As Reported by the Senate Judiciary Committee 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
SENATORS LATTA-FINGERHUT-HERINGTON 8
_________________________________________________________________ 10
A B I L L
To amend sections 1701.01, 1702.01, 1702.02, 12
1702.03, 1702.04, 1702.05, 1702.06, 1702.07, 13
1702.08, 1702.10, 1702.11, 1702.12, 1702.13,
1702.14, 1702.15, 1702.16, 1702.17, 1702.18, 14
1702.19, 1702.21, 1702.22, 1702.23, 1702.25, 15
1702.26, 1702.27, 1702.28, 1702.29, 1702.30,
1702.301, 1702.31, 1702.32, 1702.33, 1702.34, 16
1702.36, 1702.38, 1702.39, 1702.41, 1702.42, 17
1702.44, 1702.45, 1702.47, 1702.48, 1702.49, 18
1702.50, 1702.51, 1702.52, 1702.521, 1702.53,
1702.54, 1702.55, 1702.58, and 1702.59 of the 19
Revised Code to modify the Nonprofit Corporation 20
Law, including creating two new types of
nonprofit corporate entities; changing references 21
from trustees to directors; modifying membership 22
rights, notice and voting provisions, and merger 23
and consolidation provisions; and making related
changes. 24
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 26
Section 1. That sections 1701.01, 1702.01, 1702.02, 28
1702.03, 1702.04, 1702.05, 1702.06, 1702.07, 1702.08, 1702.10, 29
1702.11, 1702.12, 1702.13, 1702.14, 1702.15, 1702.16, 1702.17, 30
1702.18, 1702.19, 1702.21, 1702.22, 1702.23, 1702.25, 1702.26, 31
1702.27, 1702.28, 1702.29, 1702.30, 1702.301, 1702.31, 1702.32, 32
1702.33, 1702.34, 1702.36, 1702.38, 1702.39, 1702.41, 1702.42, 33
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1702.44, 1702.45, 1702.47, 1702.48, 1702.49, 1702.50, 1702.51, 34
1702.52, 1702.521, 1702.53, 1702.54, 1702.55, 1702.58, and 35
1702.59 of the Revised Code be amended to read as follows: 37
Sec. 1701.01. As used in sections 1701.01 to 1701.98 of 46
the Revised Code, unless the context otherwise requires: 47
(A) "Corporation" or "domestic corporation" means a 49
corporation for profit formed under the laws of this state. 50
(B) "Foreign corporation" means a corporation for profit 52
formed under the laws of another state, and "foreign entity" 53
means an entity formed under the laws of another state. 54
(C) "State" means the United States; any state, territory, 56
insular possession, or other political subdivision of the United 57
States, including the District of Columbia; any foreign country 58
or nation; and any province, territory, or other political 59
subdivision of such foreign country or nation. 60
(D) "Articles" includes original articles of 62
incorporation, certificates of reorganization, amended articles, 64
and amendments to any of these, and, in the case of a corporation 65
created before September 1, 1851, the special charter and any 66
amendments to it made by special act of the general assembly or 67
pursuant to general law. 68
(E) "Incorporator" means a person who signed the original 70
articles of incorporation. 71
(F) "Shareholder" means a person whose name appears on the 73
books of the corporation as the owner of shares of such 74
corporation. Unless the articles, the regulations, or the 75
contract of subscription otherwise provides, "shareholder" 76
includes a subscriber to shares, whether the subscription is 77
received by the incorporators or pursuant to authorization by the 78
directors, and such shares shall be deemed to be outstanding 79
shares. 80
(G) "Person" includes, without limitation, a natural 82
person, a corporation, whether nonprofit or for profit, a 83
partnership, a limited liability company, an unincorporated 84
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society or association, and two or more persons having a joint or 85
common interest. 86
(H) The location of the "principal office" of a 88
corporation is the place named as the principal office in its 89
articles.
(I) The "express terms" of shares of a class are the 91
statements expressed in the articles with respect to such shares. 92
(J) Shares of a class are "junior" to shares of another 94
class when any of their dividend or distribution rights are 95
subordinate to, or dependent or contingent upon, any right of, or 96
dividend on, or distribution to, shares of such other class. 97
(K) "Treasury shares" means shares belonging to the 99
corporation and not retired that have been either issued and 100
thereafter acquired by the corporation or paid as a dividend or 101
distribution in shares of the corporation on treasury shares of 102
the same class; such shares shall be deemed to be issued, but 103
they shall not be considered as an asset or a liability of the 104
corporation, or as outstanding for dividend or distribution, 105
quorum, voting, or other purposes, except, when authorized by the 106
directors, for dividends or distributions in authorized but 107
unissued shares of the corporation of the same class. 108
(L) To "retire" a share means to restore it to the status 110
of an authorized but unissued share. 111
(M) "Redemption price of shares" means the amount required 113
by the articles to be paid on redemption of shares. 114
(N) "Liquidation price" means the amount or portion of 116
assets required by the articles to be distributed to the holders 117
of shares of any class upon dissolution, liquidation, merger, or 118
consolidation of the corporation, or upon sale of all or 119
substantially all of its assets. 120
(O) "Insolvent" means that the corporation is unable to 122
pay its obligations as they become due in the usual course of its 123
affairs. 124
(P) "Parent corporation" or "parent" means a domestic or 126
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foreign corporation that owns and holds of record shares of 128
another corporation, domestic or foreign, entitling the holder of 129
the shares at the time to exercise a majority of the voting power 130
in the election of the directors of the other corporation without 131
regard to voting power that may thereafter exist upon a default, 133
failure, or other contingency; "subsidiary corporation" or 134
"subsidiary" means a domestic or foreign corporation of which 135
another corporation, domestic or foreign, is the parent. 136
(Q) "Combination" means a transaction, other than a merger 138
or consolidation, wherein either of the following applies: 139
(1) Voting shares of a domestic corporation are issued or 141
transferred in consideration in whole or in part for the transfer 142
to itself or to one or more of its subsidiaries, domestic or 143
foreign, of all or substantially all the assets of one or more 144
corporations, domestic or foreign, with or without good will or 145
the assumption of liabilities; 146
(2) Voting shares of a foreign parent corporation are 148
issued or transferred in consideration in whole or in part for 149
the transfer of such assets to one or more of its domestic 150
subsidiaries. 151
"Transferee corporation" in a combination means the 153
corporation, domestic or foreign, to which the assets are 154
transferred, and "transferor corporation" in a combination means 155
the corporation, domestic or foreign, transferring such assets 156
and to which, or to the shareholders of which, the voting shares 157
of the domestic or foreign corporation are issued or transferred. 158
(R) "Majority share acquisition" means the acquisition of 160
shares of a corporation, domestic or foreign, entitling the 161
holder of the shares to exercise a majority of the voting power 162
in the election of directors of such corporation without regard 163
to voting power that may thereafter exist upon a default, 164
failure, or other contingency, by either of the following: 165
(1) A domestic corporation in consideration in whole or in 167
part, for the issuance or transfer of its voting shares; 168
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(2) A domestic or foreign subsidiary in consideration in 170
whole or in part for the issuance or transfer of voting shares of 171
its domestic parent. 172
(S) "Acquiring corporation" in a combination means the 174
domestic corporation whose voting shares are issued or 175
transferred by it or its subsidiary or subsidiaries to the 176
transferor corporation or corporations or the shareholders of the 177
transferor corporation or corporations; and "acquiring 178
corporation" in a majority share acquisition means the domestic 179
corporation whose voting shares are issued or transferred by it 180
or its subsidiary in consideration for shares of a domestic or 181
foreign corporation entitling the holder of the shares to 182
exercise a majority of the voting power in the election of 183
directors of such corporation. 184
(T) When used in connection with a combination or a 186
majority share acquisition, "voting shares" means shares of a 187
corporation, domestic or foreign, entitling the holder of the 188
shares to vote at the time in the election of directors of such 189
corporation without regard to voting power which may thereafter 190
exist upon a default, failure, or other contingency. 191
(U) "An emergency" exists when the governor, or any other 193
person lawfully exercising the power and discharging the duties 194
of the office of governor, proclaims that an attack on the United 195
States or any nuclear, atomic, or other disaster has caused an 196
emergency for corporations, and such an emergency shall continue 197
until terminated by proclamation of the governor or any other 198
person lawfully exercising the powers and discharging the duties 199
of the office of governor. 200
(V) "Constituent corporation" means an existing 202
corporation merging into or into which is being merged one or 203
more other entities in a merger or an existing corporation being 205
consolidated with one or more other entities into a new entity in 206
a consolidation, whether any of the entities is domestic or 207
foreign, and "constituent entity" means any entity merging into
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or into which is being merged one or more other entities in a 208
merger, or an existing entity being consolidated with one or more 209
other entities into a new entity in a consolidation, whether any 210
of the entities is domestic or foreign. 211
(W) "Surviving corporation" means the constituent domestic 214
or foreign corporation that is specified as the corporation into 215
which one or more other constituent entities are to be or have 216
been merged, and "surviving entity" means the constituent
domestic or foreign entity that is specified as the entity into 217
which one or more other constituent entities are to be or have 218
been merged.
