority share acquisition authorized, by 282
shareholder vote in compliance with section 1701.78, 1701.781, or 284
1701.83 of the Revised Code provided the issuing public 285
corporation is the surviving or new corporation in the merger or 286
consolidation or is the acquiring corporation in the combination 287
or majority share acquisition;
(f) The person's being entitled, immediately thereafter, 289
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to exercise or direct the exercise of voting power of the issuing 290
public corporation in the election of directors within the same 291
range theretofore attained by that person either in compliance 292
with the provisions of section 1701.831 of the Revised Code or as 293
a result solely of the issuing public corporation's purchase of 294
shares issued by it. 295
The acquisition by any person of shares of an issuing 297
public corporation in a manner described under division (Z)(2) of 298
this section shall be deemed a control share acquisition 299
authorized pursuant to section 1701.831 of the Revised Code 300
within the range of voting power under division (Z)(1)(a), (b), 301
or (c) of this section that such person is entitled to exercise 302
after such acquisition, provided, in the case of an acquisition 303
in a manner described under division (Z)(2)(c) or (d) of this 304
section, the transferor of shares to such person had previously 305
obtained any authorization of shareholders required under section 306
1701.831 of the Revised Code in connection with such transferor's 307
acquisition of shares of the issuing public corporation. 308
(3) The acquisition of shares of an issuing public 310
corporation in good faith and not for the purpose of 311
circumventing section 1701.831 of the Revised Code from any 312
person whose control share acquisition previously had been 313
authorized by shareholders in compliance with section 1701.831 of 314
the Revised Code, or from any person whose previous acquisition 315
of shares of an issuing public corporation would have constituted 316
a control share acquisition but for division (Z)(2) or (3) of 317
this section, does not constitute a control share acquisition for 318
the purpose of section 1701.831 of the Revised Code unless such 319
acquisition entitles the person making the acquisition, directly 320
or indirectly, alone or with others, to exercise or direct the 321
exercise of voting power of the corporation in the election of 322
directors in excess of the range of such voting power authorized 323
pursuant to section 1701.831 of the Revised Code, or deemed to be 324
so authorized under division (Z)(2) of this section. 325
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(AA) "Acquiring person" means any person who has delivered 327
an acquiring person statement to an issuing public corporation 328
pursuant to section 1701.831 of the Revised Code. 329
(BB) "Acquiring person statement" means a written 331
statement that complies with division (B) of section 1701.831 of 332
the Revised Code. 333
(CC)(1) "Interested shares" means the shares of an issuing 335
public corporation in respect of which any of the following 336
persons may exercise or direct the exercise of the voting power 337
of the corporation in the election of directors: 338
(a) An acquiring person; 340
(b) Any officer of the issuing public corporation elected 342
or appointed by the directors of the issuing public corporation; 343
(c) Any employee of the issuing public corporation who is 345
also a director of such corporation; 346
(d) Any person that acquires such shares for valuable 348
consideration during the period beginning with the date of the 350
first public disclosure of a proposed control share acquisition 351
of the issuing public corporation or any proposed merger, 352
consolidation, or other transaction that would result in a change 354
in control of the corporation or all or substantially all of its 355
assets, and ending on the record date established by the 356
directors pursuant to section 1701.45 and division (D) of section 357
1701.831 of the Revised Code, if either of the following applies: 358
(i) The aggregate consideration paid or given by the 360
person who acquired the shares, and any other persons acting in 361
concert with the person, for all such shares exceeds two hundred 363
fifty thousand dollars;
(ii) The number of shares acquired by the person who 365
acquired the shares, and any other persons acting in concert with 366
the person, exceeds one-half of one per cent of the outstanding 368
shares of the corporation entitled to vote in the election of 369
directors.
(e) Any person that transfers such shares for valuable 371
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consideration after the record date described in division 372
(CC)(1)(d) of this section as to shares so transferred, if 374
accompanied by the voting power in the form of a blank proxy, an 375
agreement to vote as instructed by the transferee, or otherwise.
(2) If any part of this division is held to be illegal or 377
invalid in application, the illegality or invalidity does not 378
affect any legal and valid application thereof or any other 379
provision or application of this division or section 1701.831 of 380
the Revised Code that can be given effect without the invalid or 382
illegal provision, and the parts and applications of this 383
division are severable. 384
(DD) "Certificated security" and "uncertificated security" 386
have the same meanings as in section 1308.01 of the Revised Code. 387
(EE) "Entity" means any of the following: 389
(1) A for profit corporation existing under the laws of 391
this state or any other state; 392
(2) Any of the following organizations existing under the 394
laws of this state, the United States, or any other state: 395
(a) A business trust or association; 397
(b) A real estate investment trust; 399
(c) A common law trust; 401
(d) An unincorporated business or for profit organization, 403
including a general or limited partnership; 404
(e) A limited liability company; 406
(f) A NONPROFIT CORPORATION. 408
Sec. 1702.01. As used in this chapter, unless the context 418
otherwise requires: 419
(A) "Corporation" or "domestic corporation" means a 421
nonprofit corporation formed under the laws of this state, or a 422
BUSINESS corporation for profit formed under the laws of this 423
state that, by amendment to its articles as provided by law, 425
becomes a nonprofit corporation. 426
(B) "Foreign corporation" means a nonprofit corporation 428
formed under the laws of another state. 429
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(C) "Nonprofit corporation" means a DOMESTIC OR FOREIGN 431
corporation that is not formed OTHERWISE THAN for the pecuniary 433
gain or profit of, and whose net earnings or any part of them is 435
not distributable to, its members, trustees DIRECTORS, officers, 436
or other private persons, except that the payment of reasonable 438
compensation for services rendered and the distribution of assets 439
on dissolution as permitted by section 1702.49 of the Revised 440
Code is not pecuniary gain or profit or distribution of net 441
earnings. In a corporation all of whose members are nonprofit 442
corporations, distribution to members does not deprive it of the 443
status of a nonprofit corporation.
(D) "Charitable corporation" means a corporation organized 445
and operated exclusively for religious, charitable, scientific, 446
testing for public safety, literary, or educational purposes, 447
exclusively for the prevention of cruelty to children or animals, 448
or exclusively for a home for the aged, as defined in section 449
5701.13 of the Revised Code. 450
(E) "State" means the United States; any state, territory, 452
insular possession, or other political subdivision of the United 453
States, including the District of Columbia; any foreign country 454
or nation; and any province, territory, or other political 455
subdivision of a foreign country or nation. 456
(F)(E) "Articles" includes original articles of 458
incorporation, agreements of merger or consolidation IF AND ONLY 459
TO THE EXTENT THAT ARTICLES OF INCORPORATION ARE ADOPTED OR 460
AMENDED IN THE AGREEMENTS, amended articles, and amendments to 462
any of these, and, in the case of a corporation created before 463
September 1, 1851, the special charter and any amendments to it 464
made by special act of the General Assembly or pursuant to 465
general law.
(G)(F) "Incorporator" means a person who signed the 467
original articles of incorporation. 468
(H)(G) "Member" means one having membership rights and 470
privileges in a corporation in accordance with its articles or 471
12
regulations. 472
(I)(H) "Voting member" means a member possessing voting 474
rights, either generally or in respect of the particular question 475
involved, as the case may be. 476
(J)(I) "Person" includes, but is not limited to, a 478
nonprofit corporation, a BUSINESS corporation for profit), a 479
partnership, an unincorporated society or association, and two or 480
more persons having a joint or common interest. 481
(J)(K) The location of the "principal office" of a 483
corporation is the place named as such in its articles. 484
(L)(K) "Trustees DIRECTORS" means the persons vested with 487
the authority to conduct the affairs of the corporation 488
irrespective of the name, SUCH AS TRUSTEES, by which they are 489
designated.
(M)(L) "Insolvent" means that the corporation is unable to 491
pay its obligations as they become due in the usual course of its 492
affairs. 493
(N)(M)(1) Subject to division (N)(M)(2) of this section, 496
"volunteer" means a trustee DIRECTOR, officer, or agent of a 497
nonprofit corporation, or another person associated with a 498
nonprofit corporation, who satisfies both of the following: 499
(a) Performs services for or on behalf of, and under the 501
authority or auspices of, that corporation; 502
(b) Does not receive compensation, either directly or 504
indirectly, for performing those services. 505
(2) For purposes of division (N)(M)(1) of this section, 507
"compensation" does not include any of the following: 508
(a) Actual and necessary expenses that are incurred by a 510
volunteer in connection with the services performed for a 511
nonprofit corporation, and that are reimbursed to the volunteer 512
or otherwise paid; 513
(b) Insurance premiums paid on behalf of a volunteer, and 515
amounts paid or reimbursed, pursuant to division (E) of section 516
1702.12 of the Revised Code; 517
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(c) Modest perquisites. 519
(N) "BUSINESS CORPORATION" MEANS ANY ENTITY, AS DEFINED IN 521
SECTION 1701.01 OF THE REVISED CODE, OTHER THAN A PUBLIC BENEFIT 522
CORPORATION OR A MUTUAL BENEFIT CORPORATION, THAT IS ORGANIZED 523
PURSUANT TO CHAPTER 1701. OF THE REVISED CODE. 524
(O) "MUTUAL BENEFIT CORPORATION" MEANS ANY CORPORATION 526
ORGANIZED UNDER THIS CHAPTER OTHER THAN A PUBLIC BENEFIT 528
CORPORATION.
(P) "PUBLIC BENEFIT CORPORATION" MEANS A CORPORATION THAT 530
IS RECOGNIZED AS EXEMPT FROM FEDERAL INCOME TAXATION UNDER 532
SECTION 501(c)(3) OF THE "INTERNAL REVENUE CODE OF 1986," 100 534
STAT. 2085, 26 U.S.C. 1, AS AMENDED, OR IS ORGANIZED FOR A PUBLIC 536
OR CHARITABLE PURPOSE AND THAT UPON DISSOLUTION MUST DISTRIBUTE 537
ITS ASSETS TO A PUBLIC BENEFIT CORPORATION, THE UNITED STATES, A 538
STATE OR ANY POLITICAL SUBDIVISION OF A STATE, OR A PERSON THAT 539
IS RECOGNIZED AS EXEMPT FROM FEDERAL INCOME TAXATION UNDER 540
SECTION 501(c)(3) OF THE "INTERNAL REVENUE CODE OF 1986," AS 544
AMENDED. "PUBLIC BENEFIT CORPORATION" DOES NOT INCLUDE A 545
NONPROFIT CORPORATION THAT IS ORGANIZED BY ONE OR MORE MUNICIPAL
CORPORATIONS TO FURTHER A PUBLIC PURPOSE THAT IS NOT A CHARITABLE 546
PURPOSE.
Sec. 1702.02. (A) UNLESS ANOTHER FORM OF NOTICE IS 556
REQUIRED BY THE ARTICLES, THE REGULATIONS, THE BYLAWS, OR BY 559
APPLICABLE LAW, ANY NOTICE REQUIRED BY THIS CHAPTER SHALL BE IN 561
WRITING AND SHALL BE DELIVERED PERSONALLY OR SENT BY TELEGRAM, 562
TELECOPY, OR ELECTRONIC MAIL TRANSMISSION OR BY UNITED STATES 563
MAIL, EXPRESS MAIL, OR COURIER SERVICE, WITH POSTAGE OR FEES 565
PREPAID.
(B) In computing the period of time for the giving of a 567
notice required or permitted under sections 1702.01 to 1702.58, 568
inclusive, of the Revised Code THIS CHAPTER, or under the 569
articles, the regulations, or the bylaws of a corporation, or a 571
resolution of its members or trustees DIRECTORS, the day on which 572
the notice is given shall be excluded, and the day when the act 573
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for which notice is given is to be done shall be included, unless 574
the instrument calling for the notice otherwise provides. If 575
notice is permitted to be given by PERSONAL DELIVERY OR 576
TRANSMITTED BY TELEGRAM, TELECOPY, OR ELECTRONIC mail, the notice 578
shall be deemed to have been given when DELIVERED OR TRANSMITTED. 579
IF NOTICE IS SENT BY UNITED STATES MAIL, EXPRESS MAIL, OR COURIER 580
SERVICE, THE NOTICE SHALL BE DEEMED TO HAVE BEEN GIVEN WHEN 581
deposited in the mail OR WITH THE COURIER SERVICE.
(C) A WRITTEN NOTICE OR REPORT DELIVERED AS PART OF A 583
NEWSLETTER, MAGAZINE, OR OTHER PUBLICATION REGULARLY SENT TO 585
MEMBERS SHALL CONSTITUTE A WRITTEN NOTICE OR REPORT IF ADDRESSED 586
OR DELIVERED TO THE MEMBER'S ADDRESS SHOWN IN THE CORPORATION'S 587
CURRENT LIST OF MEMBERS, OR, IN THE CASE OF MEMBERS WHO ARE 588
RESIDENTS OF THE SAME HOUSEHOLD AND WHO HAVE THE SAME ADDRESS IN 589
THE CORPORATION'S CURRENT LIST OF MEMBERS, IF ADDRESSED OR 590
DELIVERED TO ONE OF SUCH MEMBERS AT THE ADDRESS APPEARING ON THE 591
CORPORATION'S CURRENT LIST OF MEMBERS. 592
Sec. 1702.03. A corporation may be formed UNDER THIS 601
CHAPTER for any purpose or purposes for which natural persons 603
lawfully may associate themselves, provided EXCEPT that when 604
there is a special provision in the Revised Code for the 605
formation thereunder of a designated class of corporations, a 606
corporation of such class shall be formed thereunder. 607
Sec. 1702.04. (A) Any person, singly or jointly with 616
others, and without regard to residence, domicile, or state of 617
incorporation, may form a corporation by signing and filing with 618
the secretary of state articles of incorporation, which shall set 619
forth the following: 620
(1) The name of the corporation; 622
(2) The place in this state where the principal office of 624
the corporation is to be located; 625
(3) The purpose or purposes for which the corporation is 627
formed; 628
(4) The names and addresses of not less than three natural 630
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persons who are to be initial trustees. 631
(B) The articles also may set forth the following: 633
(1) THE NAMES OF INDIVIDUALS WHO ARE TO SERVE AS THE 635
INITIAL DIRECTORS;
(2) The names of any persons or the designation of any 637
group of persons who are to be the initial members; 638
(2)(3) Any qualification of membership and the 640
classification of members; 641
(3)(4) A provision to the effect that the corporation 643
shall be subordinate to and subject to the authority of any head 644
or national association, lodge, order, beneficial association, 645
fraternal or beneficial society, foundation, federation, or any 646
other nonprofit corporation, society, organization, or 647
association; 648
(4)(5) Any lawful provision for the purpose of defining, 650
limiting, or regulating the exercise of the authority of the 651
corporation, the incorporators, the trustees DIRECTORS, the 652
officers, the members, or any class of members, or creating or 654
defining rights and privileges of the members among themselves or 655
in the property of the corporation, or governing the distribution 656
of assets on dissolution; 657
(5)(6) Any provision which THAT may be set forth in the 660
regulations; 661
(6)(7) A provision specifying the period of existence of 663
the corporation if it is to be otherwise than perpetual; 664
(7)(8) Any additional provision permitted by this chapter. 666
(C) A written appointment of a statutory agent for the 668
purposes set forth in section 1702.06 of the Revised Code shall 669
be filed with the articles, unless the corporation belongs to one 670
of the classes mentioned in division (N) of that section. 671
(D) The legal existence of the corporation shall begin 673
upon the filing of the articles, and, unless the articles 674
otherwise provide, its period of existence shall be perpetual. 675
Sec. 1702.05. (A) Except as provided in this section and 684
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in sections 1702.41 and 1702.45 of the Revised Code, the 685
secretary of state shall not accept for filing in the secretary 686
of state's office any articles if the corporate name set forth in 688
the articles is not distinguishable upon the secretary of state's 689
records from any of the following: 690
(1) The name of any other corporation, whether A nonprofit 692
CORPORATION or for profit A BUSINESS CORPORATION and whether that 694
of a domestic or of a foreign corporation authorized to do 695
business in this state;
(2) The name of any limited liability company registered 697
in the office of the secretary of state pursuant to Chapter 1705. 698
of the Revised Code, whether domestic or foreign; 699
(3) The name of any limited liability partnership 701
registered in the office of the secretary of state pursuant to 702
Chapter 1775. of the Revised Code, whether domestic or foreign; 705
(4) The name of any limited partnership registered in the 707
office of the secretary of state pursuant to Chapter 1782. of the 709
Revised Code, whether domestic or foreign; 711
(5) Any trade name, the exclusive right to which is at the 714
time in question registered in the office of the secretary of 715
state pursuant to Chapter 1329. of the Revised Code. 716
(B) The secretary of state shall determine for purposes of 718
this section whether a name is "distinguishable" from another 719
name upon the secretary of state's records. Without excluding 721
other names that may not constitute distinguishable names in this 722
state, a name is not considered distinguishable from another name 723
for purposes of this section solely because it differs from the 724
other name in only one or more of the following manners: 725
(1) The use of the word "corporation," "company," 727
"incorporated," "limited," or any abbreviation of any of those 729
words; 730
(2) The use of any article, conjunction, contraction, 732
abbreviation, or punctuation; 733
(3) The use of a different tense or number of the same 735
17
word. 736
(C) A corporation may apply to the secretary of state for 738
authorization to use a name that is not distinguishable upon the 739
secretary of state's records from the name of any other 740
corporation, any limited liability company, limited liability 741
partnership, or limited partnership, or from a registered trade 743
name, if there also is filed in the office of the secretary of 744
state, on a form prescribed by the secretary of state, the 745
consent of the other entity, or, in the case of a registered 746
trade name, the person in whose name is registered the exclusive 748
right to use the name, which consent is evidenced in a writing 749
signed by any authorized officer or authorized representative of 751
the other entity or person.