(X) "Close corporation agreement" means an agreement that 220
satisfies the three requirements of division (A) of section 221
1701.591 of the Revised Code. 222
(Y) "Issuing public corporation" means a domestic 224
corporation with fifty or more shareholders that has its 225
principal place of business, its principal executive offices, 226
assets having substantial value, or a substantial percentage of 227
its assets within this state, and as to which no valid close 228
corporation agreement exists under division (H) of section 229
1701.591 of the Revised Code. 230
(Z)(1) "Control share acquisition" means the acquisition, 232
directly or indirectly, by any person of shares of an issuing 233
public corporation that, when added to all other shares of the 234
issuing public corporation in respect of which such person may 235
exercise or direct the exercise of voting power as provided in 236
this division, would entitle such person, immediately after such 237
acquisition, directly or indirectly, alone or with others, to 238
exercise or direct the exercise of the voting power of the 239
issuing public corporation in the election of directors within 240
any of the following ranges of such voting power: 241
(a) One-fifth or more but less than one-third of such 243
voting power; 244
(b) One-third or more but less than a majority of such 246
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voting power; 247
(c) A majority or more of such voting power. 249
A bank, broker, nominee, trustee, or other person who 251
acquires shares in the ordinary course of business for the 252
benefit of others in good faith and not for the purpose of 253
circumventing section 1701.831 of the Revised Code shall, 254
however, be deemed to have voting power only of shares in respect 255
of which such person would be able, without further instructions 256
from others, to exercise or direct the exercise of votes on a 257
proposed control share acquisition at a meeting of shareholders 258
called under section 1701.831 of the Revised Code. 259
(2) The acquisition by any person of any shares of an 261
issuing public corporation does not constitute a control share 262
acquisition for the purpose of section 1701.831 of the Revised 263
Code if the acquisition was or is consummated in, results from, 264
or is the consequence of any of the following circumstances: 265
(a) Prior to November 19, 1982; 267
(b) Pursuant to a contract existing prior to November 19, 269
1982; 270
(c) By bequest or inheritance, by operation of law upon 272
the death of an individual, or by any other transfer without 273
valuable consideration, including a gift, that is made in good 274
faith and not for the purpose of circumventing section 1701.831 275
of the Revised Code; 276
(d) Pursuant to the satisfaction of a pledge or other 278
security interest created in good faith and not for the purpose 279
of circumventing section 1701.831 of the Revised Code; 280
(e) Pursuant to a merger or consolidation adopted, or a 282
combination or majority share acquisition authorized, by 283
shareholder vote in compliance with section 1701.78, 1701.781, or 285
1701.83 of the Revised Code provided the issuing public 286
corporation is the surviving or new corporation in the merger or 287
consolidation or is the acquiring corporation in the combination 288
or majority share acquisition;
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(f) The person's being entitled, immediately thereafter, 290
to exercise or direct the exercise of voting power of the issuing 291
public corporation in the election of directors within the same 292
range theretofore attained by that person either in compliance 293
with the provisions of section 1701.831 of the Revised Code or as 294
a result solely of the issuing public corporation's purchase of 295
shares issued by it. 296
The acquisition by any person of shares of an issuing 298
public corporation in a manner described under division (Z)(2) of 299
this section shall be deemed a control share acquisition 300
authorized pursuant to section 1701.831 of the Revised Code 301
within the range of voting power under division (Z)(1)(a), (b), 302
or (c) of this section that such person is entitled to exercise 303
after such acquisition, provided, in the case of an acquisition 304
in a manner described under division (Z)(2)(c) or (d) of this 305
section, the transferor of shares to such person had previously 306
obtained any authorization of shareholders required under section 307
1701.831 of the Revised Code in connection with such transferor's 308
acquisition of shares of the issuing public corporation. 309
(3) The acquisition of shares of an issuing public 311
corporation in good faith and not for the purpose of 312
circumventing section 1701.831 of the Revised Code from any 313
person whose control share acquisition previously had been 314
authorized by shareholders in compliance with section 1701.831 of 315
the Revised Code, or from any person whose previous acquisition 316
of shares of an issuing public corporation would have constituted 317
a control share acquisition but for division (Z)(2) or (3) of 318
this section, does not constitute a control share acquisition for 319
the purpose of section 1701.831 of the Revised Code unless such 320
acquisition entitles the person making the acquisition, directly 321
or indirectly, alone or with others, to exercise or direct the 322
exercise of voting power of the corporation in the election of 323
directors in excess of the range of such voting power authorized 324
pursuant to section 1701.831 of the Revised Code, or deemed to be 325
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so authorized under division (Z)(2) of this section. 326
(AA) "Acquiring person" means any person who has delivered 328
an acquiring person statement to an issuing public corporation 329
pursuant to section 1701.831 of the Revised Code. 330
(BB) "Acquiring person statement" means a written 332
statement that complies with division (B) of section 1701.831 of 333
the Revised Code. 334
(CC)(1) "Interested shares" means the shares of an issuing 336
public corporation in respect of which any of the following 337
persons may exercise or direct the exercise of the voting power 338
of the corporation in the election of directors: 339
(a) An acquiring person; 341
(b) Any officer of the issuing public corporation elected 343
or appointed by the directors of the issuing public corporation; 344
(c) Any employee of the issuing public corporation who is 346
also a director of such corporation; 347
(d) Any person that acquires such shares for valuable 349
consideration during the period beginning with the date of the 351
first public disclosure of a proposed control share acquisition 352
of the issuing public corporation or any proposed merger, 353
consolidation, or other transaction that would result in a change 355
in control of the corporation or all or substantially all of its 356
assets, and ending on the record date established by the 357
directors pursuant to section 1701.45 and division (D) of section 358
1701.831 of the Revised Code, if either of the following applies: 359
(i) The aggregate consideration paid or given by the 361
person who acquired the shares, and any other persons acting in 362
concert with the person, for all such shares exceeds two hundred 364
fifty thousand dollars;
(ii) The number of shares acquired by the person who 366
acquired the shares, and any other persons acting in concert with 367
the person, exceeds one-half of one per cent of the outstanding 369
shares of the corporation entitled to vote in the election of 370
directors.
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(e) Any person that transfers such shares for valuable 372
consideration after the record date described in division 373
(CC)(1)(d) of this section as to shares so transferred, if 375
accompanied by the voting power in the form of a blank proxy, an 376
agreement to vote as instructed by the transferee, or otherwise.
(2) If any part of this division is held to be illegal or 378
invalid in application, the illegality or invalidity does not 379
affect any legal and valid application thereof or any other 380
provision or application of this division or section 1701.831 of 381
the Revised Code that can be given effect without the invalid or 383
illegal provision, and the parts and applications of this 384
division are severable. 385
(DD) "Certificated security" and "uncertificated security" 387
have the same meanings as in section 1308.01 of the Revised Code. 388
(EE) "Entity" means any of the following: 390
(1) A for profit corporation existing under the laws of 392
this state or any other state; 393
(2) Any of the following organizations existing under the 395
laws of this state, the United States, or any other state: 396
(a) A business trust or association; 398
(b) A real estate investment trust; 400
(c) A common law trust; 402
(d) An unincorporated business or for profit organization, 404
including a general or limited partnership; 405
(e) A limited liability company; 407
(f) A NONPROFIT CORPORATION. 409
Sec. 1702.01. As used in this chapter, unless the context 419
otherwise requires: 420
(A) "Corporation" or "domestic corporation" means a 422
nonprofit corporation formed under the laws of this state, or a 423
BUSINESS corporation for profit formed under the laws of this 424
state that, by amendment to its articles as provided by law, 426
becomes a nonprofit corporation. 427
(B) "Foreign corporation" means a nonprofit corporation 429
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formed under the laws of another state. 430
(C) "Nonprofit corporation" means a DOMESTIC OR FOREIGN 432
corporation that is not formed OTHERWISE THAN for the pecuniary 434
gain or profit of, and whose net earnings or any part of them is 436
not distributable to, its members, trustees DIRECTORS, officers, 437
or other private persons, except that the payment of reasonable 439
compensation for services rendered and the distribution of assets 440
on dissolution as permitted by section 1702.49 of the Revised 441
Code is not pecuniary gain or profit or distribution of net 442
earnings. In a corporation all of whose members are nonprofit 443
corporations, distribution to members does not deprive it of the 444
status of a nonprofit corporation.
(D) "Charitable corporation" means a corporation organized 446
and operated exclusively for religious, charitable, scientific, 447
testing for public safety, literary, or educational purposes, 448
exclusively for the prevention of cruelty to children or animals, 449
or exclusively for a home for the aged, as defined in section 450
5701.13 of the Revised Code. 451
(E) "State" means the United States; any state, territory, 453
insular possession, or other political subdivision of the United 454
States, including the District of Columbia; any foreign country 455
or nation; and any province, territory, or other political 456
subdivision of a foreign country or nation. 457
(F)(E) "Articles" includes original articles of 459
incorporation, agreements of merger or consolidation IF AND ONLY 460
TO THE EXTENT THAT ARTICLES OF INCORPORATION ARE ADOPTED OR 461
AMENDED IN THE AGREEMENTS, amended articles, and amendments to 463
any of these, and, in the case of a corporation created before 464
September 1, 1851, the special charter and any amendments to it 465
made by special act of the General Assembly or pursuant to 466
general law.
(G)(F) "Incorporator" means a person who signed the 468
original articles of incorporation. 469
(H)(G) "Member" means one having membership rights and 471
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privileges in a corporation in accordance with its articles or 472
regulations. 473
(I)(H) "Voting member" means a member possessing voting 475
rights, either generally or in respect of the particular question 476
involved, as the case may be. 477
(J)(I) "Person" includes, but is not limited to, a 479
nonprofit corporation, a BUSINESS corporation for profit), a 480
partnership, an unincorporated society or association, and two or 481
more persons having a joint or common interest. 482
(J)(K) The location of the "principal office" of a 484
corporation is the place named as such in its articles. 485
(L)(K) "Trustees DIRECTORS" means the persons vested with 488
the authority to conduct the affairs of the corporation 489
irrespective of the name, SUCH AS TRUSTEES, by which they are 490
designated.
(M)(L) "Insolvent" means that the corporation is unable to 492
pay its obligations as they become due in the usual course of its 493
affairs. 494
(N)(M)(1) Subject to division (N)(M)(2) of this section, 497
"volunteer" means a trustee DIRECTOR, officer, or agent of a 498
nonprofit corporation, or another person associated with a 499
nonprofit corporation, who satisfies both of the following: 500
(a) Performs services for or on behalf of, and under the 502
authority or auspices of, that corporation; 503
(b) Does not receive compensation, either directly or 505
indirectly, for performing those services. 506
(2) For purposes of division (N)(M)(1) of this section, 508
"compensation" does not include any of the following: 509
(a) Actual and necessary expenses that are incurred by a 511
volunteer in connection with the services performed for a 512
nonprofit corporation, and that are reimbursed to the volunteer 513
or otherwise paid; 514
(b) Insurance premiums paid on behalf of a volunteer, and 516
amounts paid or reimbursed, pursuant to division (E) of section 517
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1702.12 of the Revised Code; 518
(c) Modest perquisites. 520
(N) "BUSINESS CORPORATION" MEANS ANY ENTITY, AS DEFINED IN 522
SECTION 1701.01 OF THE REVISED CODE, OTHER THAN A PUBLIC BENEFIT 523
CORPORATION OR A MUTUAL BENEFIT CORPORATION, THAT IS ORGANIZED 524
PURSUANT TO CHAPTER 1701. OF THE REVISED CODE. 525
(O) "MUTUAL BENEFIT CORPORATION" MEANS ANY CORPORATION 527
ORGANIZED UNDER THIS CHAPTER OTHER THAN A PUBLIC BENEFIT 529
CORPORATION.
(P) "PUBLIC BENEFIT CORPORATION" MEANS A CORPORATION THAT 531
IS RECOGNIZED AS EXEMPT FROM FEDERAL INCOME TAXATION UNDER 533
SECTION 501(c)(3) OF THE "INTERNAL REVENUE CODE OF 1986," 100 535
STAT. 2085, 26 U.S.C. 1, AS AMENDED, OR IS ORGANIZED FOR A PUBLIC 537
OR CHARITABLE PURPOSE AND THAT UPON DISSOLUTION MUST DISTRIBUTE 538
ITS ASSETS TO A PUBLIC BENEFIT CORPORATION, THE UNITED STATES, A 539
STATE OR ANY POLITICAL SUBDIVISION OF A STATE, OR A PERSON THAT 540
IS RECOGNIZED AS EXEMPT FROM FEDERAL INCOME TAXATION UNDER 541
SECTION 501(c)(3) OF THE "INTERNAL REVENUE CODE OF 1986," AS 545
AMENDED. "PUBLIC BENEFIT CORPORATION" DOES NOT INCLUDE A 546
NONPROFIT CORPORATION THAT IS ORGANIZED BY ONE OR MORE MUNICIPAL
CORPORATIONS TO FURTHER A PUBLIC PURPOSE THAT IS NOT A CHARITABLE 547
PURPOSE.
Sec. 1702.02. (A) UNLESS ANOTHER FORM OF NOTICE IS 557
REQUIRED BY THE ARTICLES, THE REGULATIONS, THE BYLAWS, OR BY 560
APPLICABLE LAW, ANY NOTICE REQUIRED BY THIS CHAPTER SHALL BE IN 562
WRITING AND SHALL BE DELIVERED PERSONALLY OR SENT BY TELEGRAM, 563
TELECOPY, OR ELECTRONIC MAIL TRANSMISSION OR BY UNITED STATES 564
MAIL, EXPRESS MAIL, OR COURIER SERVICE, WITH POSTAGE OR FEES 566
PREPAID.
(B) In computing the period of time for the giving of a 568
notice required or permitted under sections 1702.01 to 1702.58, 569
inclusive, of the Revised Code THIS CHAPTER, or under the 570
articles, the regulations, or the bylaws of a corporation, or a 572
resolution of its members or trustees DIRECTORS, the day on which 573
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the notice is given shall be excluded, and the day when the act 574
for which notice is given is to be done shall be included, unless 575
the instrument calling for the notice otherwise provides. If 576
notice is permitted to be given by PERSONAL DELIVERY OR 577
TRANSMITTED BY TELEGRAM, TELECOPY, OR ELECTRONIC mail, the notice 579
shall be deemed to have been given when DELIVERED OR TRANSMITTED. 580
IF NOTICE IS SENT BY UNITED STATES MAIL, EXPRESS MAIL, OR COURIER 581
SERVICE, THE NOTICE SHALL BE DEEMED TO HAVE BEEN GIVEN WHEN 582
deposited in the mail OR WITH THE COURIER SERVICE.
(C) A WRITTEN NOTICE OR REPORT DELIVERED AS PART OF A 584
NEWSLETTER, MAGAZINE, OR OTHER PUBLICATION REGULARLY SENT TO 586
MEMBERS SHALL CONSTITUTE A WRITTEN NOTICE OR REPORT IF ADDRESSED 587
OR DELIVERED TO THE MEMBER'S ADDRESS SHOWN IN THE CORPORATION'S 588
CURRENT LIST OF MEMBERS, OR, IN THE CASE OF MEMBERS WHO ARE 589
RESIDENTS OF THE SAME HOUSEHOLD AND WHO HAVE THE SAME ADDRESS IN 590
THE CORPORATION'S CURRENT LIST OF MEMBERS, IF ADDRESSED OR 591
DELIVERED TO ONE OF SUCH MEMBERS AT THE ADDRESS APPEARING ON THE 592
CORPORATION'S CURRENT LIST OF MEMBERS. 593
Sec. 1702.03. A corporation may be formed UNDER THIS 602
CHAPTER for any purpose or purposes for which natural persons 604
lawfully may associate themselves, provided EXCEPT that when 605
there is a special provision in the Revised Code for the 606
formation thereunder of a designated class of corporations, a 607
corporation of such class shall be formed thereunder. 608
Sec. 1702.04. (A) Any person, singly or jointly with 617
others, and without regard to residence, domicile, or state of 618
incorporation, may form a corporation by signing and filing with 619
the secretary of state articles of incorporation, which shall set 620
forth the following: 621
(1) The name of the corporation; 623
(2) The place in this state where the principal office of 625
the corporation is to be located; 626
(3) The purpose or purposes for which the corporation is 628
formed; 629
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(4) The names and addresses of not less than three natural 631
persons who are to be initial trustees. 632
(B) The articles also may set forth the following: 634
(1) THE NAMES OF INDIVIDUALS WHO ARE TO SERVE AS THE 636
INITIAL DIRECTORS;
(2) The names of any persons or the designation of any 638
group of persons who are to be the initial members; 639
(2)(3) Any qualification of membership and the 641
classification of members; 642
(3)(4) A provision to the effect that the corporation 644
shall be subordinate to and subject to the authority of any head 645
or national association, lodge, order, beneficial association, 646
fraternal or beneficial society, foundation, federation, or any 647
other nonprofit corporation, society, organization, or 648
association; 649
(4)(5) Any lawful provision for the purpose of defining, 651
limiting, or regulating the exercise of the authority of the 652
corporation, the incorporators, the trustees DIRECTORS, the 653
officers, the members, or any class of members, or creating or 655
defining rights and privileges of the members among themselves or 656
in the property of the corporation, or governing the distribution 657
of assets on dissolution; 658
(5)(6) Any provision which THAT may be set forth in the 661
regulations; 662
(6)(7) A provision specifying the period of existence of 664
the corporation if it is to be otherwise than perpetual; 665
(7)(8) Any additional provision permitted by this chapter. 667
(C) A written appointment of a statutory agent for the 669
purposes set forth in section 1702.06 of the Revised Code shall 670
be filed with the articles, unless the corporation belongs to one 671
of the classes mentioned in division (N) of that section. 672
(D) The legal existence of the corporation shall begin 674
upon the filing of the articles, and, unless the articles 675
otherwise provide, its period of existence shall be perpetual. 676
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Sec. 1702.05. (A) Except as provided in this section and 685
in sections 1702.41 and 1702.45 of the Revised Code, the 686
secretary of state shall not accept for filing in the secretary 687
of state's office any articles if the corporate name set forth in 689
the articles is not distinguishable upon the secretary of state's 690
records from any of the following: 691
(1) The name of any other corporation, whether A nonprofit 693
CORPORATION or for profit A BUSINESS CORPORATION and whether that 695
of a domestic or of a foreign corporation authorized to do 696
business in this state;
(2) The name of any limited liability company registered 698
in the office of the secretary of state pursuant to Chapter 1705. 699
of the Revised Code, whether domestic or foreign; 700
(3) The name of any limited liability partnership 702
registered in the office of the secretary of state pursuant to 703
Chapter 1775. of the Revised Code, whether domestic or foreign; 706
(4) The name of any limited partnership registered in the 708
office of the secretary of state pursuant to Chapter 1782. of the 710
Revised Code, whether domestic or foreign; 712
(5) Any trade name, the exclusive right to which is at the 715
time in question registered in the office of the secretary of 716
state pursuant to Chapter 1329. of the Revised Code. 717
(B) The secretary of state shall determine for purposes of 719
this section whether a name is "distinguishable" from another 720
name upon the secretary of state's records. Without excluding 722
other names that may not constitute distinguishable names in this 723
state, a name is not considered distinguishable from another name 724
for purposes of this section solely because it differs from the 725
other name in only one or more of the following manners: 726
(1) The use of the word "corporation," "company," 728
"incorporated," "limited," or any abbreviation of any of those 730
words; 731
(2) The use of any article, conjunction, contraction, 733
abbreviation, or punctuation; 734
17
(3) The use of a different tense or number of the same 736
word. 737
(C) A corporation may apply to the secretary of state for 739
authorization to use a name that is not distinguishable upon the 740
secretary of state's records from the name of any other 741
corporation, any limited liability company, limited liability 742
partnership, or limited partnership, or from a registered trade 744
name, if there also is filed in the office of the secretary of 745
state, on a form prescribed by the secretary of state, the 746
consent of the other entity, or, in the case of a registered 747
trade name, the person in whose name is registered the exclusive 749
right to use the name, which consent is evidenced in a writing 750
signed by any authorized officer or authorized representative of 752
the other entity or person.