(D) In case of judicial sale or judicial transfer, by sale 753
or transfer of good will or otherwise, of the right to use the 754
name of a nonprofit corporation or BUSINESS corporation for 755
profit, whether that of a domestic corporation or of a foreign 757
corporation authorized to exercise its corporate privileges in 758
this state or to do business in this state, the secretary of 759
state, at the instance of the purchaser or transferee of such 760
right, shall accept for filing articles of a corporation with a 761
name the same as or similar to the name of such other 762
corporation, if there also is filed in the office of the 763
secretary of state a certified copy of the decree or order of 764
court confirming or otherwise evidencing the purchase or 765
transfer. 766
(E) Any person who wishes to reserve a name for a proposed 768
new corporation, or any corporation intending to change its name, 769
may submit to the secretary of state a written application, on a 770
form prescribed by the secretary of state, for the exclusive 771
right to use a specified name as the name of a corporation. If 773
the secretary of state finds that, under this section, the 774
specified name is available for such use, the secretary of state 775
shall file such application, and, from the date of such filing, 777
18
such applicant shall have the exclusive right for sixty days to 779
use the specified name as the name of a corporation, counting the 780
date of such filing as the first of the sixty days. The right so 782
obtained may be transferred by the applicant or other holder of 783
the right by the filing in the office of the secretary of state 784
of a written transfer, on a form prescribed by the secretary of 785
state, stating the name and address of the transferee. 787
(F) For filing under this section any application or other 789
document, other than articles or a consent to the use of a name, 790
the secretary of state shall charge and collect a fee of five 791
dollars. 792
Sec. 1702.06. (A) Every corporation shall have and 801
maintain an agent, sometimes referred to as the "statutory 802
agent," upon whom any process, notice, or demand required or 803
permitted by statute to be served upon a corporation may be 804
served. The agent may be a natural person who is a resident of 805
this state, or may be a domestic OR FOREIGN BUSINESS corporation 806
for profit or a foreign corporation for profit holding a license 808
as such under the laws of this state that is authorized by its 809
articles of incorporation to act as such agent, and that has a 810
business address in this state. 811
(B) The secretary of state shall not accept original 813
articles for filing unless there is filed with the articles a 814
written appointment of an agent signed by the incorporators of 815
the corporation or a majority of them and a written acceptance of 816
the appointment signed by the agent. In all other cases, the 817
corporation shall appoint the agent and shall file in the office 818
of the secretary of state a written appointment of the agent that 819
is signed by any authorized officer of the corporation and a 820
written acceptance of the appointment that is either the original 821
acceptance signed by the agent or a photocopy, facsimile, or 823
similar reproduction of the original acceptance signed by the
agent. 824
(C) The written appointment of an agent shall set forth 826
19
the name and address in this state of the agent, including the 827
street and number or other particular description, and shall 828
otherwise be in such form as the secretary of state prescribes. 829
The secretary of state shall keep a record of the names of 830
corporations and the names and addresses of their respective 831
agents. 832
(D) If any agent dies, removes from the state, or resigns, 834
the corporation shall forthwith appoint another agent and file 835
with the secretary of state, on a form prescribed by the 836
secretary of state, a written appointment of such THAT agent. 837
(E) If the agent changes the agent's address from that 839
appearing upon the record in the office of the secretary of 840
state, the corporation or the agent shall forthwith file with the 841
secretary of state, on a form prescribed by the secretary of 843
state, a written statement setting forth the new address. 844
(F) An agent may resign by filing with the secretary of 846
state, on a form prescribed by the secretary of state, a written 848
notice to that effect that is signed by the agent and by sending 849
a copy of the notice to the corporation at the current or last 850
known address of its principal office on or prior to the date 851
that notice is filed with the secretary of state. The notice 852
shall set forth the name of the corporation, the name and current 853
address of the agent, the current or last known address, 854
including the street and number or other particular description, 855
of the corporation's principal office, the resignation of the 856
agent, and a statement that a copy of the notice has been sent to 857
the corporation within the time and in the manner prescribed by 858
this division. Upon the expiration of sixty days after such 859
filing, the authority of the agent shall terminate. 860
(G) A corporation may revoke the appointment of an agent 862
by filing with the secretary of state, on a form prescribed by 863
the secretary of state, a written appointment of another agent 865
and a statement that the appointment of the former agent is 866
revoked.
20
(H) Any process, notice, or demand required or permitted 868
by statute to be served upon a corporation may be served upon the 869
corporation by delivering a copy of it to its agent, if a natural 870
person, or by delivering a copy of it at the address of its agent 871
in this state, as such address appears upon the record in the 872
office of the secretary of state. If (1) the agent cannot be 873
found, or (2) the agent no longer has that address, or (3) the 874
corporation has failed to maintain an agent as required by this 875
section, and if in any such case the party desiring that such 876
process, notice, or demand be served, or the agent or 877
representative of the party, shall have filed with the secretary 878
of state an affidavit stating that one of the foregoing 879
conditions exists and stating the most recent address of the 880
corporation which THAT the party after diligent search has been 881
able to ascertain, then service of process, notice, or demand 883
upon the secretary of state, as the agent of the corporation, may 884
be initiated by delivering to the secretary of state or at the 886
secretary of state's office triplicate copies of such process, 887
notice, or demand and by paying to the secretary of state a fee 888
of five dollars. The secretary of state shall forthwith give 889
notice of such delivery to the corporation at its principal 890
office as shown upon the record in the secretary of state's 891
office and also to the corporation at any different address set 893
forth in the above mentioned affidavit, and shall forward to the 894
corporation at each of said THOSE addresses, by certified mail, 896
with request for return receipt, a copy of such process, notice, 897
or demand; and thereupon service upon the corporation shall be 898
deemed to have been made.
(I) The secretary of state shall keep a record of each 900
process, notice, and demand delivered to the secretary of state 902
or at the secretary of state's office under this section or any 903
other law of this state which THAT authorizes service upon the 904
secretary of state, and shall record the time of such delivery 906
and the secretary of state's action thereafter with respect 907
21
thereto.
(J) This section does not limit or affect the right to 909
serve any process, notice, or demand upon a corporation in any 910
other manner permitted by law. 911
(K) Except when an original appointment of an agent is 913
filed with the original articles, a written appointment of an 914
agent or a written statement filed by a corporation with the 915
secretary of state shall be signed by any authorized officer of 916
the corporation or by the incorporators of the corporation or a 917
majority of them if no trustees DIRECTORS have been elected. 918
(L) For filing a written appointment of an agent other 920
than one filed with original articles, and for filing a statement 921
of change of address of an agent, the secretary of state shall 922
charge and collect a fee of three dollars. 923
(M) Upon the failure of any corporation to appoint another 925
agent or to file a statement of change of address of an agent, 926
the secretary of state shall give notice thereof by certified 927
mail to the corporation at the address set forth in the notice of 928
registration RESIGNATION or on the most recent statement of 929
continued existence filed in this state by the corporation. 931
Unless the failure is cured within thirty days after the mailing 932
by the secretary of state of the notice or within any further 933
period the secretary of state grants, upon the expiration of that 934
period from the date of the mailing, the articles of the 935
corporation shall be canceled without further notice or action by 936
the secretary of state. The secretary of state shall make a 937
notation of the cancellation on the secretary of state's records. 938
A corporation whose articles have been canceled may be reinstated 940
by filing, on a form prescribed by the secretary of state, an 941
application for reinstatement and the required appointment of 942
agent or required statement, and by paying a filing fee of ten 943
dollars. The rights, privileges, and franchises of a corporation 944
whose articles have been reinstated are subject to section 945
1702.60 of the Revised Code. The secretary of state shall 946
22
furnish the tax commissioner a monthly list of all corporations 947
canceled and reinstated under this division. 948
(N) This section does not apply to banks, trust companies, 950
insurance companies, or any corporation defined under the laws of 951
this state as a public utility for taxation purposes. 952
Sec. 1702.07. (A) When articles of incorporation and 961
other certificates relating to the corporation are submitted to 962
the secretary of state, the secretary of state shall, after 965
finding that they comply with the provisions of sections 1702.01 966
to 1702.58 of the Revised Code THIS CHAPTER, accept the articles 967
and other certificates for filing and make a copy of the articles 969
and other certificates by microfilm or by any authorized 971
photostatic or digitized process. Evidence of the filing shall 973
be returned to the person filing the articles or certificate. 974
(B) All persons shall have the opportunity of acquiring 976
knowledge of the contents of the articles and other certificates 977
filed and recorded in the office of the secretary of state, but 978
no person dealing with the corporation shall be charged with 979
constructive notice of the contents of any such articles or 980
certificates by reason of such filing or recording.
Sec. 1702.08. (A) When an unincorporated society or 989
association, organized for any of the purposes for which a 990
corporation could be formed under sections 1702.01 to 1702.58, 992
inclusive, of the Revised Code THIS CHAPTER, authorizes the 993
incorporation of such society or association, by the same 994
procedure and affirmative vote of its voting members as the 995
regulations, constitution, or other fundamental agreement of such 996
society or association requires for an amendment to such 997
fundamental agreement or, if no such vote is specified, by a
majority vote of the voting members present IN PERSON OR, IF 998
PERMITTED, BY MAIL OR BY PROXY, at a duly convened meeting the 999
purpose of which is stated in the notice of the meeting, then 1,000
upon the filing of the articles under section 1702.04 of the 1,001
Revised Code setting forth such facts and that such required vote 1,002
23
has been obtained, such society or association shall become a 1,003
corporation and the members of such society or association shall 1,004
become members of such corporation in accordance with provisions 1,005
in the articles to that effect.
(B) All the rights, privileges, immunities, powers, 1,007
franchises, and authority, and all the property and obligations 1,009
of such unincorporated society or association shall thereupon 1,010
pass to, vest in, and (in the case of liabilities and 1,011
obligations) be obligations of the corporation so formed.
Sec. 1702.10. After the articles have been filed and at 1,020
any time prior to a meeting of voting members, the incorporators 1,021
or a majority of them, at a meeting, may adopt regulations for 1,022
the government of the corporation, the conduct of its affairs, 1,023
and the management of its property, consistent with law and the 1,024
articles; may elect trustees DIRECTORS in addition to those ANY 1,025
DIRECTORS named in the articles; and may also elect members in 1,026
addition to any named or provided for in the articles. If the 1,027
incorporators fail to adopt regulations as herein authorized BY 1,029
THIS SECTION WITHIN NINETY DAYS AFTER THE DATE OF INCORPORATION, 1,030
regulations may be adopted at a meeting of voting members by the 1,031
affirmative vote of a majority of the voting members.
Sec. 1702.11. (A) Without limiting the generality of such 1,040
authority, the regulations, whether designated a constitution or 1,041
rules, or by some other term, may include provisions with respect 1,042
to the following: 1,043
(1) The time and place for holding, the manner of and 1,045
authority for calling, giving notice of, and conducting, and the 1,046
requirements of a quorum for, meetings of members, or their 1,047
elected representatives or delegates; 1,048
(2) The qualifications, admission, voluntary withdrawal, 1,050
censure, and suspension of members, and the termination of 1,051
membership; 1,052
(3) The fees and dues of members; 1,054
(4) The rights of members, or classes of members, or of 1,056
24
their elected representatives or delegates, to vote; the manner 1,057
of conducting votes of members on matters, INCLUDING ANY RIGHT TO 1,058
VOTE BY MAIL OR BY PROXY; the specification of their THE relative 1,060
rights and privileges among themselves MEMBERS and in the 1,061
property of the corporation; and, in the case of charitable 1,062
corporations, limitations upon or regulations governing their THE 1,064
right OF MEMBERS to examine the books and records of the 1,065
corporation;
(5) The election of representatives or delegates OF 1,067
MEMBERS and their authority, rights, and privileges; 1,068
(6) The number, classification, manner of fixing or 1,070
changing the number, qualifications, term of office, voting 1,071
rights, compensation or manner of fixing compensation, and the 1,072
removal of trustees DIRECTORS; 1,073
(7) The time and place for holding, the manner of and 1,075
authority for calling, giving notice of, and conducting, and the 1,076
requirements of a quorum for, meetings of the trustees DIRECTORS; 1,078
(8) The appointment of an executive and other committees 1,080
of the trustees DIRECTORS or of members, and their authority, AND 1,082
THE METHOD BY WHICH THEY TAKE ACTION;
(9) The titles, qualifications, duties, term of office, 1,084
compensation or manner of fixing compensation, and the removal, 1,085
of officers; 1,086
(10) Defining, limiting, or regulating the exercise of the 1,088
authority of the corporation, the trustees DIRECTORS, the 1,089
officers, the members, or any class of members; 1,091
(11) The method by which voting members may change the 1,093
regulations. 1,094
(B) In the absence of provisions in the articles or the 1,096
regulations with respect to the method of changing the 1,097
regulations, the regulations may be amended, or new regulations 1,098
may be adopted, by the voting members at a meeting held for such 1,099
purpose, by the affirmative vote of a majority of the voting 1,100
members present IN PERSON OR, IF PERMITTED, BY MAIL OR BY PROXY, 1,101
25
if a quorum is present. 1,102
(C) The members of a nonprofit corporation may adopt or 1,104
authorize the trustees DIRECTORS to adopt, either before or 1,105
during an emergency, as defined in division (U) of section 1,107
1701.01 of the Revised Code, emergency regulations operative only 1,108
during an emergency. The emergency regulations may include such 1,109
provisions as are authorized to be included in regulations by 1,110
divisions (A) and (B) of this section. In addition, unless 1,111
expressly prohibited by the articles or regulations, and 1,112
notwithstanding any different provisions in this chapter and any 1,113
different provision in the articles or regulations which THAT are 1,114
not expressly stated to be operative during an emergency, the 1,116
emergency regulations may make any provision that may be 1,117
practical or necessary with respect to meetings, committees, 1,118
vacancies, and temporary appointments of the trustees DIRECTORS, 1,119
and the rank and succession of officers, the same as may be done 1,121
by corporations for profit under division (C) of section 1701.11 1,122
of the Revised Code, reading "directors" as "trustees" where the 1,123
context so requires. 1,124
(D) Any change in the regulations made in accordance with 1,126
their provisions or pursuant to division (B) of this section 1,127
shall be binding on all members. 1,128
(E) If, pursuant to the regulations, such regulations are 1,130
amended or new regulations adopted without a meeting of the 1,131
voting members, the secretary of the corporation shall mail a 1,132
copy of the amendment or the new regulations to each voting 1,133
member who would have been entitled to vote on the amendment or 1,134
new regulations and did not participate in the adoption of the 1,135
amendment or new regulations. 1,136
(F) No person dealing with the corporation shall be 1,138
charged with constructive notice of the regulations. 1,139
(G) Unless expressly prohibited by the articles or 1,141
regulations, or unless otherwise provided by the emergency 1,142
regulations, and notwithstanding any different provision in this 1,143
26
chapter, the special rules provided for corporations for profit 1,144
under division (F) of section 1701.11 of the Revised Code are 1,145
applicable to a nonprofit corporation during an emergency, as 1,146
defined in division (U) of section 1701.01 of the Revised Code, 1,147
reading "directors" as "trustees" where the context so requires. 1,148
Sec. 1702.12. (A) A corporation may sue and be sued. 1,157
(B) A corporation may adopt and alter a corporate seal and 1,159
use it or a facsimile of it, but failure to affix the corporate 1,160
seal shall not affect the validity of any instrument. 1,161
(C) Unless otherwise provided in the articles, a 1,163
corporation may take property of any description, or any interest 1,164
in property, by gift, devise, or bequest. 1,165
(D) Subject to limitations prescribed by law or in its 1,167
articles, a corporation may make donations for the public 1,168
welfare, for religious, charitable, scientific, literary, or 1,169
educational purposes, or in furtherance of any of its purposes. 1,170
(E)(1) A corporation may indemnify or agree to indemnify 1,172
any person who was or is a party, or is threatened to be made a 1,173
party, to any threatened, pending, or completed civil, criminal, 1,174
administrative, or investigative action, suit, or proceeding, 1,175
other than an action by or in the right of the corporation, by 1,176
reason of the fact that he THE PERSON is or was a trustee 1,177
DIRECTOR, officer, employee, or agent of or a volunteer of the 1,180
corporation, or is or was serving at the request of the 1,181
corporation as a trustee, director, officer, employee, member, 1,182
manager, or agent of or a volunteer of another domestic or 1,183
foreign nonprofit corporation or BUSINESS corporation for profit, 1,185
a limited liability company, or a partnership, joint venture, 1,186
trust, or other enterprise, against expenses, including 1,188
attorney's fees, judgments, fines, and amounts paid in settlement 1,189
actually and reasonably incurred by him THE PERSON in connection 1,190
with such action, suit, or proceeding, if he THE PERSON acted in 1,192
good faith and in a manner he THE PERSON reasonably believed to 1,194
be in or not opposed to the best interests of the corporation, 1,195
27
and, with respect to any criminal action or proceeding, if he THE 1,196
PERSON had no reasonable cause to believe his THE PERSON'S 1,197
conduct was unlawful. The termination of any action, suit, or 1,198
proceeding by judgment, order, settlement, or conviction, or upon 1,199
a plea of nolo contendere or its equivalent, shall not create, of 1,200
itself, a presumption that the person did not act in good faith 1,201
and in a manner he THE PERSON reasonably believed to be in or not 1,202
opposed to the best interests of the corporation, and, with 1,204
respect to any criminal action or proceeding, a presumption that 1,205
the person had reasonable cause to believe that his THE PERSON'S 1,206
conduct was unlawful. 1,207
(2) A corporation may indemnify or agree to indemnify any 1,209
person who was or is a party, or is threatened to be made a 1,210
party, to any threatened, pending, or completed action or suit by 1,211
or in the right of the corporation to procure a judgment in its 1,212
favor, by reason of the fact that he THE PERSON is or was a 1,213
trustee DIRECTOR, officer, employee, or agent of or a volunteer 1,215
of the corporation, or is or was serving at the request of the 1,216
corporation as a trustee, director, officer, employee, member, 1,217
manager, or agent of or a volunteer of another domestic or 1,219
foreign nonprofit corporation or BUSINESS corporation for profit, 1,220
a limited liability company, or a partnership, joint venture, 1,222
trust, or other enterprise against expenses, including attorney's 1,223
fees, actually and reasonably incurred by him THE PERSON in 1,224
connection with the defense or settlement of such action or suit, 1,226
if he THE PERSON acted in good faith and in a manner he THE 1,228
PERSON reasonably believed to be in or not opposed to the best 1,230
interests of the corporation, except that no indemnification 1,231
shall be made in respect of any of the following:
(a) Any claim, issue, or matter as to which such THE 1,233
person is adjudged to be liable for negligence or misconduct in 1,234
the performance of his THE PERSON'S duty to the corporation 1,235
unless, and only to the extent that, the court of common pleas or 1,237
the court in which the action or suit was brought determines, 1,238
28
upon application, that, despite the adjudication of liability but 1,239
in view of all the circumstances of the case, such THE person is 1,240
fairly and reasonably entitled to indemnity for such expenses as 1,241
the court of common pleas or such other court considers proper; 1,242
(b) Any action or suit in which liability is asserted 1,244
against a trustee DIRECTOR and that liability is asserted only 1,245
pursuant to section 1702.55 of the Revised Code. 1,247
(3) To the extent that a trustee, director, officer, 1,249
employee, member, manager, agent, or volunteer has been 1,250
successful on the merits or otherwise in defense of any action, 1,252
suit, or proceeding referred to in division (E)(1) or (2) of this 1,253
section, or in defense of any claim, issue, or matter in such an 1,254
action, suit, or proceeding, he THE PERSON shall be indemnified 1,255
against expenses, including attorney's fees, actually and 1,257
reasonably incurred by him THE PERSON in connection with that 1,258
action, suit, or proceeding. 1,259
(4) Unless ordered by a court and subject to division 1,261
(E)(3) of this section, any indemnification under division (E)(1) 1,262
or (2) of this section shall be made by the corporation only as 1,263
authorized in the specific case, upon a determination that 1,264
indemnification of the trustee, director, officer, employee, 1,265
member, manager, agent, or volunteer is proper in the 1,266
circumstances because he THE PERSON has met the applicable 1,268
standard of conduct set forth in division (E)(1) or (2) of this 1,269
section. Such determination shall be made in any of the 1,270
following manners:
(a) By a majority vote of a quorum consisting of trustees 1,272
DIRECTORS of the indemnifying corporation who were not and are 1,274
not parties to or threatened with the action, suit, or proceeding 1,275
referred to in division (E)(1) or (2) of this section; 1,276
(b) Whether or not a quorum as described in division 1,278
(E)(4)(a) of this section is obtainable, and if a majority of a 1,279
quorum of disinterested trustees DIRECTORS so directs, in a 1,280
written opinion by independent legal counsel other than an 1,282
29
attorney, or a firm having associated with it an attorney, who 1,283
has been retained by or who has performed services for the 1,284
corporation or any person to be indemnified within the past five 1,285
years;
(c) By the members; 1,287
(d) By the court of common pleas or the court in which the 1,289
action, suit, or proceeding referred to in division (E)(1) or (2) 1,290
of this section was brought. 1,291
If an action or suit by or in the right of the corporation 1,293
is involved, any determination made by the disinterested trustees 1,294
DIRECTORS under division (E)(4)(a) of this section or by 1,296
independent legal counsel under division (E)(4)(b) of this 1,297
section shall be communicated promptly to the person who 1,298
threatened or brought the action or suit under division (E)(2) of 1,299
this section, and, within ten days after receipt of such 1,300
notification, such person shall have the right to petition the 1,301
court of common pleas or the court in which such action or suit 1,302
was brought to review the reasonableness of such determination. 1,303
(5)(a)(i) Unless, at the time of a trustee's DIRECTOR'S or 1,305
volunteer's act or omission that is the subject of an action, 1,306
suit, or proceeding referred to in division (E)(1) or (2) of this 1,307
section, the articles or regulations of the corporation state, by 1,308
specific reference to this division, that its provisions do not 1,309
apply to the corporation, or unless the only liability asserted 1,310
against a trustee DIRECTOR in an action, suit, or proceeding 1,311
referred to in division (E)(1) or (2) of this section is pursuant 1,313
to section 1702.55 of the Revised Code, or unless division 1,314
(E)(5)(a)(ii) of this section applies, the expenses incurred by 1,315
the trustee DIRECTOR or volunteer in defending the action, suit, 1,317
or proceeding, including attorney's fees, shall be paid by the 1,318
corporation. Upon the request of the trustee DIRECTOR or 1,319
volunteer and in accordance with division (E)(5)(b) of this 1,321
section, those expenses shall be paid as they are incurred, in 1,322
advance of the final disposition of the action, suit, or 1,323
30
proceeding.