(D) In case of judicial sale or judicial transfer, by sale 754
or transfer of good will or otherwise, of the right to use the 755
name of a nonprofit corporation or BUSINESS corporation for 756
profit, whether that of a domestic corporation or of a foreign 758
corporation authorized to exercise its corporate privileges in 759
this state or to do business in this state, the secretary of 760
state, at the instance of the purchaser or transferee of such 761
right, shall accept for filing articles of a corporation with a 762
name the same as or similar to the name of such other 763
corporation, if there also is filed in the office of the 764
secretary of state a certified copy of the decree or order of 765
court confirming or otherwise evidencing the purchase or 766
transfer. 767
(E) Any person who wishes to reserve a name for a proposed 769
new corporation, or any corporation intending to change its name, 770
may submit to the secretary of state a written application, on a 771
form prescribed by the secretary of state, for the exclusive 772
right to use a specified name as the name of a corporation. If 774
the secretary of state finds that, under this section, the 775
specified name is available for such use, the secretary of state 776
18
shall file such application, and, from the date of such filing, 778
such applicant shall have the exclusive right for sixty days to 780
use the specified name as the name of a corporation, counting the 781
date of such filing as the first of the sixty days. The right so 783
obtained may be transferred by the applicant or other holder of 784
the right by the filing in the office of the secretary of state 785
of a written transfer, on a form prescribed by the secretary of 786
state, stating the name and address of the transferee. 788
(F) For filing under this section any application or other 790
document, other than articles or a consent to the use of a name, 791
the secretary of state shall charge and collect a fee of five 792
dollars. 793
Sec. 1702.06. (A) Every corporation shall have and 802
maintain an agent, sometimes referred to as the "statutory 803
agent," upon whom any process, notice, or demand required or 804
permitted by statute to be served upon a corporation may be 805
served. The agent may be a natural person who is a resident of 806
this state, or may be a domestic OR FOREIGN BUSINESS corporation 807
for profit or a foreign corporation for profit holding a license 809
as such under the laws of this state that is authorized by its 810
articles of incorporation to act as such agent, and that has a 811
business address in this state. 812
(B) The secretary of state shall not accept original 814
articles for filing unless there is filed with the articles a 815
written appointment of an agent signed by the incorporators of 816
the corporation or a majority of them and a written acceptance of 817
the appointment signed by the agent. In all other cases, the 818
corporation shall appoint the agent and shall file in the office 819
of the secretary of state a written appointment of the agent that 820
is signed by any authorized officer of the corporation and a 821
written acceptance of the appointment that is either the original 822
acceptance signed by the agent or a photocopy, facsimile, or 824
similar reproduction of the original acceptance signed by the
agent. 825
19
(C) The written appointment of an agent shall set forth 827
the name and address in this state of the agent, including the 828
street and number or other particular description, and shall 829
otherwise be in such form as the secretary of state prescribes. 830
The secretary of state shall keep a record of the names of 831
corporations and the names and addresses of their respective 832
agents. 833
(D) If any agent dies, removes from the state, or resigns, 835
the corporation shall forthwith appoint another agent and file 836
with the secretary of state, on a form prescribed by the 837
secretary of state, a written appointment of such THAT agent. 838
(E) If the agent changes the agent's address from that 840
appearing upon the record in the office of the secretary of 841
state, the corporation or the agent shall forthwith file with the 842
secretary of state, on a form prescribed by the secretary of 844
state, a written statement setting forth the new address. 845
(F) An agent may resign by filing with the secretary of 847
state, on a form prescribed by the secretary of state, a written 849
notice to that effect that is signed by the agent and by sending 850
a copy of the notice to the corporation at the current or last 851
known address of its principal office on or prior to the date 852
that notice is filed with the secretary of state. The notice 853
shall set forth the name of the corporation, the name and current 854
address of the agent, the current or last known address, 855
including the street and number or other particular description, 856
of the corporation's principal office, the resignation of the 857
agent, and a statement that a copy of the notice has been sent to 858
the corporation within the time and in the manner prescribed by 859
this division. Upon the expiration of sixty days after such 860
filing, the authority of the agent shall terminate. 861
(G) A corporation may revoke the appointment of an agent 863
by filing with the secretary of state, on a form prescribed by 864
the secretary of state, a written appointment of another agent 866
and a statement that the appointment of the former agent is 867
20
revoked.
(H) Any process, notice, or demand required or permitted 869
by statute to be served upon a corporation may be served upon the 870
corporation by delivering a copy of it to its agent, if a natural 871
person, or by delivering a copy of it at the address of its agent 872
in this state, as such address appears upon the record in the 873
office of the secretary of state. If (1) the agent cannot be 874
found, or (2) the agent no longer has that address, or (3) the 875
corporation has failed to maintain an agent as required by this 876
section, and if in any such case the party desiring that such 877
process, notice, or demand be served, or the agent or 878
representative of the party, shall have filed with the secretary 879
of state an affidavit stating that one of the foregoing 880
conditions exists and stating the most recent address of the 881
corporation which THAT the party after diligent search has been 882
able to ascertain, then service of process, notice, or demand 884
upon the secretary of state, as the agent of the corporation, may 885
be initiated by delivering to the secretary of state or at the 887
secretary of state's office triplicate copies of such process, 888
notice, or demand and by paying to the secretary of state a fee 889
of five dollars. The secretary of state shall forthwith give 890
notice of such delivery to the corporation at its principal 891
office as shown upon the record in the secretary of state's 892
office and also to the corporation at any different address set 894
forth in the above mentioned affidavit, and shall forward to the 895
corporation at each of said THOSE addresses, by certified mail, 897
with request for return receipt, a copy of such process, notice, 898
or demand; and thereupon service upon the corporation shall be 899
deemed to have been made.
(I) The secretary of state shall keep a record of each 901
process, notice, and demand delivered to the secretary of state 903
or at the secretary of state's office under this section or any 904
other law of this state which THAT authorizes service upon the 905
secretary of state, and shall record the time of such delivery 907
21
and the secretary of state's action thereafter with respect 908
thereto.
(J) This section does not limit or affect the right to 910
serve any process, notice, or demand upon a corporation in any 911
other manner permitted by law. 912
(K) Except when an original appointment of an agent is 914
filed with the original articles, a written appointment of an 915
agent or a written statement filed by a corporation with the 916
secretary of state shall be signed by any authorized officer of 917
the corporation or by the incorporators of the corporation or a 918
majority of them if no trustees DIRECTORS have been elected. 919
(L) For filing a written appointment of an agent other 921
than one filed with original articles, and for filing a statement 922
of change of address of an agent, the secretary of state shall 923
charge and collect a fee of three dollars. 924
(M) Upon the failure of any corporation to appoint another 926
agent or to file a statement of change of address of an agent, 927
the secretary of state shall give notice thereof by certified 928
mail to the corporation at the address set forth in the notice of 929
registration RESIGNATION or on the most recent statement of 930
continued existence filed in this state by the corporation. 932
Unless the failure is cured within thirty days after the mailing 933
by the secretary of state of the notice or within any further 934
period the secretary of state grants, upon the expiration of that 935
period from the date of the mailing, the articles of the 936
corporation shall be canceled without further notice or action by 937
the secretary of state. The secretary of state shall make a 938
notation of the cancellation on the secretary of state's records. 939
A corporation whose articles have been canceled may be reinstated 941
by filing, on a form prescribed by the secretary of state, an 942
application for reinstatement and the required appointment of 943
agent or required statement, and by paying a filing fee of ten 944
dollars. The rights, privileges, and franchises of a corporation 945
whose articles have been reinstated are subject to section 946
22
1702.60 of the Revised Code. The secretary of state shall 947
furnish the tax commissioner a monthly list of all corporations 948
canceled and reinstated under this division. 949
(N) This section does not apply to banks, trust companies, 951
insurance companies, or any corporation defined under the laws of 952
this state as a public utility for taxation purposes. 953
Sec. 1702.07. (A) When articles of incorporation and 962
other certificates relating to the corporation are submitted to 963
the secretary of state, the secretary of state shall, after 966
finding that they comply with the provisions of sections 1702.01 967
to 1702.58 of the Revised Code THIS CHAPTER, accept the articles 968
and other certificates for filing and make a copy of the articles 970
and other certificates by microfilm or by any authorized 972
photostatic or digitized process. Evidence of the filing shall 974
be returned to the person filing the articles or certificate. 975
(B) All persons shall have the opportunity of acquiring 977
knowledge of the contents of the articles and other certificates 978
filed and recorded in the office of the secretary of state, but 979
no person dealing with the corporation shall be charged with 980
constructive notice of the contents of any such articles or 981
certificates by reason of such filing or recording.
Sec. 1702.08. (A) When an unincorporated society or 990
association, organized for any of the purposes for which a 991
corporation could be formed under sections 1702.01 to 1702.58, 993
inclusive, of the Revised Code THIS CHAPTER, authorizes the 994
incorporation of such society or association, by the same 995
procedure and affirmative vote of its voting members as the 996
regulations, constitution, or other fundamental agreement of such 997
society or association requires for an amendment to such 998
fundamental agreement or, if no such vote is specified, by a
majority vote of the voting members present IN PERSON OR, IF 999
PERMITTED, BY MAIL OR BY PROXY, at a duly convened meeting the 1,000
purpose of which is stated in the notice of the meeting, then 1,001
upon the filing of the articles under section 1702.04 of the 1,002
23
Revised Code setting forth such facts and that such required vote 1,003
has been obtained, such society or association shall become a 1,004
corporation and the members of such society or association shall 1,005
become members of such corporation in accordance with provisions 1,006
in the articles to that effect.
(B) All the rights, privileges, immunities, powers, 1,008
franchises, and authority, and all the property and obligations 1,010
of such unincorporated society or association shall thereupon 1,011
pass to, vest in, and (in the case of liabilities and 1,012
obligations) be obligations of the corporation so formed.
Sec. 1702.10. After the articles have been filed and at 1,021
any time prior to a meeting of voting members, the incorporators 1,022
or a majority of them, at a meeting, may adopt regulations for 1,023
the government of the corporation, the conduct of its affairs, 1,024
and the management of its property, consistent with law and the 1,025
articles; may elect trustees DIRECTORS in addition to those ANY 1,026
DIRECTORS named in the articles; and may also elect members in 1,027
addition to any named or provided for in the articles. If the 1,028
incorporators fail to adopt regulations as herein authorized BY 1,030
THIS SECTION WITHIN NINETY DAYS AFTER THE DATE OF INCORPORATION, 1,031
regulations may be adopted at a meeting of voting members by the 1,032
affirmative vote of a majority of the voting members.
Sec. 1702.11. (A) Without limiting the generality of such 1,041
authority, the regulations, whether designated a constitution or 1,042
rules, or by some other term, may include provisions with respect 1,043
to the following: 1,044
(1) The time and place for holding, the manner of and 1,046
authority for calling, giving notice of, and conducting, and the 1,047
requirements of a quorum for, meetings of members, or their 1,048
elected representatives or delegates; 1,049
(2) The qualifications, admission, voluntary withdrawal, 1,051
censure, and suspension of members, and the termination of 1,052
membership; 1,053
(3) The fees and dues of members; 1,055
24
(4) The rights of members, or classes of members, or of 1,057
their elected representatives or delegates, to vote; the manner 1,058
of conducting votes of members on matters, INCLUDING ANY RIGHT TO 1,059
VOTE BY MAIL OR BY PROXY; the specification of their THE relative 1,061
rights and privileges among themselves MEMBERS and in the 1,062
property of the corporation; and, in the case of charitable 1,063
corporations, limitations upon or regulations governing their THE 1,065
right OF MEMBERS to examine the books and records of the 1,066
corporation;
(5) The election of representatives or delegates OF 1,068
MEMBERS and their authority, rights, and privileges; 1,069
(6) The number, classification, manner of fixing or 1,071
changing the number, qualifications, term of office, voting 1,072
rights, compensation or manner of fixing compensation, and the 1,073
removal of trustees DIRECTORS; 1,074
(7) The time and place for holding, the manner of and 1,076
authority for calling, giving notice of, and conducting, and the 1,077
requirements of a quorum for, meetings of the trustees DIRECTORS; 1,079
(8) The appointment of an executive and other committees 1,081
of the trustees DIRECTORS or of members, and their authority, AND 1,083
THE METHOD BY WHICH THEY TAKE ACTION;
(9) The titles, qualifications, duties, term of office, 1,085
compensation or manner of fixing compensation, and the removal, 1,086
of officers; 1,087
(10) Defining, limiting, or regulating the exercise of the 1,089
authority of the corporation, the trustees DIRECTORS, the 1,090
officers, the members, or any class of members; 1,092
(11) The method by which voting members may change the 1,094
regulations. 1,095
(B) In the absence of provisions in the articles or the 1,097
regulations with respect to the method of changing the 1,098
regulations, the regulations may be amended, or new regulations 1,099
may be adopted, by the voting members at a meeting held for such 1,100
purpose, by the affirmative vote of a majority of the voting 1,101
25
members present IN PERSON OR, IF PERMITTED, BY MAIL OR BY PROXY, 1,102
if a quorum is present. 1,103
(C) The members of a nonprofit corporation may adopt or 1,105
authorize the trustees DIRECTORS to adopt, either before or 1,106
during an emergency, as defined in division (U) of section 1,108
1701.01 of the Revised Code, emergency regulations operative only 1,109
during an emergency. The emergency regulations may include such 1,110
provisions as are authorized to be included in regulations by 1,111
divisions (A) and (B) of this section. In addition, unless 1,112
expressly prohibited by the articles or regulations, and 1,113
notwithstanding any different provisions in this chapter and any 1,114
different provision in the articles or regulations which THAT are 1,115
not expressly stated to be operative during an emergency, the 1,117
emergency regulations may make any provision that may be 1,118
practical or necessary with respect to meetings, committees, 1,119
vacancies, and temporary appointments of the trustees DIRECTORS, 1,120
and the rank and succession of officers, the same as may be done 1,122
by corporations for profit under division (C) of section 1701.11 1,123
of the Revised Code, reading "directors" as "trustees" where the 1,124
context so requires. 1,125
(D) Any change in the regulations made in accordance with 1,127
their provisions or pursuant to division (B) of this section 1,128
shall be binding on all members. 1,129
(E) If, pursuant to the regulations, such regulations are 1,131
amended or new regulations adopted without a meeting of the 1,132
voting members, the secretary of the corporation shall mail a 1,133
copy of the amendment or the new regulations to each voting 1,134
member who would have been entitled to vote on the amendment or 1,135
new regulations and did not participate in the adoption of the 1,136
amendment or new regulations. 1,137
(F) No person dealing with the corporation shall be 1,139
charged with constructive notice of the regulations. 1,140
(G) Unless expressly prohibited by the articles or 1,142
regulations, or unless otherwise provided by the emergency 1,143
26
regulations, and notwithstanding any different provision in this 1,144
chapter, the special rules provided for corporations for profit 1,145
under division (F) of section 1701.11 of the Revised Code are 1,146
applicable to a nonprofit corporation during an emergency, as 1,147
defined in division (U) of section 1701.01 of the Revised Code, 1,148
reading "directors" as "trustees" where the context so requires. 1,149
Sec. 1702.12. (A) A corporation may sue and be sued. 1,158
(B) A corporation may adopt and alter a corporate seal and 1,160
use it or a facsimile of it, but failure to affix the corporate 1,161
seal shall not affect the validity of any instrument. 1,162
(C) Unless otherwise provided in the articles, a 1,164
corporation may take property of any description, or any interest 1,165
in property, by gift, devise, or bequest. 1,166
(D) Subject to limitations prescribed by law or in its 1,168
articles, a corporation may make donations for the public 1,169
welfare, for religious, charitable, scientific, literary, or 1,170
educational purposes, or in furtherance of any of its purposes. 1,171
(E)(1) A corporation may indemnify or agree to indemnify 1,173
any person who was or is a party, or is threatened to be made a 1,174
party, to any threatened, pending, or completed civil, criminal, 1,175
administrative, or investigative action, suit, or proceeding, 1,176
other than an action by or in the right of the corporation, by 1,177
reason of the fact that he THE PERSON is or was a trustee 1,178
DIRECTOR, officer, employee, or agent of or a volunteer of the 1,181
corporation, or is or was serving at the request of the 1,182
corporation as a trustee, director, officer, employee, member, 1,183
manager, or agent of or a volunteer of another domestic or 1,184
foreign nonprofit corporation or BUSINESS corporation for profit, 1,186
a limited liability company, or a partnership, joint venture, 1,187
trust, or other enterprise, against expenses, including 1,189
attorney's fees, judgments, fines, and amounts paid in settlement 1,190
actually and reasonably incurred by him THE PERSON in connection 1,191
with such action, suit, or proceeding, if he THE PERSON acted in 1,193
good faith and in a manner he THE PERSON reasonably believed to 1,195
27
be in or not opposed to the best interests of the corporation, 1,196
and, with respect to any criminal action or proceeding, if he THE 1,197
PERSON had no reasonable cause to believe his THE PERSON'S 1,198
conduct was unlawful. The termination of any action, suit, or 1,199
proceeding by judgment, order, settlement, or conviction, or upon 1,200
a plea of nolo contendere or its equivalent, shall not create, of 1,201
itself, a presumption that the person did not act in good faith 1,202
and in a manner he THE PERSON reasonably believed to be in or not 1,203
opposed to the best interests of the corporation, and, with 1,205
respect to any criminal action or proceeding, a presumption that 1,206
the person had reasonable cause to believe that his THE PERSON'S 1,207
conduct was unlawful. 1,208
(2) A corporation may indemnify or agree to indemnify any 1,210
person who was or is a party, or is threatened to be made a 1,211
party, to any threatened, pending, or completed action or suit by 1,212
or in the right of the corporation to procure a judgment in its 1,213
favor, by reason of the fact that he THE PERSON is or was a 1,214