(ii) Notwithstanding division (E)(5)(a)(i) of this 1,325
section, the expenses incurred by a trustee DIRECTOR or volunteer 1,327
in defending an action, suit, or proceeding referred to in 1,328
division (E)(1) or (2) of this section, including attorney's 1,329
fees, shall not be paid by the corporation upon the final 1,330
disposition of the action, suit, or proceeding, or, if paid in 1,331
advance of the final disposition of the action, suit, or 1,332
proceeding, shall be repaid to the corporation by the trustee 1,333
DIRECTOR or volunteer, if it is proved, by clear and convincing 1,335
evidence, in a court with jurisdiction that the act or omission 1,336
of the trustee DIRECTOR or volunteer was one undertaken with a 1,338
deliberate intent to cause injury to the corporation or was one 1,339
undertaken with a reckless disregard for the best interests of 1,340
the corporation.
(b) Expenses, including attorney's fees, incurred by a 1,342
trustee, director, officer, employee, member, manager, agent, or 1,343
volunteer in defending any action, suit, or proceeding referred 1,345
to in division (E)(1) or (2) of this section may be paid by the 1,346
corporation as they are incurred, in advance of the final 1,347
disposition of the action, suit, or proceeding, as authorized by 1,348
the trustees DIRECTORS in the specific case, upon receipt of an 1,350
undertaking by or on behalf of the trustee, director, officer, 1,351
employee, member, manager, agent, or volunteer to repay the 1,353
amount if it ultimately is determined that he THE PERSON is not 1,354
entitled to be indemnified by the corporation. 1,355
(6) The indemnification authorized by this section is not 1,357
exclusive of, and shall be in addition to, any other rights 1,358
granted to those seeking indemnification, pursuant to the 1,359
articles, the regulations, any agreement, a vote of members or 1,360
disinterested trustees DIRECTORS, or otherwise, both as to action 1,362
in their official capacities and as to action in another capacity 1,363
while holding their offices or positions, and shall continue as 1,364
to a person who has ceased to be a trustee, director, officer, 1,365
31
employee, member, manager, agent, or volunteer and shall inure to 1,366
the benefit of the heirs, executors, and administrators of such a 1,368
person.
(7) A corporation may purchase and maintain insurance, or 1,370
furnish similar protection, including, but not limited to, trust 1,371
funds, letters of credit, or self-insurance, for or on behalf of 1,372
any person who is or was a trustee DIRECTOR, officer, employee, 1,373
agent, or volunteer of the corporation, or is or was serving at 1,375
the request of the corporation as a trustee, director, officer, 1,376
employee, member, manager, agent, or volunteer of another 1,377
domestic or foreign nonprofit corporation or BUSINESS corporation 1,378
for profit, a limited liability company, or a partnership, joint 1,380
venture, trust, or other enterprise, against any liability 1,381
asserted against him THE PERSON and incurred by him THE PERSON in 1,383
any such capacity, or arising out of his THE PERSON'S status as 1,384
such, whether or not the corporation would have the power to 1,386
indemnify him THE PERSON against that liability under this 1,388
section. Insurance may be so purchased from or so maintained 1,389
with a person in which the corporation has a financial interest. 1,390
(8) The authority of a corporation to indemnify persons 1,392
pursuant to division (E)(1) or (2) of this section does not limit 1,393
the payment of expenses as they are incurred, in advance of the 1,394
final disposition of an action, suit, or proceeding, pursuant to 1,395
division (E)(5) of this section or the payment of 1,396
indemnification, insurance, or other protection that may be 1,397
provided pursuant to division (E)(6) or (7) of this section. 1,398
Divisions (E)(1) and (2) of this section do not create any 1,400
obligation to repay or return payments made by a corporation
pursuant to division (E)(5), (6), or (7) of this section. 1,401
(9) As used in division (E) of this section, "corporation" 1,403
includes all constituent corporations in a consolidation or 1,404
merger, and the new or surviving corporation, so that any person 1,405
who is or was a trustee DIRECTOR, officer, employee, agent, or 1,406
volunteer of a constituent corporation or is or was serving at 1,408
32
the request of a constituent corporation as a trustee, director, 1,409
officer, employee, member, manager, agent, or volunteer of 1,410
another domestic or foreign nonprofit corporation or BUSINESS 1,411
corporation for profit, a limited liability company, or a 1,413
partnership, joint venture, trust, or other enterprise, shall 1,414
stand in the same position under this section with respect to the 1,415
new or surviving corporation as he THE PERSON would if he THE 1,417
PERSON had served the new or surviving corporation in the same 1,418
capacity.
(F) In carrying out the purposes stated in its articles 1,420
and subject to limitations prescribed by law or in its articles, 1,421
a corporation may do the following: 1,422
(1) Purchase or otherwise acquire, lease as lessee, invest 1,424
in, hold, use, lease as lessor, encumber, sell, exchange, 1,425
transfer, and dispose of property of any description or any 1,426
interest in property of any description; 1,427
(2) Make contracts; 1,429
(3) Form or acquire the control of other domestic or 1,431
foreign nonprofit corporations or BUSINESS corporations for 1,432
profit; 1,433
(4) Be a partner, member, associate, or participant in 1,435
other enterprises or ventures, whether profit or nonprofit; 1,436
(5) Borrow money, and issue, sell, and pledge its notes, 1,438
bonds, and other evidences of indebtedness, and secure any of its 1,439
obligations by mortgage, pledge, or deed of trust, of all or any 1,440
of its property, and guarantee or secure obligations of any 1,441
person; 1,442
(6) Become a member of another corporation; 1,444
(7) Conduct its affairs in this state and elsewhere; 1,446
(8) Resist a change or potential change in control of the 1,448
corporation, if the trustees DIRECTORS, by a majority vote of a 1,449
quorum, determine that the change or potential change is opposed 1,451
to or not in the best interests of the corporation, upon 1,452
consideration of any of the matters set forth in division (E) of 1,453
33
section 1702.30 of the Revised Code; 1,454
(9) Do all things permitted by law and exercise all 1,456
authority within the purposes stated in its articles or 1,457
incidental to those purposes. 1,458
(G) Irrespective of the purposes stated in its articles, 1,460
but subject to limitations or prohibitions stated in its 1,461
articles, a corporation, in addition to the authority conferred 1,462
by division (F) of this section, may invest its funds not 1,463
currently needed in carrying out its purposes in any shares or 1,464
other securities of another nonprofit corporation or BUSINESS 1,465
corporation for profit, or another business or undertaking. 1,467
(H)(1) Notwithstanding any other provision of this section 1,469
to the contrary, no corporation that is a "private foundation," 1,470
as defined in section 509 of the Internal Revenue Code, shall do 1,471
the following: 1,472
(a) Engage in any act of "self-dealing," as defined in 1,474
section 4941 (d) of the Internal Revenue Code, that would give 1,475
rise to any liability for any tax imposed by section 4941 of the 1,476
Internal Revenue Code; 1,477
(b) Retain any "excess business holdings," as defined in 1,479
section 4943 (c) of the Internal Revenue Code, that would give 1,480
rise to any liability for any tax imposed by section 4943 of the 1,481
Internal Revenue Code; 1,482
(c) Make any investment that would jeopardize the carrying 1,484
out of any of its exempt purposes, within the meaning of section 1,485
4944 of the Internal Revenue Code, so as to give rise to any 1,486
liability for any tax imposed by that section; 1,487
(d) Make any "taxable expenditures," as defined in section 1,489
4945 (d) of the Internal Revenue Code, that would give rise to 1,490
any liability for any tax imposed by section 4945 of the Internal 1,491
Revenue Code. 1,492
(2) Each corporation that is a "private foundation," as 1,494
defined in section 509 of the Internal Revenue Code, shall, for 1,495
the purposes specified in its articles, distribute at such time 1,496
34
and in such manner, for each taxable year, amounts at least 1,497
sufficient to avoid liability for any tax imposed by section 4942 1,498
of the Internal Revenue Code. 1,499
(3) Divisions (H)(1) and (2) of this section apply to all 1,501
corporations described in them, whether or not contrary to the 1,502
provisions of the articles or regulations of such a corporation, 1,503
except that divisions (H)(1) and (2) of this section do not apply 1,504
to a corporation in existence on September 17, 1971, to the 1,505
extent that such corporation provides to the contrary by 1,506
amendment to its articles adopted after that date. 1,507
(4) Violation of a provision of division (H)(1) or (2) of 1,509
this section by a corporation to which the provisions of those 1,510
divisions are applicable is not cause for cancellation of its 1,511
articles. No trustee DIRECTOR or officer of a corporation to 1,512
which the provisions of division (H)(1) or (2) of this section 1,514
are applicable is personally liable for a violation of a 1,515
prohibition or requirement of those provisions, unless he THE 1,516
DIRECTOR OR OFFICER participated in such violation knowing that 1,518
it was a violation, and no such trustee DIRECTOR or officer is 1,519
personally liable if such violation was not willful and was due 1,521
to reasonable cause, except that this division does not exonerate 1,522
a trustee DIRECTOR or officer from any responsibility or 1,524
liability to which he THE DIRECTOR OR OFFICER is subject under 1,525
any other rule of law, whether or not duplicated in division 1,526
(H)(1) or (2) of this section. 1,527
(5) Except as provided in division (H)(4) of this section, 1,529
nothing in division (H) of this section impairs the rights and 1,530
powers of the courts or the attorney general of this state with 1,531
respect to any corporation. 1,532
(6) As used in division (H) of this section, "Internal 1,534
Revenue Code" means the "Internal Revenue Code of 1986," 100 1,535
Stat. 2085, 26 U.S.C. 1, as amended. 1,536
(I)(1) No lack of, or limitation upon, the authority of a 1,538
corporation shall be asserted in any action except as follows: 1,539
35
(a) By the state in an action by it against the 1,541
corporation; 1,542
(b) By or on behalf of the corporation against a trustee 1,544
DIRECTOR, an officer, or a member as such; 1,546
(c) By a member as such or by or on behalf of the members 1,548
against the corporation, a trustee DIRECTOR, an officer, or a 1,549
member as such. 1,551
(2) Division (I)(1) of this section shall apply to any 1,553
action brought in this state upon any contract made in this state 1,554
by a foreign corporation. 1,555
Sec. 1702.13. (A) The corporation shall keep a membership 1,564
book MAINTAIN A RECORD OF ITS MEMBERS containing the name and 1,565
address of each member, the date of his admission to membership, 1,567
and, if members are classified, the class to which he THE MEMBER 1,568
belongs.
(B) A corporation may issue certificates evidencing 1,570
membership in it, but a corporation incorporated on or after June 1,571
9, 1927, shall not issue certificates for shares. 1,572
(C) Membership in a corporation may be terminated in the 1,574
manner provided by law, the articles, or the regulations, and 1,575
upon the termination of membership for any cause, such fact and 1,576
the date of termination shall be recorded in the CORPORATION'S 1,577
membership book RECORDS. 1,578
(D) Unless the articles or the regulations otherwise 1,580
provide, all the rights and privileges of a member in the 1,581
corporation and its property shall cease on termination of his 1,582
membership. 1,583
(E) If permitted by the articles or the regulations of a 1,585
corporation, another nonprofit corporation or, A BUSINESS 1,586
corporation for profit, A LIMITED LIABILITY COMPANY, or a ANY 1,588
partnership, may become a member of the first mentioned 1,590
corporation.
(F) Whenever the number of members of a corporation that, 1,592
under the law, the articles, or the regulations, must have a 1,593
36
specified number of members, is reduced below the specified 1,594
number, the corporation shall not be required because of that 1,595
reduction to cease carrying on its activities, but the continuing 1,596
members, if two or more, may fill all vacancies. 1,597
(G) UNLESS OTHERWISE PROVIDED IN THE ARTICLES OR 1,599
REGULATIONS OF A CORPORATION, ALL MEMBERS HAVE THE SAME 1,600
MEMBERSHIP RIGHTS AND PRIVILEGES.
Sec. 1702.14. Where neither the articles nor the 1,609
regulations provide for members thereof as such, or where a 1,610
corporation has in fact no members other than the trustees 1,611
DIRECTORS, the trustees DIRECTORS shall, for the purposes of any 1,612
statute or rule of law relating to corporations, be taken to be 1,613
the members of such corporation, and they shall have all the 1,614
rights and privileges of members; provided, EXCEPT that where the 1,615
provisions in sections 1702.01 to 1702.58, inclusive, of the 1,617
Revised Code THIS CHAPTER relating to meetings of trustees 1,618
DIRECTORS differ, it shall be sufficient to comply with the 1,619
provisions relating to trustees DIRECTORS. 1,620
Sec. 1702.15. Each corporation shall keep correct and 1,629
complete books and records of account, together with minutes of 1,630
the proceedings of its incorporators, members, trustees 1,631
DIRECTORS, and committees of the trustees DIRECTORS or members. 1,632
Subject to limitations prescribed in the articles or the 1,633
regulations upon the right of members of charitable corporations 1,634
A CORPORATION to examine the books and records, all books and 1,636
records of a corporation, including the membership book RECORDS 1,637
prescribed by section 1702.13 of the Revised Code, may be 1,638
examined by any member or trustee DIRECTOR or the agent or 1,639
attorney of either, for any reasonable and proper purpose and at 1,641
any reasonable time.
Sec. 1702.16. An annual meeting of voting members for the 1,650
election of trustees DIRECTORS and the consideration of reports 1,651
to be laid before such meeting shall be held on a date designated 1,653
by or in the manner provided for in the articles or the 1,654
37
regulations. In the absence of such a designation, the annual
meeting shall be held on the first Monday of the fourth month 1,655
following the close of each fiscal year of the corporation. When 1,656
the annual meeting is not held or trustees DIRECTORS are not 1,657
elected thereat, they may be elected at a special meeting called 1,659
for that purpose.
Sec. 1702.17. (A) Meetings of voting members may be 1,668
called by any of the following: 1,669
(1) The chairman CHAIRPERSON of the board, the president, 1,671
or, in case of the president's absence, death, or disability, the 1,673
vice-president authorized to exercise the authority of the 1,674
president;
(2) The trustees DIRECTORS by action at a meeting, or a 1,676
majority of the trustees DIRECTORS acting without a meeting; 1,678
(3) The lesser of (a) ten per cent of the voting members 1,680
or (b) twenty-five of such members, unless the articles or the 1,681
regulations specify for such purpose a smaller or larger 1,682
proportion or number, but not in excess of fifty per cent of such 1,683
members;
(4) Such other officers or persons as the articles or the 1,685
regulations authorize to call such meetings. 1,686
(B) Meetings of voting members may be held either within 1,688
or without this state if so provided in the articles or the 1,689
regulations. In the absence of any such provision, all meetings 1,690
shall be held at the principal office of the corporation in this 1,691
state.
Sec. 1702.18. Unless the articles or the regulations 1,700
provide for notice of meetings otherwise than as provided in this 1,701
section, written notice stating the time and place of a meeting 1,702
of the voting members, and, in case of a special meeting, the 1,703
purpose or purposes for which the meeting is called, shall be 1,704
given either by personal delivery or by mail IN THE MANNER
DESCRIBED IN SECTION 1702.02 OF THE REVISED CODE not less than 1,705
ten nor OR NOT more than sixty days before the date of the 1,706
38
meeting: (A) to each member entitled to notice of the meeting; 1,708
(B) by or at the direction of the president or the secretary or 1,709
any other person required or permitted by the regulations to give 1,710
notice or the officers or persons calling the meeting. If
mailed, such notice shall be addressed to the member at his THE 1,711
MEMBER'S address as it appears on the records of the corporation. 1,713
Notice of adjournment of a meeting need not be given if the time 1,714
and place to which it is adjourned are fixed and announced at 1,715
such meeting.
Sec. 1702.19. Notice of the time, place, and purposes of 1,724
any meeting of voting members or trustees DIRECTORS, as the case 1,725
may be, whether required by law, the articles, the regulations, 1,727
or (in the case of trustees DIRECTORS) the bylaws, may be waived 1,729
in writing, either before or after the holding of such meeting,
by any member, or by any trustee DIRECTOR, which writing shall be 1,730
filed with or entered upon the records of the meeting. The 1,732
attendance of any member or any trustee DIRECTOR at any such 1,734
meeting without protesting, prior to or at the commencement of
the meeting, the lack of proper notice shall be deemed to be a 1,735
waiver by him THE MEMBER OR DIRECTOR of notice of such meeting. 1,737
Sec. 1702.21. (A) When any domestic nonprofit corporation 1,746
or domestic BUSINESS corporation for profit holds membership in a 1,748
domestic or foreign corporation, the chairman CHAIRPERSON of the 1,749
board, the president, any vice-president, the secretary, or the 1,751
treasurer of the corporation OR BUSINESS CORPORATION holding such 1,752
membership, and any such officer or cashier or trust officer of a 1,754
banking or trust corporation holding such membership, and any 1,755
like officer of a foreign nonprofit corporation or foreign 1,756
BUSINESS corporation for profit, or of a foreign banking or trust 1,758
corporation, holding membership in a domestic corporation, shall 1,759
conclusively be deemed to have authority to vote on behalf of 1,760
that corporation OR BUSINESS CORPORATION, and to appoint proxies 1,762
and execute written consents, waivers, and releases on its 1,763
behalf, unless, before a vote is taken or a consent, waiver, or 1,764
39
release is acted upon, it appears by a certified copy of the
regulations, the bylaws, or a resolution of the trustees, 1,765
directors, or executive committee of that corporation OR BUSINESS 1,766
CORPORATION that such authority does not exist or is vested in 1,768
some other officer or person. 1,769
(B) WHEN ANY DOMESTIC OR FOREIGN LIMITED LIABILITY COMPANY 1,771
HOLDS MEMBERSHIP IN A DOMESTIC OR FOREIGN CORPORATION, ANY 1,772
MANAGER OR MEMBER OF THE LIMITED LIABILITY COMPANY HOLDING THAT 1,773
MEMBERSHIP SHALL CONCLUSIVELY BE DEEMED TO HAVE AUTHORITY TO VOTE 1,774
ON BEHALF OF THAT LIMITED LIABILITY COMPANY AND TO APPOINT 1,775
PROXIES AND EXECUTE WRITTEN CONSENTS, WAIVERS, AND RELEASES ON 1,776
ITS BEHALF, UNLESS BEFORE A VOTE IS TAKEN OR A CONSENT, WAIVER, 1,777
OR RELEASE IS ACTED UPON, IT APPEARS BY A CERTIFIED COPY OF THE 1,778
ARTICLES OF ORGANIZATION, OPERATING AGREEMENT, OR A RESOLUTION OF 1,779
THE MANAGERS OR THE MEMBERS OF THAT LIMITED LIABILITY COMPANY 1,780
THAT SUCH AUTHORITY DOES NOT EXIST OR IS VESTED IN SOME OTHER 1,781
REPRESENTATIVE OR PERSON. 1,782
(C) For the purpose of this section, a person exercising 1,784
such authority as such AN officer, REPRESENTATIVE, OR OTHER 1,786
PERSON ENTITLED TO VOTE AND ACTING IN THAT CAPACITY is 1,787
prima-facie deemed to be duly elected, qualified, and acting as 1,788
such THAT officer, REPRESENTATIVE, OR OTHER PERSON ENTITLED TO 1,789
VOTE AND ACTING IN THAT CAPACITY. 1,790
Sec. 1702.22. Unless the articles or the regulations 1,799
otherwise provide:
(A) The voting members present IN PERSON OR, IF PERMITTED, 1,801
BY MAIL OR BY PROXY, at any meeting of voting members shall 1,802
constitute a quorum for such meeting, but. THE AFFIRMATIVE VOTE 1,804
OF A MAJORITY OF THE VOTING MEMBERS PRESENT AT A MEETING AT WHICH
A QUORUM IS PRESENT SHALL BE NECESSARY FOR THE AUTHORIZATION OR 1,805
TAKING OF ANY ACTION VOTED UPON BY THE MEMBERS, EXCEPT THAT no 1,806
action required by law, the articles, or the regulations to be 1,808
authorized or taken by a specified proportion or number of the 1,809
voting members or of any class of voting members may be 1,810
40
authorized or taken by a lesser proportion or number;.
(B) The affirmative vote of a majority of the voting 1,812
members present at a meeting at which a quorum is present shall 1,813
be necessary for the authorization or taking of any action voted 1,814
upon by the members;
(C) A majority of the voting members present at a meeting, 1,816
whether or not a quorum is present, may adjourn such meeting from 1,818
time to time.
Sec. 1702.23. Whenever, with respect to the authorization 1,827
or taking of any action by the members or the trustees DIRECTORS, 1,829
the articles or the regulations require the vote, consent, 1,831
waiver, or release of a greater proportion or number of the
members or the trustees DIRECTORS than that otherwise required by 1,833
law with respect thereto, the provisions of the articles or the 1,834
regulations shall control.
Sec. 1702.25. Unless the articles or the regulations 1,843
prohibit the authorization or taking of any action of the 1,844
INCORPORATORS, THE members, or of the trustees DIRECTORS without 1,846
a meeting, any action which THAT may be authorized or taken at a 1,847
meeting of the INCORPORATORS, THE members, or of the trustees 1,848
DIRECTORS, as the case may be, may be authorized or taken without 1,850
a meeting with the affirmative vote or approval of, and in a
writing or writings signed by, all of the INCORPORATORS, ALL OF 1,851
THE members, or all of the trustees DIRECTORS, as the case may 1,853
be, who would be entitled to notice of a meeting for such
purpose, or, in the case of members, such other proportion or 1,854
number of voting members, not less than a majority, as the 1,855
articles or the regulations permit. Any such writing shall be 1,856
filed with or entered upon the records of the corporation. Any 1,857
certificate with respect to the authorization or taking of any
such action which THAT is required to be filed in the office of 1,858
the secretary of state shall recite that the authorization or 1,860
taking of such action was in a writing or writings approved and 1,861
signed as specified in this section.
41
Sec. 1702.26. (A) At a meeting of members at which 1,870
trustees DIRECTORS are to be elected, only persons nominated as 1,872
candidates shall be eligible for election as trustees DIRECTORS. 1,873
(B) At all elections of trustees DIRECTORS the candidates 1,875
receiving the greatest number of votes shall be elected. 1,877
Sec. 1702.27. (A) Except as provided in division (B) of 1,886
this section and section 1702.521 of the Revised Code: 1,887
(1) The number of trustees DIRECTORS as fixed by the 1,889
articles or the regulations shall be not less than three or, if 1,891
not so fixed, the number shall be three, EXCEPT THAT IF THERE ARE 1,892
ONLY ONE OR TWO MEMBERS OF THE CORPORATION, THE NUMBER OF 1,893
DIRECTORS MAY BE LESS THAN THREE BUT NOT LESS THAN THE NUMBER OF
MEMBERS. 1,894
(2) Unless the articles or the regulations fix the number 1,896
of trustees DIRECTORS or provide the manner in which such number 1,898
may be fixed or changed by the voting members, the number may be 1,899
fixed or changed at a meeting of the voting members called for 1,900
the purpose of electing trustees DIRECTORS, by the affirmative 1,901
vote of a majority of the voting members present IN PERSON OR, IF 1,902
PERMITTED, BY MAIL OR BY PROXY, if a quorum is present, but no 1,903
reduction in the number of trustees DIRECTORS shall of itself 1,904
have the effect of shortening the term of any incumbent trustee 1,906
DIRECTOR.
(3) The trustee DIRECTOR shall have such qualifications, 1,908
if any, as are stated in the articles or the regulations. 1,910
(4) The articles or the regulations may provide that 1,912
persons occupying certain positions within or without the 1,913
corporation shall be ex officio trustees DIRECTORS, but, unless 1,914
otherwise provided in the articles or the regulations, such ex 1,916
officio trustees DIRECTORS shall not be considered for quorum 1,917
purposes and shall have no vote. 1,918
(B) The court of common pleas of the county in which the 1,920
corporation maintains its principal office may, pursuant to 1,921
division (A) of section 1702.521 of the Revised Code, order the 1,922
42
appointment of a provisional trustee DIRECTOR for the corporation 1,924
without regard to the number or qualifications of trustees 1,925
DIRECTORS stated in the articles or regulations of the 1,926
corporation.
Sec. 1702.28. (A) Unless the articles or the regulations 1,935
provide for a different term, each trustee DIRECTOR shall hold 1,936
office until the next annual meeting of voting members and until 1,938
his THE DIRECTOR'S successor is elected, or until his THE 1,939
DIRECTOR'S earlier resignation, removal from office, or death. 1,940
(B) The articles or the regulations may provide for the 1,942
classification of trustees DIRECTORS into classes and that the 1,943
terms of office of the several classes need not be uniform. 1,945
Sec. 1702.29. (A) The office of a trustee DIRECTOR 1,954
becomes vacant if he THE DIRECTOR dies or resigns, which 1,957
resignation shall take effect immediately or at such other time
as the trustee DIRECTOR may specify. 1,958
(B) A trustee DIRECTOR may be removed from office pursuant 1,960
to any procedure therefor provided in the articles or in the 1,962
regulations and such removal shall create a vacancy in the board. 1,963
(C) Unless the articles or the regulations otherwise 1,965
provide, the remaining trustees DIRECTORS, though less than a 1,966
majority of the whole authorized number of trustees DIRECTORS, 1,968
may, by the vote of a majority of their number, fill any vacancy 1,969
in the board for the unexpired term. Within the meaning of this 1,970
section, a vacancy exists in case the voting members increase the 1,971
authorized number of trustees DIRECTORS but fail at the meeting 1,972
at which such increase is authorized, or an adjournment thereof, 1,974
to elect the additional trustees DIRECTORS provided for, or in 1,975
case the voting members fail at any time to elect the whole 1,976
authorized number of trustees DIRECTORS. 1,977
Sec. 1702.30. (A) Except where the law, the articles, or 1,986
the regulations require that action be otherwise authorized or 1,987
taken, all of the authority of a corporation shall be exercised 1,988
by or under the direction of its trustees DIRECTORS. For their 1,989
43
own government, the trustees DIRECTORS may adopt bylaws that are 1,991
not inconsistent with the articles or the regulations. 1,992
(B) A trustee DIRECTOR shall perform his THE duties as OF 1,995
a trustee DIRECTOR, including his THE duties as a member of any 1,996
committee of the trustees DIRECTORS upon which he THE DIRECTOR 1,998
may serve, in good faith, in a manner he THE DIRECTOR reasonably 1,999
believes to be in or not opposed to the best interests of the 2,000
corporation, and with the care that an ordinarily prudent person 2,001
in a like position would use under similar circumstances. In 2,002
performing his THE duties OF A DIRECTOR, a trustee DIRECTOR is 2,004
entitled to rely on information, opinions, reports, or 2,006
statements, including financial statements and other financial 2,007
data, that are prepared or presented by the following: 2,008
(1) One or more trustees DIRECTORS, officers, or employees 2,010
of the corporation who the trustee DIRECTOR reasonably believes 2,012
are reliable and competent in the matters prepared or presented; 2,014
(2) Counsel, public accountants, or other persons as to 2,016
matters that the trustee DIRECTOR reasonably believes are within 2,017
the person's professional or expert competence; 2,019
(3) A committee of the trustees DIRECTORS upon which he 2,021
THE DIRECTOR does not serve, duly established in accordance with 2,024
a provision of the articles or the regulations, as to matters 2,025
within its designated authority, which committee the trustee 2,026
DIRECTOR reasonably believes to merit confidence. 2,028
(C) For purposes of division (B) of this section: 2,030
(1) A trustee DIRECTOR shall not be found to have failed 2,032
to perform his THE DIRECTOR'S duties in accordance with that 2,034
division, unless it is proved, by clear and convincing evidence, 2,036
in an action brought against the trustee DIRECTOR that he THE 2,037
DIRECTOR has not acted in good faith, in a manner he THE DIRECTOR 2,039
reasonably believes to be in or not opposed to the best interests 2,040
of the corporation, or with the care that an ordinarily prudent 2,041
person in a like position would use under similar circumstances. 2,042
Such an action includes, but is not limited to, an action that 2,043
44
involves or affects any of the following: 2,044
(a) A change or potential change in control of the 2,046
corporation; 2,047
(b) A termination or potential termination of his THE 2,049
DIRECTOR'S service to the corporation as a trustee DIRECTOR; 2,052
(c) His THE DIRECTOR'S service in any other position or 2,054
relationship with the corporation. 2,056
(2) A trustee DIRECTOR shall not be considered to be 2,058
acting in good faith if he THE DIRECTOR has knowledge concerning 2,060
the matter in question that would cause reliance on information, 2,062
opinions, reports, or statements that are prepared or presented 2,063
by the persons described in divisions (B)(1) to (3) of this 2,064
section, to be unwarranted. 2,065
(3) The provisions of this division do not limit relief 2,067
available under section 1702.301 of the Revised Code. 2,068
(D)(1) Subject to divisions (D)(2) and (3) of this 2,070
section, a trustee DIRECTOR is liable in damages for any act that 2,072
he THE DIRECTOR takes or fails to take as trustee DIRECTOR only 2,074
if it is proved, by clear and convincing evidence, in a court 2,076
with jurisdiction that the act or omission of the trustee 2,077
DIRECTOR was one undertaken with a deliberate intent to cause 2,079
injury to the corporation or was one undertaken with a reckless 2,080
disregard for the best interests of the corporation. 2,081
(2) Division (D)(1) of this section does not affect the 2,083
liability of a trustee DIRECTOR under section 1702.55 of the 2,084
Revised Code. 2,085
(3) Subject to division (D)(2) of this section, division 2,087
(D)(1) of this section does not apply if, and only to the extent 2,088
that, at the time of an act or omission of a trustee DIRECTOR 2,089
that is the subject of complaint, the articles or the regulations 2,091
of the corporation state, by specific reference to that division, 2,092
that its provisions do not apply to the corporation. 2,093
(E) For purposes of this section, in determining what he A 2,095
DIRECTOR reasonably believes to be in or not opposed to the best 2,097
45
interests of the corporation, a trustee DIRECTOR shall consider 2,098
the purposes of the corporation and may consider any of the 2,100
following:
(1) The interests of the employees, suppliers, creditors, 2,102
and customers of the corporation; 2,103
(2) The economy of this state and of the nation; 2,105
(3) Community and societal considerations; 2,107
(4) The long-term and short-term best interests of the 2,109
corporation, including, but not limited to, the possibility that 2,110
those interests may be best served by the continued independence 2,111
of the corporation. 2,112
(F) Divisions (C) and (D) of this section do not affect 2,114
the duties of a trustee DIRECTOR who acts in any capacity other 2,115
than in his THE capacity as a trustee DIRECTOR. 2,117
Sec. 1702.301. (A) Unless otherwise provided in the 2,127
articles or the regulations: 2,128
(1) No contract, action, or transaction is void or 2,130
voidable with respect to a corporation because the contract, 2,131
action, or transaction is between or affects the corporation and 2,132
one or more of its trustees DIRECTORS or officers, or is between 2,133
or affects the corporation and any other person in which one or 2,135
more of the corporation's trustees DIRECTORS or officers are 2,136
directors, trustees, or officers, or in which one or more of the 2,138
corporation's trustees DIRECTORS or officers have a financial or 2,140
personal interest, or because one or more interested trustees 2,141
DIRECTORS or officers participate in or vote at the meeting of 2,143
the trustees DIRECTORS or a committee of the trustees DIRECTORS 2,145
that authorizes the contract, action, or transaction, if any of 2,146
the following applies: 2,147
(a) The material facts as to his or their THE DIRECTOR'S 2,149
relationship or interest and as to the contract, action, or 2,151
transaction are disclosed or are known to the trustees DIRECTORS 2,152
or the committee, and the trustees DIRECTORS or committee, in 2,154
good faith reasonably justified by the material facts, authorizes 2,156
46
the contract, action, or transaction by the affirmative vote of a 2,157
majority of the disinterested trustees DIRECTORS, even though the 2,158
disinterested trustees DIRECTORS constitute less than a quorum of 2,160
the trustees DIRECTORS or the committee;
(b) The material facts as to his or their THE DIRECTOR'S 2,162
relationship or interest and as to the contract, action, or 2,164
transaction are disclosed or are known to the members entitled to 2,165
vote on the contract, action, or transaction, and the contract, 2,166
action, or transaction is specifically approved at a meeting of 2,167
the members held for the purpose of voting on the contract, 2,168
action, or transaction, by the affirmative vote of a majority of 2,169
the voting members of the corporation who are not interested in 2,170
the contract, action, or transaction; 2,171
(c) The contract, action, or transaction is fair as to the 2,173
corporation as of the time it is authorized or approved by the 2,174
trustees DIRECTORS, a committee of the trustees DIRECTORS, or the 2,176
members.
(2) Common or interested trustees DIRECTORS may be counted 2,178
in determining the presence of a quorum at a meeting of the 2,179
trustees DIRECTORS, or of a committee of the trustees DIRECTORS, 2,181
that authorizes such a contract, action, or transaction. 2,182
(3) The trustees DIRECTORS, by the affirmative vote of a 2,184
majority of those in office, and irrespective of any financial or 2,186
personal interest of any of the trustees DIRECTORS, shall have 2,187
authority to establish reasonable compensation, which may include 2,189
pension, disability, and death benefits, for services to the 2,190
corporation by trustees DIRECTORS and officers, or to delegate 2,191
that authority to establish reasonable compensation to one or 2,193
more officers or trustees DIRECTORS. 2,194
(B) Divisions (A)(1) and (2) of this section do not limit 2,196
or otherwise affect the liability of trustees DIRECTORS under 2,197
section 1702.55 of the Revised Code. 2,199
(C) For purposes of division (A) of this section, a 2,201
trustee DIRECTOR is not an interested trustee DIRECTOR solely 2,203
47
because the subject of a contract, action, or transaction may 2,204
involve or effect a change in control of the corporation or his 2,205
THE DIRECTOR'S continuation in office as a trustee DIRECTOR of 2,207
the corporation.
(D) For purposes of this section, "action" means a 2,209
resolution that is adopted by the trustees DIRECTORS or a 2,210
committee of the trustees DIRECTORS. 2,212
Sec. 1702.31. Unless otherwise provided in the articles, 2,221
regulations, or bylaws, and subject to the exceptions applicable 2,222
during an emergency for which provision is made in division (G) 2,223
of section 1702.11 of the Revised Code: 2,224
(A) Meetings of the trustees DIRECTORS may be called by 2,226
the chairman CHAIRPERSON of the board, the president, any 2,229
vice-president, or any two trustees DIRECTORS; 2,230
(B) Meetings of the trustees DIRECTORS may be held at any 2,232
place within or without the state and, unless the articles or 2,233
regulations prohibit participation by trustees DIRECTORS at a 2,234
meeting by means of communications equipment, meetings of the 2,236
trustees DIRECTORS may be held through any communications 2,238
equipment if all persons participating can hear each other and 2,239
participation in a meeting pursuant to this division shall 2,240
constitute presence at such meeting; 2,241
(C) Written notice of the time and place of each meeting 2,243
of the trustees DIRECTORS shall be given to each trustee DIRECTOR 2,245
either by personal delivery or by mail, telegram, or cablegram at 2,246
least two days before the meeting, which notice need not specify 2,247
the purposes of the meeting; 2,248
(D) Notice of adjournment of a meeting need not be given 2,250
if the time and place to which it is adjourned are fixed and 2,251
announced at such meeting. 2,252
Sec. 1702.32. Unless the articles or the regulations 2,261
otherwise provide, and subject to the exceptions applicable 2,262
during an emergency for which provision is made in division (G) 2,263
in OF section 1702.11 of the Revised Code, a majority of the 2,265
48
whole authorized number of trustees DIRECTORS is necessary to 2,266
constitute a quorum for a meeting of the trustees DIRECTORS, 2,267
except that a majority of the trustees DIRECTORS in office 2,269
constitutes a quorum for filling a vacancy in the board. The act
of a majority of the trustees DIRECTORS present at a meeting at 2,270
which a quorum is present is the act of the board, unless the act 2,272
of a greater number is required by the articles, the regulations, 2,273
or the bylaws.