trustee DIRECTOR, officer, employee, or agent of or a volunteer 1,216
of the corporation, or is or was serving at the request of the 1,217
corporation as a trustee, director, officer, employee, member, 1,218
manager, or agent of or a volunteer of another domestic or 1,220
foreign nonprofit corporation or BUSINESS corporation for profit, 1,221
a limited liability company, or a partnership, joint venture, 1,223
trust, or other enterprise against expenses, including attorney's 1,224
fees, actually and reasonably incurred by him THE PERSON in 1,225
connection with the defense or settlement of such action or suit, 1,227
if he THE PERSON acted in good faith and in a manner he THE 1,229
PERSON reasonably believed to be in or not opposed to the best 1,231
interests of the corporation, except that no indemnification 1,232
shall be made in respect of any of the following:
(a) Any claim, issue, or matter as to which such THE 1,234
person is adjudged to be liable for negligence or misconduct in 1,235
the performance of his THE PERSON'S duty to the corporation 1,236
unless, and only to the extent that, the court of common pleas or 1,238
28
the court in which the action or suit was brought determines, 1,239
upon application, that, despite the adjudication of liability but 1,240
in view of all the circumstances of the case, such THE person is 1,241
fairly and reasonably entitled to indemnity for such expenses as 1,242
the court of common pleas or such other court considers proper; 1,243
(b) Any action or suit in which liability is asserted 1,245
against a trustee DIRECTOR and that liability is asserted only 1,246
pursuant to section 1702.55 of the Revised Code. 1,248
(3) To the extent that a trustee, director, officer, 1,250
employee, member, manager, agent, or volunteer has been 1,251
successful on the merits or otherwise in defense of any action, 1,253
suit, or proceeding referred to in division (E)(1) or (2) of this 1,254
section, or in defense of any claim, issue, or matter in such an 1,255
action, suit, or proceeding, he THE PERSON shall be indemnified 1,256
against expenses, including attorney's fees, actually and 1,258
reasonably incurred by him THE PERSON in connection with that 1,259
action, suit, or proceeding. 1,260
(4) Unless ordered by a court and subject to division 1,262
(E)(3) of this section, any indemnification under division (E)(1) 1,263
or (2) of this section shall be made by the corporation only as 1,264
authorized in the specific case, upon a determination that 1,265
indemnification of the trustee, director, officer, employee, 1,266
member, manager, agent, or volunteer is proper in the 1,267
circumstances because he THE PERSON has met the applicable 1,269
standard of conduct set forth in division (E)(1) or (2) of this 1,270
section. Such determination shall be made in any of the 1,271
following manners:
(a) By a majority vote of a quorum consisting of trustees 1,273
DIRECTORS of the indemnifying corporation who were not and are 1,275
not parties to or threatened with the action, suit, or proceeding 1,276
referred to in division (E)(1) or (2) of this section; 1,277
(b) Whether or not a quorum as described in division 1,279
(E)(4)(a) of this section is obtainable, and if a majority of a 1,280
quorum of disinterested trustees DIRECTORS so directs, in a 1,281
29
written opinion by independent legal counsel other than an 1,283
attorney, or a firm having associated with it an attorney, who 1,284
has been retained by or who has performed services for the 1,285
corporation or any person to be indemnified within the past five 1,286
years;
(c) By the members; 1,288
(d) By the court of common pleas or the court in which the 1,290
action, suit, or proceeding referred to in division (E)(1) or (2) 1,291
of this section was brought. 1,292
If an action or suit by or in the right of the corporation 1,294
is involved, any determination made by the disinterested trustees 1,295
DIRECTORS under division (E)(4)(a) of this section or by 1,297
independent legal counsel under division (E)(4)(b) of this 1,298
section shall be communicated promptly to the person who 1,299
threatened or brought the action or suit under division (E)(2) of 1,300
this section, and, within ten days after receipt of such 1,301
notification, such person shall have the right to petition the 1,302
court of common pleas or the court in which such action or suit 1,303
was brought to review the reasonableness of such determination. 1,304
(5)(a)(i) Unless, at the time of a trustee's DIRECTOR'S or 1,306
volunteer's act or omission that is the subject of an action, 1,307
suit, or proceeding referred to in division (E)(1) or (2) of this 1,308
section, the articles or regulations of the corporation state, by 1,309
specific reference to this division, that its provisions do not 1,310
apply to the corporation, or unless the only liability asserted 1,311
against a trustee DIRECTOR in an action, suit, or proceeding 1,312
referred to in division (E)(1) or (2) of this section is pursuant 1,314
to section 1702.55 of the Revised Code, or unless division 1,315
(E)(5)(a)(ii) of this section applies, the expenses incurred by 1,316
the trustee DIRECTOR or volunteer in defending the action, suit, 1,318
or proceeding, including attorney's fees, shall be paid by the 1,319
corporation. Upon the request of the trustee DIRECTOR or 1,320
volunteer and in accordance with division (E)(5)(b) of this 1,322
section, those expenses shall be paid as they are incurred, in 1,323
30
advance of the final disposition of the action, suit, or 1,324
proceeding.
(ii) Notwithstanding division (E)(5)(a)(i) of this 1,326
section, the expenses incurred by a trustee DIRECTOR or volunteer 1,328
in defending an action, suit, or proceeding referred to in 1,329
division (E)(1) or (2) of this section, including attorney's 1,330
fees, shall not be paid by the corporation upon the final 1,331
disposition of the action, suit, or proceeding, or, if paid in 1,332
advance of the final disposition of the action, suit, or 1,333
proceeding, shall be repaid to the corporation by the trustee 1,334
DIRECTOR or volunteer, if it is proved, by clear and convincing 1,336
evidence, in a court with jurisdiction that the act or omission 1,337
of the trustee DIRECTOR or volunteer was one undertaken with a 1,339
deliberate intent to cause injury to the corporation or was one 1,340
undertaken with a reckless disregard for the best interests of 1,341
the corporation.
(b) Expenses, including attorney's fees, incurred by a 1,343
trustee, director, officer, employee, member, manager, agent, or 1,344
volunteer in defending any action, suit, or proceeding referred 1,346
to in division (E)(1) or (2) of this section may be paid by the 1,347
corporation as they are incurred, in advance of the final 1,348
disposition of the action, suit, or proceeding, as authorized by 1,349
the trustees DIRECTORS in the specific case, upon receipt of an 1,351
undertaking by or on behalf of the trustee, director, officer, 1,352
employee, member, manager, agent, or volunteer to repay the 1,354
amount if it ultimately is determined that he THE PERSON is not 1,355
entitled to be indemnified by the corporation. 1,356
(6) The indemnification authorized by this section is not 1,358
exclusive of, and shall be in addition to, any other rights 1,359
granted to those seeking indemnification, pursuant to the 1,360
articles, the regulations, any agreement, a vote of members or 1,361
disinterested trustees DIRECTORS, or otherwise, both as to action 1,363
in their official capacities and as to action in another capacity 1,364
while holding their offices or positions, and shall continue as 1,365
31
to a person who has ceased to be a trustee, director, officer, 1,366
employee, member, manager, agent, or volunteer and shall inure to 1,367
the benefit of the heirs, executors, and administrators of such a 1,369
person.
(7) A corporation may purchase and maintain insurance, or 1,371
furnish similar protection, including, but not limited to, trust 1,372
funds, letters of credit, or self-insurance, for or on behalf of 1,373
any person who is or was a trustee DIRECTOR, officer, employee, 1,374
agent, or volunteer of the corporation, or is or was serving at 1,376
the request of the corporation as a trustee, director, officer, 1,377
employee, member, manager, agent, or volunteer of another 1,378
domestic or foreign nonprofit corporation or BUSINESS corporation 1,379
for profit, a limited liability company, or a partnership, joint 1,381
venture, trust, or other enterprise, against any liability 1,382
asserted against him THE PERSON and incurred by him THE PERSON in 1,384
any such capacity, or arising out of his THE PERSON'S status as 1,385
such, whether or not the corporation would have the power to 1,387
indemnify him THE PERSON against that liability under this 1,389
section. Insurance may be so purchased from or so maintained 1,390
with a person in which the corporation has a financial interest. 1,391
(8) The authority of a corporation to indemnify persons 1,393
pursuant to division (E)(1) or (2) of this section does not limit 1,394
the payment of expenses as they are incurred, in advance of the 1,395
final disposition of an action, suit, or proceeding, pursuant to 1,396
division (E)(5) of this section or the payment of 1,397
indemnification, insurance, or other protection that may be 1,398
provided pursuant to division (E)(6) or (7) of this section. 1,399
Divisions (E)(1) and (2) of this section do not create any 1,401
obligation to repay or return payments made by a corporation
pursuant to division (E)(5), (6), or (7) of this section. 1,402
(9) As used in division (E) of this section, "corporation" 1,404
includes all constituent corporations in a consolidation or 1,405
merger, and the new or surviving corporation, so that any person 1,406
who is or was a trustee DIRECTOR, officer, employee, agent, or 1,407
32
volunteer of a constituent corporation or is or was serving at 1,409
the request of a constituent corporation as a trustee, director, 1,410
officer, employee, member, manager, agent, or volunteer of 1,411
another domestic or foreign nonprofit corporation or BUSINESS 1,412
corporation for profit, a limited liability company, or a 1,414
partnership, joint venture, trust, or other enterprise, shall 1,415
stand in the same position under this section with respect to the 1,416
new or surviving corporation as he THE PERSON would if he THE 1,418
PERSON had served the new or surviving corporation in the same 1,419
capacity.