Sec. 1702.33. (A) The regulations may provide for the 2,282
creation by the trustees DIRECTORS of an executive committee or 2,283
any other committee of the trustees DIRECTORS, to consist of not 2,285
less than three trustees ONE OR MORE DIRECTORS, and may authorize 2,287
the delegation to any such committee of any of the authority of 2,289
the trustees DIRECTORS, however conferred. 2,290
(B) The trustees DIRECTORS may appoint one or more 2,292
trustees DIRECTORS as alternate members of any such committee, 2,294
who may take the place of any absent member or members at any 2,295
meeting of the particular committee. 2,296
(C) Each such committee shall serve at the pleasure of the 2,298
trustees DIRECTORS, shall act only in the intervals between 2,299
meetings of the trustees DIRECTORS, and shall be subject to the 2,301
control and direction of the trustees DIRECTORS. 2,303
(D) Unless otherwise provided in the regulations or 2,305
ordered by the trustees DIRECTORS, any such committee may act by 2,306
a majority of its members at a meeting or by a writing or 2,308
writings signed by all of its members. 2,309
(E) Unless participation by members of any such committee 2,311
at a meeting by means of communications equipment is prohibited 2,312
by the articles, the regulations, or an order of the trustees 2,313
DIRECTORS, meetings of the particular committee may be held 2,315
through any communications equipment if all persons participating 2,316
can hear each other. Participation in a meeting pursuant to this 2,317
division constitutes presence at the meeting. 2,318
(F) An act or authorization of an act by any such 2,320
49
committee within the authority delegated to it shall be as 2,321
effective for all purposes as the act or authorization of the 2,322
trustees DIRECTORS. 2,323
Sec. 1702.34. (A) The officers of a corporation shall 2,332
consist of a president, a secretary, a treasurer, and, if 2,333
desired, a chairman CHAIRPERSON of the board, one or more 2,334
vice-presidents, and such other officers and assistant officers 2,336
as may be deemed necessary, each of whom may be designated by 2,337
such other titles as may be provided in the articles, the 2,338
regulations, the bylaws, or resolutions of the trustees 2,339
DIRECTORS. Unless the articles or the regulations otherwise 2,341
provide, none of the officers need be a trustee DIRECTOR. Any 2,342
two or more offices may be held by the same person. The officers 2,344
shall be elected or appointed at such time, in such manner, and 2,345
for such terms as may be prescribed in the articles or the 2,346
regulations. In the absence of any such provision, all officers 2,347
shall be elected annually by the trustees DIRECTORS.
(B) Unless the articles or the regulations otherwise 2,349
provide, and subject to the exceptions applicable during an 2,350
emergency for which provision is made in division (G) of section 2,351
1702.11 of the Revised Code: 2,352
(1) All officers, as between themselves and the 2,354
corporation, shall respectively have such authority and perform 2,355
such duties as are determined by the persons authorized to elect 2,356
or appoint them; 2,357
(2) Any officer may be removed, with or without cause, by 2,359
the persons authorized to elect or appoint him THE OFFICER 2,360
without prejudice to the contract rights of such officer. The 2,362
election or appointment of an officer for a given term, or a 2,363
general provision in the articles, the regulations, or the bylaws 2,364
with respect to term of office, shall not be deemed to create 2,365
contract rights; 2,366
(3) The persons authorized to elect or appoint officers 2,368
may fill any vacancy in any office occurring from whatever 2,369
50
reason. 2,370
Sec. 1702.36. The trustees DIRECTORS may authorize any 2,379
mortgage, pledge, or deed of trust of all or any of the property 2,381
of the corporation of any description, or any interest therein, 2,382
for the purpose of securing the payment or performance of any 2,383
obligation or contract. Unless the articles or the regulations,
or the terms of any trust on which the corporation holds any 2,384
particular property, otherwise provide, no vote or consent of 2,385
members or authorization from the court under section 1715.39 of 2,386
the Revised Code is necessary for such action.
Sec. 1702.38. (A) The articles may be amended from time 2,395
to time in any respect if the articles as amended set forth all 2,396
such provisions as are required in, and only such provisions as 2,397
may properly be in, original articles filed at the time of 2,398
adopting the amendment, other than with respect to the initial 2,399
trustees; provided DIRECTORS, EXCEPT that a charitable PUBLIC 2,401
BENEFIT corporation shall not amend its articles in such manner 2,402
that it will cease to be a charitable PUBLIC BENEFIT corporation. 2,403
(B) Without limiting the generality of such authority, the 2,405
articles may be amended to: 2,406
(1) Change the name of the corporation; 2,408
(2) Change the place in this state where its principal 2,410
office is to be located; 2,411
(3) Change, enlarge, or diminish its purpose or purposes; 2,413
(4) Change any provision of the articles or add any 2,415
provision that may properly be included therein. 2,416
(C) The voting members PRESENT IN PERSON OR, IF PERMITTED, 2,418
BY MAIL OR BY PROXY, at a meeting held for such purpose may adopt 2,420
an amendment by the affirmative vote of a majority of the voting 2,421
members present if a quorum is present, or, if the articles or 2,422
the regulations provide or permit, by the affirmative vote of a 2,423
greater or lesser proportion or number of the voting members, and 2,424
by such affirmative vote of the voting members of any particular 2,425
class as is required by the articles or the regulations. 2,426
51
(D) In addition to or in lieu of adopting an amendment to 2,428
the articles, the voting members may adopt amended articles by 2,429
the same action or vote as that required to adopt the amendment. 2,430
(E) The trustees DIRECTORS may adopt amended articles to 2,432
consolidate the original articles and all previously adopted 2,434
amendments to the articles that are in force at the time, or the 2,435
voting members at a meeting held for such purpose may adopt such 2,436
amended articles by the same vote as that required to adopt an 2,437
amendment.
(F) Amended articles shall set forth all such provisions 2,439
as are required in, and only such provisions as may properly be 2,440
in, original articles filed at the time of adopting the amended 2,441
articles, other than with respect to the initial trustees 2,442
DIRECTORS, and shall contain a statement that they supersede the 2,444
existing articles. 2,445
(G) Upon the adoption of any amendment or amended 2,447
articles, a certificate containing a copy of the resolution 2,448
adopting the amendment or amended articles, a statement of the 2,449
manner of its adoption, and, in the case of adoption of the 2,450
resolution by the trustees DIRECTORS, a statement of the basis 2,451
for such adoption, shall be filed with the secretary of state, 2,453
and thereupon the articles shall be amended accordingly, and the 2,454
amended articles shall supersede the existing articles. The 2,455
certificate shall be signed by any authorized officer of the 2,456
corporation. 2,457
(H) A copy of an amendment or amended articles changing 2,459
the name of a corporation or its principal office in this state, 2,460
certified by the secretary of state, may be filed for record in 2,461
the office of the county recorder of any county in this state, 2,462
and for such recording the county recorder shall charge and 2,463
collect the same fee as provided for in division (A) of section 2,464
317.32 of the Revised Code. Such copy shall be recorded in the 2,465
records of deeds. 2,466
Sec. 1702.39. (A) Unless the articles or the regulations, 2,475
52
or the terms of any trust on which the corporation holds any 2,476
particular property, otherwise provide, a lease, sale, exchange, 2,477
transfer, or other disposition of any assets of a MUTUAL BENEFIT 2,478
corporation may be made without the necessity of procuring 2,479
authorization from the court under section 1715.39 of the Revised 2,480
Code, upon such terms and for such consideration, which may 2,481
consist, in whole or in part, of money or other property, 2,482
including shares or other securities or promissory obligations of 2,483
any BUSINESS corporation for profit, domestic or foreign, as may 2,484
be authorized by the trustees; provided DIRECTORS, EXCEPT that a 2,485
lease, sale, exchange, transfer, or other disposition of all, or 2,487
substantially all, the assets may be made only when such 2,488
transaction is also authorized (either before or after
authorization by the trustees DIRECTORS) by the voting members 2,489
PRESENT IN PERSON OR, IF PERMITTED, BY PROXY, at a meeting held 2,490
for such purpose, by the affirmative vote of a majority of the 2,492
voting members present if a quorum is present, or, if the 2,493
articles or the regulations provide or permit, by the affirmative 2,494
vote of a greater or lesser proportion or number of the voting
members, and by such affirmative vote of the voting members of 2,495
any particular class as is required by the articles or the 2,496
regulations. Notice of the meeting of the members shall be given 2,497
to all members whether or not entitled to vote thereat. Such 2,499
notice shall be accompanied by a copy or summary of the terms of 2,500
such transaction.
(B)(1) A PUBLIC BENEFIT CORPORATION MAY NOT DISPOSE OF ITS 2,503
ASSETS WITH VALUE EQUAL TO MORE THAN FIFTY PER CENT OF THE FAIR 2,504
MARKET VALUE OF THE NET TANGIBLE AND INTANGIBLE ASSETS, INCLUDING 2,505
GOODWILL, OF THE CORPORATION OVER A PERIOD OF TWENTY-FOUR 2,506
CONSECUTIVE MONTHS IN A TRANSACTION OR SERIES OF TRANSACTIONS, 2,507
INCLUDING THE LEASE, SALE, EXCHANGE, TRANSFER, OR OTHER 2,509
DISPOSITION OF THOSE ASSETS, THAT ARE OUTSIDE THE ORDINARY COURSE 2,510
OF ITS BUSINESS OR THAT ARE NOT IN ACCORDANCE WITH THE PURPOSE OR 2,511
PURPOSES FOR WHICH THE CORPORATION WAS ORGANIZED, AS SET FORTH IN 2,513
53
ITS ARTICLES OR THE TERMS OF ANY TRUST ON WHICH THE CORPORATION 2,514
HOLDS SUCH ASSETS, UNLESS ONE OR MORE OF THE FOLLOWING APPLY: 2,515
(a) THE TRANSACTION HAS RECEIVED THE PRIOR APPROVAL OF THE 2,517
COURT OF COMMON PLEAS OF THE COUNTY IN THIS STATE IN WHICH THE 2,518
PRINCIPAL OFFICE OF THE CORPORATION IS LOCATED, IN A PROCEEDING 2,519
OF WHICH THE ATTORNEY GENERAL HAS BEEN GIVEN WRITTEN NOTICE BY 2,521
CERTIFIED MAIL WITHIN THREE DAYS OF THE INITIATION OF THE
PROCEEDING, AND IN WHICH PROCEEDING THE ATTORNEY GENERAL MAY 2,522
INTERVENE AS OF RIGHT.
(b) THE CORPORATION HAS PROVIDED WRITTEN NOTICE OF THE 2,524
PROPOSED TRANSACTION, INCLUDING A COPY OR SUMMARY OF THE TERMS OF 2,525
SUCH TRANSACTION, AT LEAST TWENTY DAYS BEFORE CONSUMMATION OF THE 2,526
LEASE, SALE, EXCHANGE, TRANSFER, OR OTHER DISPOSITION OF THE 2,527
ASSETS, TO THE ATTORNEY GENERAL AND TO THE MEMBERS OF THE 2,528
CORPORATION, AND THE PROPOSED TRANSACTION HAS BEEN APPROVED BY 2,529
THE VOTING MEMBERS PRESENT IN PERSON OR, IF PERMITTED, BY PROXY, 2,530
AT A MEETING HELD FOR SUCH PURPOSE, BY THE AFFIRMATIVE VOTE OF A 2,532
MAJORITY OF THE VOTING MEMBERS PRESENT IF A QUORUM IS PRESENT, 2,533
OR, IF THE ARTICLES OR REGULATIONS PROVIDE OR PERMIT, BY THE 2,534
AFFIRMATIVE VOTE OF A GREATER OR LESSER PROPORTION OR NUMBER OF
THE VOTING MEMBERS, AND IF THE ARTICLES OR REGULATIONS REQUIRE, 2,536
BY THE AFFIRMATIVE VOTE OF THE VOTING MEMBERS OF ANY PARTICULAR 2,537
CLASS.
(c) THE TRANSACTION IS IN ACCORDANCE WITH THE PURPOSE OR 2,539
PURPOSES FOR WHICH THE CORPORATION WAS ORGANIZED, AS SET FORTH IN 2,540
ITS ARTICLES OR THE TERMS OF ANY TRUST ON WHICH THE CORPORATION 2,541
HOLDS THE ASSETS, AND THE LESSEE, PURCHASER, OR TRANSFEREE OF THE 2,542
ASSETS IS ALSO A PUBLIC BENEFIT CORPORATION OR A FOREIGN 2,543
CORPORATION THAT WOULD QUALIFY UNDER THE REVISED CODE AS A PUBLIC 2,545
BENEFIT CORPORATION. 2,546
(2) THE ATTORNEY GENERAL MAY REQUIRE, PURSUANT TO SECTION 2,548
109.24 OF THE REVISED CODE, THE PRODUCTION OF THE DOCUMENTS 2,549
NECESSARY FOR REVIEW OF A PROPOSED TRANSACTION UNDER DIVISION 2,551
(B)(1) OF THIS SECTION. THE ATTORNEY GENERAL MAY RETAIN, AT THE 2,552
54
EXPENSE OF THE PUBLIC BENEFIT CORPORATION, ONE OR MORE EXPERTS, 2,554
INCLUDING AN INVESTMENT BANKER, ACTUARY, APPRAISER, CERTIFIED
PUBLIC ACCOUNTANT, OR OTHER EXPERT, THAT THE ATTORNEY GENERAL 2,556
CONSIDERS REASONABLY NECESSARY TO PROVIDE ASSISTANCE IN REVIEWING 2,557
A PROPOSED TRANSACTION UNDER DIVISION (B)(1) OF THIS SECTION. 2,558
(C) THE ATTORNEY GENERAL MAY INSTITUTE A CIVIL ACTION TO 2,560
ENFORCE THE REQUIREMENTS OF DIVISION (B)(1) OF THIS SECTION IN 2,561
THE COURT OF COMMON PLEAS OF THE COUNTY IN THIS STATE IN WHICH 2,562
THE PRINCIPAL OFFICE OF THE CORPORATION IS LOCATED OR IN THE 2,564
FRANKLIN COUNTY COURT OF COMMON PLEAS. IN ADDITION TO ANY CIVIL 2,568
REMEDIES THAT MAY EXIST UNDER COMMON LAW OR THE REVISED CODE, A 2,570
COURT MAY RESCIND THE TRANSACTION OR GRANT INJUNCTIVE RELIEF OR 2,571
IMPOSE ANY COMBINATION OF THESE REMEDIES. 2,572
(D) The corporation by its trustees DIRECTORS may abandon 2,575
the proposed lease, sale, exchange, transfer, or other 2,577
disposition of all or substantially all of the assets of the 2,579
corporation PURSUANT TO DIVISION (A) OR (B) OF THIS SECTION, 2,580
subject to the contract rights of other persons, if such power of 2,581
abandonment is conferred upon the trustees DIRECTORS either by 2,582
the terms of the transaction or by the same vote of voting 2,583
members and at the same meeting of members as that referred to in 2,584
division (A) OR (B) of this section, AS APPLICABLE, or at any 2,586
subsequent meeting.
(C)(E) An action to set aside a conveyance by a 2,588
corporation, on the ground that any section of the Revised Code 2,590
applicable to the lease, sale, exchange, transfer, or other 2,591
disposition of all or substantially all the assets of such 2,592
corporation has not been complied with, shall be brought within 2,593
ninety days ONE YEAR after such transaction, or such THE action 2,595
shall be forever barred. 2,596
Sec. 1702.41. (A)(1) Any two or more corporations may 2,605
merge into a single corporation which shall be one of the 2,606
constituent corporations, or may consolidate into a single 2,607
corporation which shall be a new corporation to be formed by the 2,608
55
consolidation; except that a charitable corporation may merge 2,609
into or may consolidate with other charitable corporations only, 2,610
and the surviving or new corporation, as the case may be, must be 2,611
a charitable corporation. 2,612
(B)(2) To effect such merger or consolidation, the 2,614
trustees DIRECTORS of each constituent corporation shall approve 2,616
an agreement of merger or consolidation to be signed by the 2,617
chairman CHAIRPERSON of the board, THE president, or a 2,619
vice-president, and by the secretary or an assistant secretary, 2,621
which agreement shall set forth:
(1)(a) That the named constituent corporations have agreed 2,623
to merge into a specified constituent corporation, herein 2,624
designated the surviving corporation, or that the named 2,625
constituent corporations have agreed to consolidate into a new 2,626
corporation to be formed by the consolidation, herein designated 2,627
the new corporation; 2,628
(2)(b) The name of the surviving or new corporation, which 2,630
may be the same as or similar to that of any constituent 2,631
corporation; 2,632
(3)(c) The place in this state where the principal office 2,634
of the surviving or new corporation is to be located; 2,635
(4) The purpose or purposes of the surviving or new 2,637
corporation which, in case the constituent corporations are 2,638
charitable corporations, must be such that the surviving or new 2,639
corporation will also be a charitable corporation; 2,640
(5)(d) The names and addresses of the first trustees 2,642
DIRECTORS and officers of the surviving or new corporation, and, 2,644
if desired, their term or terms of office; 2,645
(6)(e) The name and address of the statutory agent upon 2,647
whom any process, notice, or demand against any constituent 2,648
corporation or the surviving or new corporation may be served; 2,649
(7)(f) The terms of the merger or consolidation and the 2,651
mode of carrying the same into effect; 2,652
(8)(g) The regulations of the surviving or new corporation 2,654
56
or a provision to the effect that the regulations of one of the 2,655
constituent corporations shall be the regulations of the 2,656
surviving or new corporation or to the effect that the voting 2,657
members or the trustees DIRECTORS of the surviving or new 2,658
corporation may adopt regulations, or any combination thereof. 2,660
(C)(3) The agreement may also set forth: 2,662
(1)(a) The specification of a date, which may be the date 2,664
of the filing of the agreement or a date subsequent thereto, upon 2,665
which the merger or consolidation shall become effective; 2,666
(2)(b) A provision conferring upon the trustees DIRECTORS 2,669
of one or more of the constituent corporations the power to 2,670
abandon the merger or consolidation prior to the filing of the 2,671
agreement;
(3)(c) Any additional provision permitted to be included 2,673
in the articles of a newly formed corporation; 2,674
(4)(d) Any additional provision deemed necessary or 2,676
desirable with respect to the proposed merger or consolidation. 2,677
(B)(1) WITHOUT THE PRIOR APPROVAL OF THE COURT OF COMMON 2,679
PLEAS OF THE COUNTY IN THIS STATE IN WHICH THE PRINCIPAL OFFICE 2,680
OF THE CORPORATION IS LOCATED, IN A PROCEEDING OF WHICH THE 2,681
ATTORNEY GENERAL HAS BEEN GIVEN WRITTEN NOTICE BY CERTIFIED MAIL 2,683
WITHIN THREE DAYS OF THE INITIATION OF THE PROCEEDING, AND IN 2,684
WHICH PROCEEDING THE ATTORNEY GENERAL MAY INTERVENE AS OF RIGHT,
A PUBLIC BENEFIT CORPORATION MAY MERGE OR CONSOLIDATE ONLY WITH 2,685
ANY OF THE FOLLOWING: 2,686
(a) A PUBLIC BENEFIT CORPORATION; 2,688
(b) A FOREIGN CORPORATION THAT WOULD QUALIFY UNDER THE 2,691
REVISED CODE AS A PUBLIC BENEFIT CORPORATION;
(c) A MUTUAL BENEFIT CORPORATION OR A BUSINESS 2,693
CORPORATION, PROVIDED THAT THE PUBLIC BENEFIT CORPORATION IS THE 2,694
SURVIVING CORPORATION IN THE CASE OF A MERGER AND CONTINUES TO BE 2,695
A PUBLIC BENEFIT CORPORATION OR THAT A PUBLIC BENEFIT CORPORATION 2,696
IS THE NEW CORPORATION IN THE CASE OF A CONSOLIDATION; 2,697
(d) A BUSINESS CORPORATION OR MUTUAL BENEFIT CORPORATION, 2,699
57
PROVIDED THAT ALL OF THE FOLLOWING APPLY: 2,700
(i) ON OR PRIOR TO THE EFFECTIVE DATE OF THE MERGER OR 2,702
CONSOLIDATION, ASSETS WITH A VALUE EQUAL TO THE GREATER OF THE 2,704
FAIR MARKET VALUE OF THE NET TANGIBLE AND INTANGIBLE ASSETS, 2,705
INCLUDING GOODWILL, OF THE PUBLIC BENEFIT CORPORATION OR THE FAIR 2,706
MARKET VALUE OF THE PUBLIC BENEFIT CORPORATION IF IT IS TO BE
OPERATED AS A BUSINESS CONCERN, ARE TRANSFERRED OR CONVEYED TO 2,707
ONE OR MORE PERSONS THAT WOULD HAVE RECEIVED ITS ASSETS UNDER 2,708
SECTION 1702.49 OF THE REVISED CODE HAD IT VOLUNTARILY DISSOLVED. 2,709
(ii) IT RETURNS, TRANSFERS, OR CONVEYS ANY ASSETS HELD BY 2,711
IT UPON A CONDITION REQUIRING RETURN, TRANSFER, OR CONVEYANCE, 2,712
WHICH CONDITION OCCURS BY REASON OF THE MERGER OR CONSOLIDATION, 2,713
IN ACCORDANCE WITH THAT CONDITION.
(iii) THE MERGER OR CONSOLIDATION IS APPROVED BY A 2,715
MAJORITY OF DIRECTORS OF THE PUBLIC BENEFIT CORPORATION WHO WILL 2,717
NOT RECEIVE ANY FINANCIAL OR OTHER BENEFIT, DIRECTLY OR 2,718
INDIRECTLY, AS A RESULT OF THE MERGER OR CONSOLIDATION OR BY 2,719
AGREEMENT, AND WHO ARE NOT AND WILL NOT AS A RESULT OF THE MERGER 2,720
OR CONSOLIDATION BECOME MEMBERS OF, SHAREHOLDERS IN, OR OFFICERS, 2,722
EMPLOYEES, AGENTS, OR CONSULTANTS OF THE SURVIVING OR NEW 2,723
BUSINESS CORPORATION OR MUTUAL BENEFIT CORPORATION.
(2) AT LEAST TWENTY DAYS BEFORE CONSUMMATION OF ANY MERGER 2,725
OR CONSOLIDATION OF A PUBLIC BENEFIT CORPORATION PURSUANT TO 2,726
DIVISION (B)(1)(d) OF THIS SECTION, WRITTEN NOTICE, INCLUDING A 2,727
COPY OF THE PROPOSED PLAN OF MERGER OR CONSOLIDATION, SHALL BE 2,729
DELIVERED TO THE ATTORNEY GENERAL. THE ATTORNEY GENERAL MAY 2,730
REVIEW A PROPOSED MERGER OR CONSOLIDATION OF A PUBLIC BENEFIT 2,731
CORPORATION UNDER DIVISION (B) (1) (d) OF THIS SECTION. THE 2,732
ATTORNEY GENERAL MAY REQUIRE, PURSUANT TO SECTION 109.24 OF THE 2,735
REVISED CODE, THE PRODUCTION OF THE DOCUMENTS NECESSARY FOR
REVIEW OF A PROPOSED MERGER OR CONSOLIDATION UNDER DIVISION 2,737
(B)(1)(d) OF THIS SECTION. THE ATTORNEY GENERAL MAY RETAIN, AT 2,738
THE EXPENSE OF THE PUBLIC BENEFIT CORPORATION, ONE OR MORE
EXPERTS, INCLUDING AN INVESTMENT BANKER, ACTUARY, APPRAISER, 2,739
58
CERTIFIED PUBLIC ACCOUNTANT, OR OTHER EXPERT, THAT THE ATTORNEY 2,740
GENERAL CONSIDERS REASONABLY NECESSARY TO PROVIDE ASSISTANCE IN 2,741
REVIEWING A PROPOSED MERGER OR CONSOLIDATION UNDER DIVISION 2,742
(B)(1)(d) OF THIS SECTION. THE ATTORNEY GENERAL MAY EXTEND THE 2,743
DATE OF ANY MERGER OR CONSOLIDATION OF A PUBLIC BENEFIT 2,744
CORPORATION UNDER DIVISION (B) (1) (d) OF THIS SECTION FOR A 2,745
PERIOD NOT TO EXCEED SIXTY DAYS AND SHALL PROVIDE NOTICE OF THAT 2,747
EXTENSION TO THE PUBLIC BENEFIT CORPORATION. THE NOTICE SHALL 2,748
SET FORTH THE REASONS NECESSITATING THE EXTENSION.
(3) WITHOUT THE PRIOR WRITTEN CONSENT OF THE ATTORNEY 2,750
GENERAL OR OF THE COURT OF COMMON PLEAS OF THE COUNTY IN THIS 2,751
STATE IN WHICH THE PRINCIPAL OFFICE OF THE CORPORATION IS 2,752
LOCATED, IN A PROCEEDING IN WHICH THE ATTORNEY GENERAL HAS BEEN 2,753
GIVEN WRITTEN NOTICE BY CERTIFIED MAIL WITHIN THREE DAYS OF THE 2,754
INITIATION OF THE PROCEEDING, AND IN WHICH PROCEEDING THE 2,755
ATTORNEY GENERAL MAY INTERVENE AS OF RIGHT, NO MEMBER OR DIRECTOR 2,756
OF A PUBLIC BENEFIT CORPORATION IN THAT PERSON'S CAPACITY AS A 2,758
MEMBER OR DIRECTOR MAY RECEIVE OR KEEP ANYTHING AS A RESULT OF A 2,760
MERGER OF CONSOLIDATION OTHER THAN MEMBERSHIP OR DIRECTORSHIP IN
THE SURVIVING OR NEW PUBLIC BENEFIT CORPORATION. THE COURT SHALL 2,763
APPROVE THE TRANSACTION IF IT IS IN THE PUBLIC INTEREST.
(4) THE ATTORNEY GENERAL MAY INSTITUTE A CIVIL ACTION TO 2,765
ENFORCE THE REQUIREMENTS OF DIVISIONS (B)(1), (2), AND (3) OF 2,766
THIS SECTION IN THE COURT OF COMMON PLEAS OF THE COUNTY IN THIS 2,768
STATE IN WHICH THE PRINCIPAL OFFICE OF THE CORPORATION IS LOCATED 2,769
OR IN THE FRANKLIN COUNTY COURT OF COMMON PLEAS. IN ADDITION TO 2,770
ANY CIVIL REMEDIES THAT MAY EXIST UNDER COMMON LAW OR THE REVISED 2,771
CODE, A COURT MAY RESCIND THE TRANSACTION OR GRANT INJUNCTIVE 2,772
RELIEF OR IMPOSE ANY COMBINATION OF THESE REMEDIES.
(C) A CORPORATION MAY BE THE SURVIVING OR NEW ENTITY IN A 2,774
MERGER OR CONSOLIDATION WITH ONE OR MORE BUSINESS CORPORATIONS, 2,776
OR A CORPORATION MAY MERGE OR CONSOLIDATE INTO ONE OR MORE 2,777
BUSINESS CORPORATIONS WITH A BUSINESS CORPORATION, A MUTUAL 2,778
BENEFIT CORPORATION, OR A FOREIGN CORPORATION AS THE SURVIVING OR 2,779
59
NEW ENTITY, PROVIDED THAT THE CORPORATION COMPLIES WITH THE 2,780
PROVISIONS OF THIS SECTION AND SECTIONS 1702.42 AND 1702.43 OF 2,781
THE REVISED CODE, AS APPLICABLE TO THE CORPORATION, AND THAT THE 2,783
BUSINESS CORPORATION COMPLIES WITH THE PROVISIONS OF SECTION 2,784
1701.781 OR 1701.791 OF THE REVISED CODE, AS APPLICABLE TO THE 2,785
BUSINESS CORPORATION. 2,786
Sec. 1702.42. (A) The trustees DIRECTORS of each 2,795
constituent corporation, upon approving such AN agreement of 2,797
merger or consolidation, shall direct that the agreement be 2,799
submitted to the voting members entitled to vote on it at a
meeting of voting members of such corporation held for such THAT 2,800
purpose, and notice of such meeting shall be given to all members 2,802
of such constituent corporation whether or not entitled to vote 2,803
thereat. The notice shall be accompanied by a copy or summary of 2,805
the agreement.
(B) At each such meeting, a vote of the members shall be 2,807
taken on the proposed agreement. In order to be adopted, the 2,808
agreement (including any amendments or additions thereto proposed 2,809
at each such meeting) must receive the affirmative vote of a 2,810
majority of the voting members of each constituent corporation 2,811
present IN PERSON OR, IF PERMITTED, BY MAIL OR BY PROXY, at each 2,812
such meeting if a quorum is present, or, if the articles or the 2,813
regulations of such corporation provide or permit, the
affirmative vote of a greater or lesser proportion or number of 2,814
the voting members, and such affirmative vote of the voting 2,815
members of any particular class as is required by the articles or 2,816
the regulations of such corporation. If the agreement would 2,817
authorize any particular corporate action which THAT, under any 2,819
applicable provision of law or under the existing articles of one
or more of the constituent corporations, could be authorized only 2,820
by or pursuant to a specified vote of voting members, such 2,821
agreement (including any amendments or additions thereto proposed 2,822
at each such meeting) in order to be adopted must receive the 2,823
affirmative vote so specified.
60
(C) At any time prior to the filing of the agreement, the 2,825
merger or consolidation may be abandoned by the trustees 2,826
DIRECTORS of one or more of the constituent corporations, if such 2,828
THE power of abandonment is conferred upon such trustees 2,830
DIRECTORS either by the agreement or by the same vote of voting 2,831
members of each of the constituent corporations and at the same 2,832
meetings as those referred to in division (B) of this section or 2,833
at subsequent meetings.
Sec. 1702.44. When such merger or consolidation becomes 2,843
effective: 2,844
(A) The separate existence of all the constituent 2,846
corporations, except the surviving or new corporation, shall 2,847
cease, except that, whenever a conveyance, assignment, transfer, 2,848
deed, or other instrument, or act, is necessary to vest property 2,849
or rights in the surviving or new corporation, the officers of 2,850
the respective constituent corporation shall execute, 2,851
acknowledge, and deliver such instruments, and do such acts, and 2,852
for such purposes the existence of the constituent corporations 2,853
and the authority of their respective officers and trustees 2,854
DIRECTORS shall be deemed continued notwithstanding the merger or 2,856
consolidation;
(B) The constitutent CONSTITUENT corporations shall become 2,858
a single corporation which, in the case of a merger, shall be 2,859
that one of the constituent corporations designated in the 2,860
agreement of merger as the surviving corporation and, in the case 2,861
of a consolidation, shall be the new corporation provided for in 2,862
the agreement of consolidation; 2,863
(C) The surviving or new corporation shall have all the 2,865
rights, privileges, immunities, powers, franchises, and authority 2,866
and shall be subject to all the obligations of a corporation 2,867
formed under sections 1702.01 to 1702.58 of the Revised Code THIS 2,868
CHAPTER; 2,869
(D) The surviving or new corporation shall thereupon and 2,871
thereafter possess all the rights, privileges, immunities, 2,872
61
powers, franchises, and authority, as well of a public as of a 2,873
private nature, of each of the constituent corporations; and all 2,874
property of every description, and every interest therein, and 2,875
all obligations, of or belonging to or due to each of the 2,876
constituent corporations, shall thereafter be taken and deemed to 2,877
be transferred to and vested in the surviving or new corporation 2,878
without further act or deed; and any right or interest in respect 2,879
to any past or future devise, bequest, conditional gift, or 2,880
trust, property, or fund restricted to particular uses, when 2,881
vested in or claimed by such surviving or new corporation as a 2,882
result of such merger or consolidation, shall belong to it as a 2,883
continuation without interruption of the existence and identity 2,884
of the constituent organization originally named as taker or 2,885
beneficiary; and title to any real estate, or any interest 2,886
therein, vested in any of the constituent corporations shall not 2,887
revert or in any way be impaired by reason of such merger or 2,888
consolidation; 2,889
(E) To the extent permitted by the laws of any other state 2,891
in which any constituent corporation has property, the provisions 2,892
of division (D) of this section apply in such state; 2,893
(F) The surviving or new corporation shall thenceforth be 2,895
liable for all the obligations of each of the constituent 2,896
corporations; and any claim existing or action or proceeding 2,897
pending by or against any of the constituent corporations may be 2,898
prosecuted to judgment, with right of appeal as in other cases, 2,899
as if such merger or consolidation had not taken place, or the 2,900
surviving or new corporation may be substituted in its place; 2,901
(G) All the rights of creditors of each constituent 2,903
corporation shall be preserved unimpaired, and all liens upon the 2,904
property of any of the constituent corporations shall be 2,905
preserved unimpaired, limited in lien to the property affected by 2,906
such liens immediately prior to the effective date of the merger 2,907
or consolidation; 2,908
(H) The agreement shall operate as amended articles in the 2,910
62
case of a merger and as original articles in the case of 2,911
consolidation. 2,912
Sec. 1702.45. One or more domestic corporations may merge 2,921
or consolidate with one or more foreign corporations in the 2,922
following manner, if such merger or consolidation is permitted by 2,923
the laws of each state under the laws of which any constituent 2,924
foreign corporation exists:
(A) Each domestic corporation shall comply with the 2,926
provisions of sections 1702.41, 1702.42, and 1702.43 of the 2,927
Revised Code, and each foreign corporation shall comply with the 2,928
applicable provisions of the laws of the state under which it 2,929
exists, except that the agreement of merger or consolidation, by 2,930
whatever name designated, shall comply with divisions (B) and (C) 2,931
of this section, and except that a charitable corporation may
merge into or may consolidate with other charitable corporations 2,932
only, and the surviving or new corporation, as the case may be, 2,933
must be a charitable corporation ANY MERGER OR CONSOLIDATION OF A 2,934
PUBLIC BENEFIT CORPORATION, WHETHER DOMESTIC OR FOREIGN, SHALL 2,935
COMPLY WITH DIVISION (B) OF SECTION 1702.41 OF THE REVISED CODE; 2,936
(B) The agreement shall set forth all statements and 2,938
matters required by section 1702.41 of the Revised Code, except 2,939
that the statement of the place in this state where the principal 2,940
office of the surviving or new corporation is to be located and 2,941
the statement with respect to the appointment of the statutory 2,942
agent shall be set forth only if the surviving or new corporation
is to be a domestic corporation. In addition, the agreement 2,943
shall set forth:
(1) The names of the states under the laws of which each 2,945
constituent corporation exists; 2,946
(2) All statements and matters required to be set forth in 2,948
agreements of merger or consolidation by the laws of each state 2,949
under the laws of which any constituent foreign corporation 2,950
exists;
(3) If the surviving or new corporation is to be a foreign 2,952
63
corporation:
(a) the place where the principal office of the surviving 2,954
or new corporation is to be located in the state under the laws 2,955
of which the surviving or new corporations is to exist; 2,956
(b) the consent by the surviving or new corporation that 2,958
it may be sued and served with process in this state in any 2,959
proceeding for the enforcement of any obligation of any 2,960
constituent domestic corporation;
(c) the irrevocable appointment of the secretary of state 2,962
of this state as its agent to accept service of process in any 2,963
such proceeding;
(d) if it is desired that the surviving or new corporation 2,965
exercise its corporate privileges in this state as a foreign 2,966
corporation in a continual course of transactions, a statement to 2,967
that effect and a statement with respect to the appointment of 2,968
the statutory agent and with respect to the consent to service of 2,969
any process, notice, or demand upon such statutory agent or the 2,970
secretary of state, as required when a foreign corporation
applies for a certificate authorizing it to do so; 2,971
(C) The agreement may also set forth any additional 2,973
provision permitted by the laws of any state under the laws of 2,974
which any constituent corporation exists, to the extent not 2,975
inconsistent with the laws of the state under the laws of which 2,976
the surviving or new corporation is to exist.
Sec. 1702.47. (A) A corporation may be dissolved 2,985
voluntarily in the manner provided in this section. 2,986
(B) A resolution of dissolution for a corporation shall 2,988
set forth: 2,989
(1) That the corporation elects to be dissolved; 2,991
(2) Any additional provision deemed necessary with respect 2,993
to the proposed dissolution and winding up. 2,994
(C) The trustees DIRECTORS may adopt a resolution of 2,996
dissolution in the following cases: 2,998
(1) When the corporation has been adjudged bankrupt or has 3,000
64
made a general assignment for the benefit of creditors; 3,001
(2) By leave of the court, when a receiver has been 3,003
appointed in a general creditors' suit or in any suit in which 3,004
the affairs of the corporation are to be wound up; 3,005
(3) When substantially all of the assets have been sold at 3,007
judicial sale or otherwise; 3,008
(4) When the period of existence of the corporation 3,010
specified in its articles has expired. 3,011
(D) The voting members at a meeting held for such purpose 3,013
may adopt a resolution of dissolution by the affirmative vote of 3,014
a majority of the voting members present IN PERSON OR, IF 3,015
PERMITTED, BY MAIL OR BY PROXY, if a quorum is present or, if the 3,017
articles or the regulations provide or permit, by the affirmative 3,018
vote of a greater or lesser proportion or number of the voting 3,019
members, and by such affirmative vote of the voting members of 3,020
any particular class as is required by the articles or the 3,021
regulations. Notice of the meeting of the members shall be given 3,022
to all the members whether or not entitled to vote thereat.
(E) Upon the adoption of a resolution of dissolution, a 3,024
certificate shall be prepared, on a form prescribed by the 3,025
secretary of state, setting forth the following: 3,026
(1) The name of the corporation; 3,028
(2) A statement that a resolution of dissolution has been 3,030
adopted; 3,031
(3) A statement of the manner of adoption of such 3,033
resolution, and, in the case of its adoption by the trustees 3,034
DIRECTORS, a statement of the basis for such adoption; 3,036
(4) The place in this state where its principal office is 3,038
or is to be located; 3,039
(5) The names and addresses of its trustees DIRECTORS and 3,041
officers; 3,042
(6) The name and address of its statutory agent. 3,044
(F) Such certificate shall be signed by any authorized 3,046
officer, unless the officer fails to execute and file such 3,047
65
certificate within thirty days after the adoption of the 3,049
resolution, or upon any date specified in the resolution as the 3,050
date upon which such certificate is to be filed, or upon the 3,051
expiration of any period specified in the resolution as the 3,052
period within which such certificate is to be filed, whichever is 3,053
latest, in which event the certificate of dissolution may be 3,054
signed by any three voting members and shall set forth a 3,055
statement that the persons signing the certificate are voting 3,056
members and are filing the certificate because of the failure of 3,057
the officers to do so.