(F) In carrying out the purposes stated in its articles 1,421
and subject to limitations prescribed by law or in its articles, 1,422
a corporation may do the following: 1,423
(1) Purchase or otherwise acquire, lease as lessee, invest 1,425
in, hold, use, lease as lessor, encumber, sell, exchange, 1,426
transfer, and dispose of property of any description or any 1,427
interest in property of any description; 1,428
(2) Make contracts; 1,430
(3) Form or acquire the control of other domestic or 1,432
foreign nonprofit corporations or BUSINESS corporations for 1,433
profit; 1,434
(4) Be a partner, member, associate, or participant in 1,436
other enterprises or ventures, whether profit or nonprofit; 1,437
(5) Borrow money, and issue, sell, and pledge its notes, 1,439
bonds, and other evidences of indebtedness, and secure any of its 1,440
obligations by mortgage, pledge, or deed of trust, of all or any 1,441
of its property, and guarantee or secure obligations of any 1,442
person; 1,443
(6) Become a member of another corporation; 1,445
(7) Conduct its affairs in this state and elsewhere; 1,447
(8) Resist a change or potential change in control of the 1,449
corporation, if the trustees DIRECTORS, by a majority vote of a 1,450
quorum, determine that the change or potential change is opposed 1,452
to or not in the best interests of the corporation, upon 1,453
33
consideration of any of the matters set forth in division (E) of 1,454
section 1702.30 of the Revised Code; 1,455
(9) Do all things permitted by law and exercise all 1,457
authority within the purposes stated in its articles or 1,458
incidental to those purposes. 1,459
(G) Irrespective of the purposes stated in its articles, 1,461
but subject to limitations or prohibitions stated in its 1,462
articles, a corporation, in addition to the authority conferred 1,463
by division (F) of this section, may invest its funds not 1,464
currently needed in carrying out its purposes in any shares or 1,465
other securities of another nonprofit corporation or BUSINESS 1,466
corporation for profit, or another business or undertaking. 1,468
(H)(1) Notwithstanding any other provision of this section 1,470
to the contrary, no corporation that is a "private foundation," 1,471
as defined in section 509 of the Internal Revenue Code, shall do 1,472
the following: 1,473
(a) Engage in any act of "self-dealing," as defined in 1,475
section 4941 (d) of the Internal Revenue Code, that would give 1,476
rise to any liability for any tax imposed by section 4941 of the 1,477
Internal Revenue Code; 1,478
(b) Retain any "excess business holdings," as defined in 1,480
section 4943 (c) of the Internal Revenue Code, that would give 1,481
rise to any liability for any tax imposed by section 4943 of the 1,482
Internal Revenue Code; 1,483
(c) Make any investment that would jeopardize the carrying 1,485
out of any of its exempt purposes, within the meaning of section 1,486
4944 of the Internal Revenue Code, so as to give rise to any 1,487
liability for any tax imposed by that section; 1,488
(d) Make any "taxable expenditures," as defined in section 1,490
4945 (d) of the Internal Revenue Code, that would give rise to 1,491
any liability for any tax imposed by section 4945 of the Internal 1,492
Revenue Code. 1,493
(2) Each corporation that is a "private foundation," as 1,495
defined in section 509 of the Internal Revenue Code, shall, for 1,496
34
the purposes specified in its articles, distribute at such time 1,497
and in such manner, for each taxable year, amounts at least 1,498
sufficient to avoid liability for any tax imposed by section 4942 1,499
of the Internal Revenue Code. 1,500
(3) Divisions (H)(1) and (2) of this section apply to all 1,502
corporations described in them, whether or not contrary to the 1,503
provisions of the articles or regulations of such a corporation, 1,504
except that divisions (H)(1) and (2) of this section do not apply 1,505
to a corporation in existence on September 17, 1971, to the 1,506
extent that such corporation provides to the contrary by 1,507
amendment to its articles adopted after that date. 1,508
(4) Violation of a provision of division (H)(1) or (2) of 1,510
this section by a corporation to which the provisions of those 1,511
divisions are applicable is not cause for cancellation of its 1,512
articles. No trustee DIRECTOR or officer of a corporation to 1,513
which the provisions of division (H)(1) or (2) of this section 1,515
are applicable is personally liable for a violation of a 1,516
prohibition or requirement of those provisions, unless he THE 1,517
DIRECTOR OR OFFICER participated in such violation knowing that 1,519
it was a violation, and no such trustee DIRECTOR or officer is 1,520
personally liable if such violation was not willful and was due 1,522
to reasonable cause, except that this division does not exonerate 1,523
a trustee DIRECTOR or officer from any responsibility or 1,525
liability to which he THE DIRECTOR OR OFFICER is subject under 1,526
any other rule of law, whether or not duplicated in division 1,527
(H)(1) or (2) of this section. 1,528
(5) Except as provided in division (H)(4) of this section, 1,530
nothing in division (H) of this section impairs the rights and 1,531
powers of the courts or the attorney general of this state with 1,532
respect to any corporation. 1,533
(6) As used in division (H) of this section, "Internal 1,535
Revenue Code" means the "Internal Revenue Code of 1986," 100 1,536
Stat. 2085, 26 U.S.C. 1, as amended. 1,537
(I)(1) No lack of, or limitation upon, the authority of a 1,539
35
corporation shall be asserted in any action except as follows: 1,540
(a) By the state in an action by it against the 1,542
corporation; 1,543
(b) By or on behalf of the corporation against a trustee 1,545
DIRECTOR, an officer, or a member as such; 1,547
(c) By a member as such or by or on behalf of the members 1,549
against the corporation, a trustee DIRECTOR, an officer, or a 1,550
member as such. 1,552
(2) Division (I)(1) of this section shall apply to any 1,554
action brought in this state upon any contract made in this state 1,555
by a foreign corporation. 1,556
Sec. 1702.13. (A) The corporation shall keep a membership 1,565
book MAINTAIN A RECORD OF ITS MEMBERS containing the name and 1,566
address of each member, the date of his admission to membership, 1,568
and, if members are classified, the class to which he THE MEMBER 1,569
belongs.
(B) A corporation may issue certificates evidencing 1,571
membership in it, but a corporation incorporated on or after June 1,572
9, 1927, shall not issue certificates for shares. 1,573
(C) Membership in a corporation may be terminated in the 1,575
manner provided by law, the articles, or the regulations, and 1,576
upon the termination of membership for any cause, such fact and 1,577
the date of termination shall be recorded in the CORPORATION'S 1,578
membership book RECORDS. 1,579
(D) Unless the articles or the regulations otherwise 1,581
provide, all the rights and privileges of a member in the 1,582
corporation and its property shall cease on termination of his 1,583
membership. 1,584
(E) If permitted by the articles or the regulations of a 1,586
corporation, another nonprofit corporation or, A BUSINESS 1,587
corporation for profit, A LIMITED LIABILITY COMPANY, or a ANY 1,589
partnership, may become a member of the first mentioned 1,591
corporation.
(F) Whenever the number of members of a corporation that, 1,593
36
under the law, the articles, or the regulations, must have a 1,594
specified number of members, is reduced below the specified 1,595
number, the corporation shall not be required because of that 1,596
reduction to cease carrying on its activities, but the continuing 1,597
members, if two or more, may fill all vacancies. 1,598
(G) UNLESS OTHERWISE PROVIDED IN THE ARTICLES OR 1,600
REGULATIONS OF A CORPORATION, ALL MEMBERS HAVE THE SAME 1,601
MEMBERSHIP RIGHTS AND PRIVILEGES.
Sec. 1702.14. Where neither the articles nor the 1,610
regulations provide for members thereof as such, or where a 1,611
corporation has in fact no members other than the trustees 1,612
DIRECTORS, the trustees DIRECTORS shall, for the purposes of any 1,613
statute or rule of law relating to corporations, be taken to be 1,614
the members of such corporation, and they shall have all the 1,615
rights and privileges of members; provided, EXCEPT that where the 1,616
provisions in sections 1702.01 to 1702.58, inclusive, of the 1,618
Revised Code THIS CHAPTER relating to meetings of trustees 1,619
DIRECTORS differ, it shall be sufficient to comply with the 1,620
provisions relating to trustees DIRECTORS. 1,621
Sec. 1702.15. Each corporation shall keep correct and 1,630
complete books and records of account, together with minutes of 1,631
the proceedings of its incorporators, members, trustees 1,632
DIRECTORS, and committees of the trustees DIRECTORS or members. 1,633
Subject to limitations prescribed in the articles or the 1,634
regulations upon the right of members of charitable corporations 1,635
A CORPORATION to examine the books and records, all books and 1,637
records of a corporation, including the membership book RECORDS 1,638
prescribed by section 1702.13 of the Revised Code, may be 1,639
examined by any member or trustee DIRECTOR or the agent or 1,640
attorney of either, for any reasonable and proper purpose and at 1,642
any reasonable time.
Sec. 1702.16. An annual meeting of voting members for the 1,651
election of trustees DIRECTORS and the consideration of reports 1,652
to be laid before such meeting shall be held on a date designated 1,654
37
by or in the manner provided for in the articles or the 1,655
regulations. In the absence of such a designation, the annual
meeting shall be held on the first Monday of the fourth month 1,656
following the close of each fiscal year of the corporation. When 1,657
the annual meeting is not held or trustees DIRECTORS are not 1,658
elected thereat, they may be elected at a special meeting called 1,660
for that purpose.