(G) A certificate of dissolution, filed with the secretary 3,059
of state, shall be accompanied by: 3,060
(1) An affidavit of one or more of the persons executing 3,062
the certificate of dissolution or of an officer of the 3,063
corporation containing a statement of the counties, if any, in 3,064
this state in which the corporation has personal property subject 3,065
to personal property taxes or a statement that the corporation is 3,066
of a type required to pay personal property taxes to state 3,067
authorities only; 3,068
(2) A receipt, certificate, or other evidence showing the 3,070
payment of all personal property taxes accruing up to the date of 3,071
such filing, unless the affidavit provided for in division (G)(1) 3,072
of this section states that the corporation has in this state no 3,074
personal property subject to personal property taxes;
(3) A receipt, certificate, or other evidence from the 3,076
director of job and family services showing that all 3,078
contributions due from the corporation as an employer have been 3,079
paid, or that such payment has been adequately guaranteed, or 3,080
that the corporation is not subject to such contributions; 3,081
(4) A receipt, certificate, or other evidence showing the 3,083
payment of all sales, use, and highway use taxes accruing up to 3,084
the date of such filing, or that such payment has been adequately 3,085
guaranteed; 3,086
(5) In lieu of the receipt, certificate, or other evidence 3,088
66
described in division (G)(2), (3), or (4) of this section, an 3,089
affidavit of one or more of the persons executing the certificate 3,090
of dissolution or of an officer of the corporation containing a 3,091
statement of the date upon which the particular department, 3,092
agency, or authority was advised in writing of the scheduled date 3,093
of the filing of the certificate of dissolution and was advised 3,094
in writing of the acknowledgement by the corporation of the 3,095
applicability of section 1702.55 of the Revised Code. 3,096
(H) Upon the filing of a certificate of dissolution and 3,098
such accompanying documents, the corporation shall be dissolved. 3,099
Sec. 1702.48. Following the filing of the certificate of 3,108
dissolution, the trustees DIRECTORS shall forthwith cause a 3,109
notice of voluntary dissolution to be published once a week on 3,111
the same day of each week for two successive weeks, in a 3,112
newspaper published and of general circulation in the county in
which the principal office of the corporation was to be or is 3,113
located, and shall forthwith cause written notice of dissolution 3,114
to be given either personally or by mail to all known creditors 3,115
of, and to all known claimants against, the dissolved 3,116
corporation.
Sec. 1702.49. (A) When a corporation is dissolved 3,125
voluntarily or when the articles of a corporation have been 3,126
canceled or when the period of existence of a corporation 3,127
specified in its articles has expired, the corporation shall 3,128
cease to carry on its activities and shall do only such acts as 3,129
are required to wind up its affairs, or to obtain reinstatement 3,130
of the articles in accordance with section 1702.06, 1702.59, or 3,131
1724.06 of the Revised Code, or are permitted upon reinstatement 3,132
by division (C) of section 1702.60 of the Revised Code, and for 3,133
such purposes it shall continue as a corporation. 3,134
(B) Any claim existing or action or proceding PROCEEDING 3,136
pending by or against the corporation or which THAT would have 3,138
accrued against it may be prosecuted to judgment, with right of 3,140
appeal as in other cases, but any proceeding, execution, or 3,141
67
process, or the satisfaction or performance of any order, 3,142
judgment, or decree, may be stayed as provided in section 1702.50 3,143
of the Revised Code.
(C) Any process, notice, or demand against the corporation 3,145
may be served by delivering a copy to an officer, trustee 3,146
DIRECTOR, liquidator, or person having charge of its assets or, 3,148
if no such person can be found, to the statutory agent. 3,149
(D) The trustees DIRECTORS of the corporation and their 3,151
survivors or successors shall act as a board of trustees 3,153
DIRECTORS in accordance with the regulations and bylaws until the 3,155
affairs of the corporation are completely wound up. Subject to 3,156
the orders of courts of this state having jurisdiction over the 3,157
corporation, the trustees DIRECTORS shall proceed as speedily as 3,159
is practicable to a complete winding up of the affairs of the 3,160
corporation and, to the extent necessary or expedient to that 3,161
end, shall exercise all the authority of the corporation. 3,162
Without limiting the generality of such authority, they may fill 3,163
vacancies, elect officers, carry out contracts of the 3,164
corporation, make new contracts, borrow money, mortgage or pledge 3,165
the property of the corporation as security, sell its assets at 3,166
public or private sale, make conveyances in the corporate name, 3,167
lease real estate for any term, including ninety-nine years 3,168
renewable forever, settle or compromise claims in favor of or 3,169
against the corporation, employ one or more persons as 3,170
liquidators to wind up the affairs of the corporation with such 3,171
authority as the trustees DIRECTORS see fit to grant, cause the 3,172
title to any of the assets of the corporation to be conveyed to 3,173
such liquidators for that purpose, apply assets to the payment of 3,174
obligations, perform all other acts necessary or expedient to the 3,175
winding up of the affairs of the corporation, and, after paying 3,176
or adequately providing for the payment of all known obligations 3,177
of the corporation, distribute the remainder of the assets as 3,178
follows: 3,179
(1) Assets held upon condition requiring return, transfer, 3,181
68
or conveyance, which condition shall have occurred by reason of 3,182
the dissolution or otherwise, shall be returned, transferred, or 3,183
conveyed in accordance with such requirements; 3,184
(2) In the case of a charitable PUBLIC BENEFIT 3,186
corporation: (a) assets held by it in trust for specified 3,188
purposes shall be applied so far as is feasible in accordance 3,189
with the terms of the trust;, (b) the remaining assets not held 3,190
in trust shall be applied so far as is feasible towards carrying 3,191
out the purposes stated in its articles;, (c) in the event and to 3,192
the extent that, in the judgment of the trustees DIRECTORS, it is 3,193
not feasible to apply the assets as provided in above clauses (a) 3,195
and (b), the assets shall be applied as may be directed by the 3,196
court of common pleas of the county in this state in which the 3,197
principal office of the corporation is located, in an action 3,198
brought for that purpose by the corporation or by the trustees 3,199
DIRECTORS or any thereof, to which action the attorney general of 3,201
the state shall be a party, or in an action brought by the 3,202
attorney general in a court of competent jurisdiction, or in an 3,203
action brought as provided in section 1702.50 of the Revised Code 3,204
for the purpose of winding up the affairs of the corporation 3,205
under the supervision of the court;
(3) In the case of a MUTUAL BENEFIT corporation other than 3,207
a charitable corporation, any remaining assets shall be 3,209
distributed in accordance with the applicable provisions of the 3,210
articles or the regulations or, to the extent that no such 3,211
provision is made, the assets shall be distributed pursuant to a 3,212
plan of distribution adopted by the voting members at a meeting 3,213
held for the purpose of voting on dissolution, or any adjournment 3,214
thereof, by the same affirmative vote as that required for the 3,215
adoption of a resolution of dissolution. If no plan of 3,216
distribution is so adopted by the voting members, then said 3,217
remaining assets shall be distributed pursuant to a plan of 3,218
distribution adopted by the trustees DIRECTORS. IF NO PLAN OF 3,219
DISTRIBUTION IS SO ADOPTED BY THE VOTING MEMBERS OR DIRECTORS, 3,220
69
THEN THE REMAINING ASSETS SHALL BE APPLIED AS MAY BE DIRECTED BY 3,221
THE COURT OF COMMON PLEAS OF THE COUNTY IN THIS STATE IN WHICH
THE PRINCIPAL OFFICE OF THE CORPORATION IS LOCATED, IN AN ACTION 3,222
BROUGHT FOR THAT PURPOSE BY THE MUTUAL BENEFIT CORPORATION OR BY 3,223
THE DIRECTORS OR ANY THEREOF, OR BY THE ATTORNEY GENERAL IN A 3,224
COURT OF COMPETENT JURISDICTION, OR IN AN ACTION BROUGHT AS 3,225
PROVIDED IN SECTION 1702.50 OF THE REVISED CODE FOR THE PURPOSE
OF WINDING UP THE AFFAIRS OF THE CORPORATION UNDER THE 3,226
SUPERVISION OF THE COURT.
(E) Without limiting the authority of the trustees 3,228
DIRECTORS, any action within the purview of this section which 3,230
THAT is authorized or approved by the voting members at a meeting 3,232
held for such purpose, by the same affirmative vote as that 3,233
required for the adoption of a resolution of dissolution, shall 3,234
be conclusive for all purposes upon all members of the 3,235
corporation, except that nothing herein set forth shall impair 3,236
the jurisdiction of courts of competent jurisdiction to enforce 3,237
the duties of a charitable PUBLIC BENEFIT corporation in respect 3,239
of the application of its assets towards ITS PUBLIC OR charitable 3,240
purposes, or impair the power of the state, acting through the 3,242
attorney general, to require such assets to be applied, as nearly 3,243
as may be, towards ITS PUBLIC OR charitable purposes. 3,244
(F) All deeds and other instruments of the corporation 3,246
shall be in the name of the corporation and shall be executed, 3,247
acknowledged, and delivered by the officers appointed by the 3,248
trustees DIRECTORS. 3,249
(G) At any time during the winding up of its affairs, the 3,251
corporation by its trustees DIRECTORS may make application to the 3,253
court of common pleas of the county in this state in which the 3,254
principal office of the corporation is located to have the 3,255
winding up continued under supervision of the court, as provided 3,256
in section 1702.50 of the Revised Code. 3,257
Sec. 1702.50. (A) Without limiting the generality of its 3,266
authority, the court of common pleas of the county in this state 3,267
70
in which is located the principal office of a voluntarily 3,268
dissolved corporation or of a corporation whose articles have 3,269
been canceled or whose period of existence has expired, upon the 3,270
complaint of the corporation, a majority of the trustees 3,271
DIRECTORS, or a creditor or member, and upon such notice to all 3,273
the trustees DIRECTORS and such other persons interested as the 3,275
court considers proper, at any time may order and adjudge in 3,276
respect to the following matters: 3,277
(1) The presentation and proof of all claims and demands 3,279
against the corporation and of all rights, interests, or liens in 3,280
or on any of its property; the fixing of the time within which 3,281
and the manner in which such proof shall be made and the person 3,282
to whom such presentation shall be made; and the barring from 3,283
participation in any distribution of assets of all persons 3,284
failing to make and present proofs as required by the order of 3,285
the court; 3,286
(2) The stay of the prosecution of any proceeding against 3,288
the corporation or involving any of its property, and the 3,289
requirement that the parties to it present and prove their 3,290
claims, demands, rights, interests, or liens at the time and in 3,291
the manner required of creditors or others; or the grant of leave 3,292
to bring or maintain an independent proceeding to enforce liens; 3,293
(3) The settlement or determination of all claims of every 3,295
nature against the corporation or any of its property; the 3,296
determination of the assets required to be retained to pay or 3,297
provide for the payment of such claims or any claim; the 3,298
determination of the assets available for distribution among 3,299
members and others; and the making of new parties to the 3,300
proceeding so far as the court considers proper for the 3,301
determination of all matters; 3,302
(4) The determination of the rights of members or others 3,304
in and to the assets of the corporation; 3,305
(5) The presentation and the filing of intermediate and 3,307
final accounts of the trustees DIRECTORS or of the liquidators 3,308
71
and hearings on them; the allowance, disallowance, or settlement 3,310
of such accounts; and the discharge of the trustees DIRECTORS, 3,311
the liquidators, or any of them from their duties and 3,313
liabilities;
(6) The appointment of a special master commissioner to 3,315
hear and determine any such matters with such authority as the 3,316
court considers proper; 3,317
(7) The filling of any vacancies in the number of trustees 3,319
DIRECTORS or liquidators when the trustees DIRECTORS are unable 3,321
to act on the vacancies for want of a quorum or for any other 3,323
reason;
(8) The appointment of a receiver, in accordance with the 3,325
usages of a court in equitable matters, to wind up the affairs of 3,326
the corporation, to take custody of any of its property, or for 3,327
any other purpose; 3,328
(9) The issuance or entry of any injunction or any other 3,330
order which THAT the court considers proper in the administration 3,332
of the trust involved in the winding up of the affairs of the 3,333
corporation and the giving of notice of it; 3,334
(10) The allowance and payment of compensation to the 3,336
trustees DIRECTORS or any of them, to liquidators, to a receiver, 3,338
to the attorney for the complainant, or to any person properly 3,339
rendering services beneficial to the corporation or to those 3,340
interested in it; 3,341
(11) The entry of a judgment or decree which THAT, if it 3,343
so provides, may operate as the deed or other instrument ordered 3,344
to be executed, or the appointment of a master to execute such 3,345
deed or instrument in the name of the corporation with the same 3,346
effect as if executed by an authorized officer pursuant to 3,347
authority conferred by the trustees DIRECTORS or the voting 3,348
members of the corporation, whenever there is no officer or agent 3,349
competent to execute such deed or instrument, whenever the 3,350
corporation or its officers do not perform or comply with a 3,351
judgment or decree of court, or whenever the court considers it 3,352
72
proper.
(B) A judicial proceeding under this section concerning 3,354
the winding up of the affairs of a corporation is a special 3,355
proceeding, and final orders in the proceeding may be vacated, 3,356
modified, or reversed on appeal pursuant to the Rules of 3,357
Appellate Procedure and, to the extent not in conflict with those 3,358
rules, Chapter 2505. of the Revised Code. 3,359
Sec. 1702.51. (A) Whenever, after a corporation is 3,368
dissolved voluntarily or the articles of a corporation have been 3,369
canceled or the the period of existence of a corporation has 3,370
expired, a receiver is appointed to wind up the affairs of the 3,371
corporation, all the claims, demands, rights, interests, or liens 3,372
of creditors, claimants, and members shall be determined as of
the day on which the receiver was appointed. Unless it is 3,373
otherwise ordered, such appointment vests in the receiver and his 3,374
THE RECEIVER'S successors the right to the immediate possession 3,376
of all the property of the corporation, which shall, if so 3,377
ordered, execute and deliver conveyances of such property to the 3,378
receiver or his THE RECEIVER'S nominee. 3,379
(B) Any officer, trustee DIRECTOR, member, or other 3,381
person, whether a resident of the state or a non-resident 3,383
NONRESIDENT and however interested, may be appointed as receiver. 3,384
(C) The receiver shall have all the authority vested in 3,386
the trustees DIRECTORS and officers of the corporation, shall 3,388
exercise such authority subject to such orders as are made by the 3,389
court, and may be required to qualify by giving bond to the state 3,390
in such amount as the court fixes, with surety to the
satisfaction of the clerk of the court, conditioned for the 3,391
faithful discharge of his THE RECEIVER'S duties and for a due 3,392
accounting for all money or property received by him THE 3,393
RECEIVER.
Sec. 1702.52. (A) A corporation may be dissolved 3,402
judicially and its affairs wound up: 3,403
(1) By an order of the supreme court or of a court of 3,405
73
appeals in an action in quo warranto brought as provided by 3,406
sections 2733.02 to 2733.39 of the Revised Code, in which event 3,407
the court may order the affairs of the corporation to be wound up 3,408
by its trustees DIRECTORS as in the case of voluntary 3,409
dissolution, or by proceedings in, and under the order of, the 3,411
court of common pleas of the county in this state in which the 3,412
corporation has its principal office; 3,413
(2) By an order of the court of common pleas of the county 3,415
in this state in which such corporation has its principal office, 3,416
in an action brought by voting members entitled to dissolve the 3,417
corporation voluntarily, when it is established: 3,418
(a) That its articles have been canceled or its period of 3,420
existence has expired and that it is necessary in order to 3,421
protect the members that the corporation be judicially dissolved; 3,422
(b) That the corporation is insolvent or is unable to 3,424
afford reasonable security to those who may deal with it and that 3,425
it is necessary in order to protect the creditors of the 3,426
corporation that the corporation be judicially dissolved; 3,427
(c) That the objects of the corporation have wholly failed 3,429
or are entirely abandoned or that their accomplishment is 3,430
impracticable; 3,431
(3) By an order of the court of common pleas of the county 3,433
in this state in which the corporation has its principal office, 3,434
in an action brought by a majority of the voting members, or such 3,435
lesser proportion or number of voting members as are entitled by 3,436
the articles to dissolve the corporation voluntarily, when it is 3,437
established that it is beneficial to the members that the 3,438
corporation be judicially dissolved; 3,439
(4) By an order of the court of common pleas of the county 3,441
in this state in which the corporation has its principal office, 3,442
in an action brought by one-half of the trustees DIRECTORS when 3,443
there is an even number of trustees DIRECTORS or by one-half of 3,445
the voting members, when it is established that the corporation 3,447
has an even number of trustees DIRECTORS who are deadlocked in 3,448
74
the management of the corporate affairs and the voting members 3,450
are unable to break the deadlock, or when it is established that 3,451
the corporation has an uneven number of trustees DIRECTORS and 3,452
that the voting members are deadlocked in voting power and unable 3,454
to agree upon or vote for the election of trustees DIRECTORS as 3,455
successors to trustees DIRECTORS whose terms normally would 3,456
expire upon the election of their successors. 3,457
(B) A complaint for judicial dissolution shall be verified 3,459
by any of the complainants and shall set forth facts showing that 3,460
the case is one of those specified in this section. Unless the 3,461
complainants set forth in the complaint that they are unable to 3,462
annex a list of members, a schedule shall be annexed to the 3,463
complaint setting forth the name of each member and his THE 3,464
MEMBER'S address if it is known. 3,465
(C) Upon the filing of a complaint for judicial 3,467
dissolution, the court with which it is filed shall have power to 3,468
issue injunctions, to appoint a receiver with such authority and 3,469
duties as the court from time to time may direct, to take such 3,470
other proceedings as may be necessary to protect the property or 3,471
the rights of the complainants or of the persons interested, and 3,472
to carry on the activities of the corporation until a full 3,473
hearing can be had. Upon or after the filing of a complaint for 3,474
judicial dissolution, the court, by injunction or order, may stay 3,475
the prosecution of any proceeding against the corporation or 3,476
involving any of its property and require the parties to it to 3,477
present and prove their claims, demands, rights, interests, or 3,478
liens, at the time and in the manner required of creditors or 3,479
others. The court may refer the complaint to a special master 3,480
commissioner. 3,481
(D) After a hearing had upon such notice as the court may 3,483
direct to be given to all parties to the proceeding and to any 3,484
other parties in interest designated by the court, a final order 3,485
based either upon the evidence, or upon the report of the special 3,486
master commissioner if one has been appointed, shall be made 3,487
75
dissolving the corporation or dismissing the complaint. An order 3,488
or judgment for the judicial dissolution of a corporation shall 3,489
contain a concise statement of the proceedings leading up to the 3,490
order or judgment; the name of the corporation; the place in this 3,491
state where its principal office is located; the names and 3,492
addresses of its trustees DIRECTORS and officers; the name and 3,493
address of a statutory agent; and, if desired, such other 3,495
provisions with respect to the judicial dissolution and winding 3,496
up as are considered necessary or desirable. A certified copy of 3,497
such order forthwith shall be filed in the office of the 3,498
secretary of state, whereupon the corporation shall be dissolved. 3,499
To the extent consistent with orders entered in such proceeding, 3,500
the effect of such judicial dissolution shall be the same as in 3,501
the case of voluntary dissolution, and the provisions of sections 3,502
1702.49, 1702.50, and 1702.51 of the Revised Code relating to the 3,503
authority and duties of trustees DIRECTORS during the winding up 3,504
of the affairs of a corporation dissolved voluntarily, with 3,506
respect to the jurisdiction of courts over the winding up of the 3,507
affairs of a corporation, and with respect to receivers for 3,508
winding up the affairs of a corporation shall be applicable to 3,509
corporations judicially dissolved. 3,510
(E) A judicial proceeding under this section concerning 3,512
the judicial dissolution of a corporation is a special 3,513
proceeding, and final orders in the proceeding may be vacated, 3,514
modified, or reversed on appeal pursuant to the Rules of 3,515
Appellate Procedure or the Rules of Practice of the Supreme 3,516
Court, whichever are applicable, and, to the extent not in 3,517
conflict with those rules, Chapter 2505. of the Revised Code. 3,518
Sec. 1702.521. (A) Upon the complaint of not less than 3,527
one-fourth of the trustees DIRECTORS of the corporation, the 3,528
court of common pleas of the county in which the corporation 3,530
maintains its principal office may order the appointment of a 3,531
provisional trustee DIRECTOR for that corporation if the articles 3,532
or regulations of the corporation expressly provide for such an 3,534
76
appointment. No appointment shall be made until a hearing is 3,535
held by the court. Notice of the hearing shall be given to each 3,536
trustee DIRECTOR and the secretary of the corporation in any 3,538
manner that the court directs. The complainants shall establish 3,539
at the hearing that, because of irreconcilable differences among 3,540
the existing trustees DIRECTORS, the continued operation of the 3,541
corporation has been substantially impeded or made impossible. 3,543
(B) A provisional trustee DIRECTOR shall have the same 3,545
rights and duties as other trustees DIRECTORS and shall serve 3,547
until removed by the appointing court or by the members of the 3,549
corporation entitled to exercise a majority of the voting power 3,550
of the corporation in the election of trustees DIRECTORS or until 3,551
his THE PROVISIONAL DIRECTOR'S earlier resignation or death. If 3,554
the provisional trustee DIRECTOR dies or resigns, the court,
pursuant to division (A) of this section, may appoint a 3,556
replacement provisional trustee DIRECTOR, upon its own motion and 3,557
without the filing of a complaint for the appointment of a 3,559
provisional trustee DIRECTOR. If the appointing court finds that 3,561
the irreconcilable differences no longer exist, it shall order 3,562
the removal of the provisional trustee DIRECTOR. 3,563
(C) No person shall be appointed as a provisional trustee 3,565
DIRECTOR unless he THE PERSON is generally conversant with 3,567
corporate affairs, has no legal or equitable interest in the 3,569
obligations of the corporation of which he THE PERSON is to be 3,570
appointed a trustee DIRECTOR, and is not indebted to such 3,573
corporation. The compensation of a provisional trustee DIRECTOR 3,574
shall be determined by agreement with the corporation for which 3,575
he THE PROVISIONAL DIRECTOR is serving, subject to the approval 3,576
of the appointing court, except that the appointing court may fix 3,578
his THE PROVISIONAL DIRECTOR'S compensation in the absence of 3,580
agreement or in the event of disagreement between the provisional 3,581
trustee DIRECTOR and the corporation.
(D) A proceeding concerning the appointment of a 3,583
provisional trustee DIRECTOR of a corporation is a special 3,584
77
proceeding, and final orders issued in the proceeding may be 3,586
vacated, modified, or reversed on appeal pursuant to the Rules of 3,587
Appellate Procedure and, to the extent not in conflict with those 3,588
rules, Chapter 2505. of the Revised Code. 3,589
Sec. 1702.53. (A) A copy of the articles or amended 3,598
articles filed in the office of the secretary of state, certified 3,599
by the secretary of state, shall be conclusive evidence, except 3,600
as against the state, that the corporation has been incorporated 3,601
under the laws of this state; and a copy duly certified by the 3,602
secretary of state of any certificate of amendment or other
certificate filed in his THE SECRETARY OF STATE'S office shall be 3,603
prima-facie evidence of such amendment or of the facts stated in 3,606
any such certificate, and of the observance and performance of
all antecedent conditions necessary to the action which such 3,607
certificate purports to evidence. 3,608
(B) A copy of amended articles filed in the office of the 3,610
secretary of state, certified by the secretary of state, shall be 3,611
accepted in this state and other jurisdictions in lieu of the 3,612
original articles, amendments thereto, and prior amended 3,613
articles.
(C) The original or a copy of the record of minutes of the 3,615
proceedings of the incorporators of a corporation, or of the 3,616
proceedings or meetings of the members or any class of members, 3,617
or of the trustees DIRECTORS, or of any committee thereof, 3,619
including any written consent, waiver, release, or agreement
entered in such record or minutes, or the original or a copy of a 3,620
statement that no specified proceeding was had or that no 3,621
specified consent, waiver, release, or agreement exists, shall, 3,622
when certified to be true by the secretary or an assistant 3,623
secretary of a corporation, be received in the courts as
prima-facie evidence of the facts stated therein. Every meeting 3,624
referred to in such certified original or copy shall be deemed 3,625
duly called and held, and all motions and resolutions adopted and 3,626
proceedings had at such meeting shall be deemed duly adopted and 3,627
78
had, and all elections of trustees DIRECTORS and all elections or 3,629
appointments of officers chosen at such meeting shall be deemed
valid, until the contrary is proved; and whenever a person who is 3,630
not a member of a corporation has acted in good faith in reliance 3,631
upon any such certified original or copy, it is conclusive in his 3,632
THE PERSON'S favor.
Sec. 1702.54. (A) No officer, trustee DIRECTOR, employee, 3,641
or agent of a corporation shall, either alone or with another or 3,643
others, with intent to deceive:
(1) Make, issue, deliver, transmit by mail, or publish any 3,645
prospectus, report, circular, certificate, statement, balance 3,646
sheet, exhibit, or document, respecting membership rights in, or 3,647
the activities, assets, liabilities, earnings, or accounts of, a 3,648
corporation, which THAT is false in any material respect, knowing 3,650
the same to be false;
(2) Having charge of any books, minutes, records, or 3,652
accounts of a corporation, make therein any entry which THAT is 3,653
false in any material respect, knowing such entry to be false, or 3,655
remove, erase, alter, or cancel any entry therein, knowing that 3,656
the entries resulting therefrom will be false.
(B) Whoever violates this section shall be personally 3,658
liable, jointly and severally, with all other persons 3,659
participating with him THE PERSON in any such act, to any person 3,661
for any damage actually suffered and proximately resulting from
such act. 3,662
(C) No action to enforce a liability under this section 3,664
shall be brought after four years from the time of the act 3,665
complained of.
(D) Remedies under this section are not exclusive of other 3,667
remedies at common law or under other statutes. 3,668
Sec. 1702.55. (A) The members, the trustees DIRECTORS, 3,677
and the officers of a corporation shall not be personally liable 3,678
for any obligation of the corporation. 3,679
(B) Trustees DIRECTORS who vote for or assent to: 3,681
79
(1) A distribution of assets to members contrary to law or 3,683
the articles; 3,684
(2) A distribution of assets to persons other than 3,686
creditors during the winding up of the affairs of the 3,687
corporation, on dissolution or otherwise, without the payment of 3,688
all known obligations of the corporation, or without making 3,689
adequate provision therefor; 3,690
(3) The making of loans, other than in the usual conduct 3,692
of its affairs or in accordance with provisions therefor in the 3,693
articles, to an officer, trustee DIRECTOR, or member of the 3,694
corporation; shall be jointly and severally liable to the 3,696
corporation as follows: in cases under division (B)(1) of this 3,697
section up to the amount of such distribution in excess of the 3,698
amount that could have been distributed without violation of law 3,699
or the articles, but not in excess of the amount that would inure 3,700
to the benefit of the creditors of the corporation if it was 3,701
insolvent at the time of the distribution or there was reasonable 3,702
ground to believe that by such action it would be rendered 3,703
insolvent, or to the benefit of the members other than members of 3,704
the class in respect of which the distribution was made; and in 3,705
cases under division (B)(2) of this section, to the extent that 3,706
such obligations (not otherwise barred by statute) are not paid, 3,707
or for the payment of which adequate provision has not been made; 3,708
and in cases under division (B)(3) of this section, for the 3,709
amount of the loan with interest thereon at the rate of six per 3,710
cent per annum until such amount has been paid, provided, EXCEPT 3,711
that a trustee DIRECTOR shall not be liable under division (B)(1) 3,713
or (2) of this section if in determining the amount available for 3,715
any such distribution, he THE DIRECTOR in good faith relied on a 3,716
financial statement of the corporation prepared by an officer or 3,719
employee of the corporation in charge of its accounts or 3,720
certified by a public accountant or firm of public accountants, 3,721
or in good faith he THE DIRECTOR considered the assets to be of 3,723
their book value, or he THE DIRECTOR followed what he THE 3,725
80
DIRECTOR believed to be sound accounting and business practice. 3,727
(C) A trustee DIRECTOR who is present at a meeting of the 3,729
trustees DIRECTORS or a committee thereof at which action on any 3,731
matter is authorized or taken and who has not voted for or 3,732
against such action shall be presumed to have voted for the 3,733
action unless his THE DIRECTOR'S written dissent therefrom is 3,735
filed either during the meeting or within a reasonable time after 3,736
the adjournment thereof, with the person acting as secretary of 3,737
the meeting or with the secretary of the corporation. 3,738
(D) A member who knowingly receives any distribution made 3,740
contrary to law or the articles shall be liable to the 3,741
corporation for the amount received by him which THE MEMBER THAT 3,742
is in excess of the amount which THAT could have been distributed 3,745
without violation of law or the articles. 3,747
(E) A trustee DIRECTOR against whom a claim is asserted 3,749
under or pursuant to this section and who is held liable thereon 3,751
shall be entitled to contribution, on equitable principles, from 3,752
other trustees DIRECTORS who also are liable; and in addition, 3,753
any trustee DIRECTOR against whom a claim is asserted under or 3,755
pursuant to this section or who is held liable shall have a right 3,756
of contribution from the members who knowingly received any 3,757
distribution made contrary to law or the articles, and such 3,758
members as among themselves shall also be entitled to 3,759
contribution in proportion to the amounts received by them 3,760
respectively.
(F) No action shall be brought by or on behalf of a 3,762
corporation upon any cause of action arising under division 3,763
(B)(1) or (2) of this section at any time after two years from 3,764
the day on which the violation occurs; provided that no such 3,765
action shall be barred by this division (F) prior to January 1, 3,766
1956. 3,767
(G) Nothing contained in this section shall preclude any 3,769
creditor whose claim is unpaid from exercising such rights as he 3,770
THE CREDITOR otherwise would have by law to enforce his THE 3,772
81
CREDITOR'S claim against assets of the corporation distributed to 3,774
members or other persons.
Sec. 1702.58. (A) Except as provided in sections 1702.01 3,783
to 1702.58, inclusive, of the Revised Code, the provisions of 3,784
said THOSE sections shall apply only to domestic corporations, 3,787
and except as otherwise provided in this section, the provisions 3,788
of said THOSE sections shall apply to all domestic corporations, 3,790
whether formed under said THOSE sections or under previous laws 3,791
of this state. 3,792
(B) Special provisions in the Revised Code for the 3,794
organization, conduct, or government of designated classes of 3,795
corporations shall govern to the exclusion of the provisions of 3,796
sections 1702.01 to 1702.58, inclusive, of the Revised Code, on 3,798
the same subject, except where it clearly appears that a special 3,799
provision is cumulative, in which case it THAT PROVISION and the 3,800
provisions of said THOSE sections on the same subject shall 3,802
apply.
(C) A corporation incorporated prior to June 9, 1927, with 3,804
authority to issue shares may continue to issue and re-issue 3,805
REISSUE shares in accordance with its articles, but shall be 3,807
without authority to amend its articles in order to increase the 3,808
authorized number of shares.
(D) A corporation created before September 1, 1851, which 3,810
THAT (1) has expressly elected to be governed by the laws passed 3,812
since that date, (2) subsequent to that date has taken such 3,813
action under laws then in effect as to make it subject, as a 3,814
matter of law, to the Constitution of 1851 and laws passed
thereunder, or (3) subsequent to October 1, 1955, takes any 3,815
action under sections 1702.01 to 1702.58, inclusive, of the 3,816
Revised Code, or any of them, which THAT but for said THOSE 3,818
sections it would not be authorized to take, shall be deemed to 3,820
be a corporation exercising its corporate privileges under the
Constitution of this state and the laws passed in pursuance 3,821
thereof, and not otherwise. 3,822
82
(E) A corporation created before September 1, 1851, and 3,824
actually carrying on its activities in this state, and which 3,825
prior to October 11, 1955, has not taken action described in 3,827
division (D) of this section, may accept the provisions of 3,828
sections 1702.01 to 1702.58, inclusive, of the Revised Code, at a 3,830
meeting of voting members held for such purpose, by a resolution
to that effect adopted by the affirmative vote of a majority of 3,831
the voting members present IN PERSON OR, IF PERMITTED, BY MAIL OR 3,832
BY PROXY, if a quorum is present, and by filing in the office of 3,833
the secretary of state a copy of said THE resolution certified by 3,835
the president or a vice-president and the secretary or an 3,837
assistant secretary ANY AUTHORIZED OFFICER of the corporation, 3,838
for which filing the secretary of state shall charge and collect 3,839
a fee of five dollars. Thereafter said THE corporation shall be 3,840
deemed to exercise its corporat CORPORATE privileges under the 3,842
Constitution of this state and the laws passed in pursuance 3,845
thereof, and not otherwise.
(F) Except as provided in divisions (D) and (E) of this 3,847
section, a corporation created before September 1, 1851, shall be 3,848
governed by the laws in force on that date as modified since that 3,849
date.
(G) A domestic BUSINESS corporation for profit, upon 3,851
compliance with the provision of the Revised Code as in effect 3,853
from time to time relating to such BUSINESS corporation's 3,854
becoming a nonprofit corporation upon amendment to its articles 3,855
or upon adoption of amended articles, as provided by law, shall, 3,856
upon filing the prescribed certificate in the office of the 3,857
secretary of state, become a corporation subject to the 3,858
provisions of, and entitled to all the rights, privileges, 3,859
immunities, powers, franchises, and authority granted by,
sections 1702.01 to 1702.58, inclusive, of the Revised Code THIS 3,861
CHAPTER.
Sec. 1702.59. (A) Every nonprofit corporation, 3,870
incorporated under the general corporation laws of this state, or 3,871
83
previous laws, or under special provisions of the Revised Code, 3,872
or created before September 1, 1851, which corporation has 3,873
expressedly or impliedly elected to be governed by the laws 3,874
passed since that date, and whose articles or other documents are 3,875
filed with the secretary of state, shall file with the secretary 3,876
of state a verified statement of continued existence, signed by a 3,877
trustee DIRECTOR, officer, or three members in good standing, 3,879
setting forth the corporate name, the place where the principal 3,880
office of the corporation is located, the date of incorporation, 3,881
the fact that the corporation is still actively engaged in 3,882
exercising its corporate privileges, and the name and address of 3,883
its agent appointed pursuant to section 1702.06 of the Revised 3,884
Code.
(B) Each corporation required to file a statement of 3,887
continued existence shall file it with the secretary of state 3,888
within each five years after the date of incorporation or of the 3,889
last corporate filing. For filing such statements of continued 3,890
existence, the secretary of state shall charge and collect a fee
of five dollars. 3,891
(C) Corporations specifically exempted by division (N) of 3,893
section 1702.06 of the Revised Code, or whose activities are 3,894
regulated or supervised by another state official, agency, 3,895
bureau, department, or commission are exempted from this section. 3,896
(D) The secretary of state shall give notice in writing 3,898
and provide a form for compliance with this section to each 3,899
corporation required by this section to file the statement of 3,900
continued existence, such notice and form to be mailed to the 3,901
last known address of the corporation as it appears on the 3,902
records of the secretary of state or which the secretary of state 3,904
may ascertain upon a reasonable search. 3,905
(E) In the event any nonprofit corporation required by 3,907
this section to file a statement of continued existence fails to 3,908
file the statement required every fifth year, then the secretary 3,909
of state shall cancel the articles of such corporation, make a 3,910
84
notation of the cancellation on the records, and mail to the 3,911
corporation a certificate of the action so taken. 3,912
(F) A corporation whose articles have been canceled may be 3,914
reinstated by filing an application for reinstatement and paying 3,915
to the secretary of state a fee of ten dollars. The name of a 3,916
corporation whose articles have been canceled shall be reserved 3,917
for a period of one year after the date of cancellation. If the 3,918
reinstatement is not made within one year from the date of the 3,919
cancellation of its articles of incorporation and it appears that 3,920
a corporate name, limited liability company name, limited 3,922
liability partnership name, limited partnership name, or trade
name has been filed, the name of which is not distinguishable 3,923
upon the record as provided in section 1702.06 of the Revised 3,924
Code, the applicant for reinstatement shall be required by the 3,926
secretary of state, as a condition prerequisite to such 3,927
reinstatement, to amend its articles by changing its name. A 3,928
certificate of reinstatement may be filed in the recorder's 3,929
office of any county in the state, for which the recorder shall 3,930
charge and collect a fee of one dollar. The rights, privileges, 3,931
and franchises of a corporation whose articles have been
reinstated are subject to section 1702.60 of the Revised Code. 3,932
(G) The secretary of state shall furnish the tax 3,934
commissioner a list of all corporations failing to file the 3,935
required statement of continued existence. 3,936
Section 2. That existing sections 1701.01, 1702.01, 3,938
1702.02, 1702.03, 1702.04, 1702.05, 1702.06, 1702.07, 1702.08, 3,939
1702.10, 1702.11, 1702.12, 1702.13, 1702.14, 1702.15, 1702.16, 3,940
1702.17, 1702.18, 1702.19, 1702.21, 1702.22, 1702.23, 1702.25, 3,941
1702.26, 1702.27, 1702.28, 1702.29, 1702.30, 1702.301, 1702.31, 3,942
1702.32, 1702.33, 1702.34, 1702.36, 1702.38, 1702.39, 1702.41, 3,943
1702.42, 1702.44, 1702.45, 1702.47, 1702.48, 1702.49, 1702.50, 3,944
1702.51, 1702.52, 1702.521, 1702.53, 1702.54, 1702.55, 1702.58, 3,945
and 1702.59 of the Revised Code are hereby repealed. 3,946
Section 3. Any trustee of a nonprofit corporation that was 3,948
85
organized prior to the effective date of this act shall be 3,949
considered a director, as defined in division (K) of section 3,950
1702.01 of the Revised Code as amended by this act, of the 3,951
nonprofit corporation and shall have the rights, privileges, and
responsibilities of a director of a nonprofit corporation under 3,952
Chapter 1702. of the Revised Code. A nonprofit corporation that 3,953
was organized prior to the effective date of this act is not 3,954
required to take any action to convey these rights, privileges, 3,955
and responsibilities of directors to the trustees of the
nonprofit corporation. 3,956
Section 4. The General Assembly hereby declares that the 3,958
General Assembly, by enacting any provision of this act, does not 3,959
intend to repeal any provision of sections 109.34, 109.35, and 3,960
109.99 of the Revised Code.