Sec. 1702.17. (A) Meetings of voting members may be 1,669
called by any of the following: 1,670
(1) The chairman CHAIRPERSON of the board, the president, 1,672
or, in case of the president's absence, death, or disability, the 1,674
vice-president authorized to exercise the authority of the 1,675
president;
(2) The trustees DIRECTORS by action at a meeting, or a 1,677
majority of the trustees DIRECTORS acting without a meeting; 1,679
(3) The lesser of (a) ten per cent of the voting members 1,681
or (b) twenty-five of such members, unless the articles or the 1,682
regulations specify for such purpose a smaller or larger 1,683
proportion or number, but not in excess of fifty per cent of such 1,684
members;
(4) Such other officers or persons as the articles or the 1,686
regulations authorize to call such meetings. 1,687
(B) Meetings of voting members may be held either within 1,689
or without this state if so provided in the articles or the 1,690
regulations. In the absence of any such provision, all meetings 1,691
shall be held at the principal office of the corporation in this 1,692
state.
Sec. 1702.18. Unless the articles or the regulations 1,701
provide for notice of meetings otherwise than as provided in this 1,702
section, written notice stating the time and place of a meeting 1,703
of the voting members, and, in case of a special meeting, the 1,704
purpose or purposes for which the meeting is called, shall be 1,705
given either by personal delivery or by mail IN THE MANNER
DESCRIBED IN SECTION 1702.02 OF THE REVISED CODE not less than 1,706
38
ten nor OR NOT more than sixty days before the date of the 1,707
meeting: (A) to each member entitled to notice of the meeting; 1,709
(B) by or at the direction of the president or the secretary or 1,710
any other person required or permitted by the regulations to give 1,711
notice or the officers or persons calling the meeting. If
mailed, such notice shall be addressed to the member at his THE 1,712
MEMBER'S address as it appears on the records of the corporation. 1,714
Notice of adjournment of a meeting need not be given if the time 1,715
and place to which it is adjourned are fixed and announced at 1,716
such meeting.
Sec. 1702.19. Notice of the time, place, and purposes of 1,725
any meeting of voting members or trustees DIRECTORS, as the case 1,726
may be, whether required by law, the articles, the regulations, 1,728
or (in the case of trustees DIRECTORS) the bylaws, may be waived 1,730
in writing, either before or after the holding of such meeting,
by any member, or by any trustee DIRECTOR, which writing shall be 1,731
filed with or entered upon the records of the meeting. The 1,733
attendance of any member or any trustee DIRECTOR at any such 1,735
meeting without protesting, prior to or at the commencement of
the meeting, the lack of proper notice shall be deemed to be a 1,736
waiver by him THE MEMBER OR DIRECTOR of notice of such meeting. 1,738
Sec. 1702.21. (A) When any domestic nonprofit corporation 1,747
or domestic BUSINESS corporation for profit holds membership in a 1,749
domestic or foreign corporation, the chairman CHAIRPERSON of the 1,750
board, the president, any vice-president, the secretary, or the 1,752
treasurer of the corporation OR BUSINESS CORPORATION holding such 1,753
membership, and any such officer or cashier or trust officer of a 1,755
banking or trust corporation holding such membership, and any 1,756
like officer of a foreign nonprofit corporation or foreign 1,757
BUSINESS corporation for profit, or of a foreign banking or trust 1,759
corporation, holding membership in a domestic corporation, shall 1,760
conclusively be deemed to have authority to vote on behalf of 1,761
that corporation OR BUSINESS CORPORATION, and to appoint proxies 1,763
and execute written consents, waivers, and releases on its 1,764
39
behalf, unless, before a vote is taken or a consent, waiver, or 1,765
release is acted upon, it appears by a certified copy of the
regulations, the bylaws, or a resolution of the trustees, 1,766
directors, or executive committee of that corporation OR BUSINESS 1,767
CORPORATION that such authority does not exist or is vested in 1,769
some other officer or person. 1,770
(B) WHEN ANY DOMESTIC OR FOREIGN LIMITED LIABILITY COMPANY 1,772
HOLDS MEMBERSHIP IN A DOMESTIC OR FOREIGN CORPORATION, ANY 1,773
MANAGER OR MEMBER OF THE LIMITED LIABILITY COMPANY HOLDING THAT 1,774
MEMBERSHIP SHALL CONCLUSIVELY BE DEEMED TO HAVE AUTHORITY TO VOTE 1,775
ON BEHALF OF THAT LIMITED LIABILITY COMPANY AND TO APPOINT 1,776
PROXIES AND EXECUTE WRITTEN CONSENTS, WAIVERS, AND RELEASES ON 1,777
ITS BEHALF, UNLESS BEFORE A VOTE IS TAKEN OR A CONSENT, WAIVER, 1,778
OR RELEASE IS ACTED UPON, IT APPEARS BY A CERTIFIED COPY OF THE 1,779
ARTICLES OF ORGANIZATION, OPERATING AGREEMENT, OR A RESOLUTION OF 1,780
THE MANAGERS OR THE MEMBERS OF THAT LIMITED LIABILITY COMPANY 1,781
THAT SUCH AUTHORITY DOES NOT EXIST OR IS VESTED IN SOME OTHER 1,782
REPRESENTATIVE OR PERSON. 1,783
(C) For the purpose of this section, a person exercising 1,785
such authority as such AN officer, REPRESENTATIVE, OR OTHER 1,787
PERSON ENTITLED TO VOTE AND ACTING IN THAT CAPACITY is 1,788
prima-facie deemed to be duly elected, qualified, and acting as 1,789
such THAT officer, REPRESENTATIVE, OR OTHER PERSON ENTITLED TO 1,790
VOTE AND ACTING IN THAT CAPACITY. 1,791
Sec. 1702.22. Unless the articles or the regulations 1,800
otherwise provide:
(A) The voting members present IN PERSON OR, IF PERMITTED, 1,802
BY MAIL OR BY PROXY, at any meeting of voting members shall 1,803
constitute a quorum for such meeting, but. THE AFFIRMATIVE VOTE 1,805
OF A MAJORITY OF THE VOTING MEMBERS PRESENT AT A MEETING AT WHICH
A QUORUM IS PRESENT SHALL BE NECESSARY FOR THE AUTHORIZATION OR 1,806
TAKING OF ANY ACTION VOTED UPON BY THE MEMBERS, EXCEPT THAT no 1,807
action required by law, the articles, or the regulations to be 1,809
authorized or taken by a specified proportion or number of the 1,810
40
voting members or of any class of voting members may be 1,811
authorized or taken by a lesser proportion or number;.
(B) The affirmative vote of a majority of the voting 1,813
members present at a meeting at which a quorum is present shall 1,814
be necessary for the authorization or taking of any action voted 1,815
upon by the members;
(C) A majority of the voting members present at a meeting, 1,817
whether or not a quorum is present, may adjourn such meeting from 1,819
time to time.
Sec. 1702.23. Whenever, with respect to the authorization 1,828
or taking of any action by the members or the trustees DIRECTORS, 1,830
the articles or the regulations require the vote, consent, 1,832
waiver, or release of a greater proportion or number of the
members or the trustees DIRECTORS than that otherwise required by 1,834
law with respect thereto, the provisions of the articles or the 1,835
regulations shall control.
Sec. 1702.25. Unless the articles or the regulations 1,844
prohibit the authorization or taking of any action of the 1,845
INCORPORATORS, THE members, or of the trustees DIRECTORS without 1,847
a meeting, any action which THAT may be authorized or taken at a 1,848
meeting of the INCORPORATORS, THE members, or of the trustees 1,849
DIRECTORS, as the case may be, may be authorized or taken without 1,851
a meeting with the affirmative vote or approval of, and in a
writing or writings signed by, all of the INCORPORATORS, ALL OF 1,852
THE members, or all of the trustees DIRECTORS, as the case may 1,854
be, who would be entitled to notice of a meeting for such
purpose, or, in the case of members, such other proportion or 1,855
number of voting members, not less than a majority, as the 1,856
articles or the regulations permit. Any such writing shall be 1,857
filed with or entered upon the records of the corporation. Any 1,858
certificate with respect to the authorization or taking of any
such action which THAT is required to be filed in the office of 1,859
the secretary of state shall recite that the authorization or 1,861
taking of such action was in a writing or writings approved and 1,862
41
signed as specified in this section.
Sec. 1702.26. (A) At a meeting of members at which 1,871
trustees DIRECTORS are to be elected, only persons nominated as 1,873
candidates shall be eligible for election as trustees DIRECTORS. 1,874
(B) At all elections of trustees DIRECTORS the candidates 1,876
receiving the greatest number of votes shall be elected. 1,878
Sec. 1702.27. (A) Except as provided in division (B) of 1,887
this section and section 1702.521 of the Revised Code: 1,888
(1) The number of trustees DIRECTORS as fixed by the 1,890
articles or the regulations shall be not less than three or, if 1,892
not so fixed, the number shall be three, EXCEPT THAT IF THERE ARE 1,893
ONLY ONE OR TWO MEMBERS OF THE CORPORATION, THE NUMBER OF 1,894
DIRECTORS MAY BE LESS THAN THREE BUT NOT LESS THAN THE NUMBER OF
MEMBERS. 1,895
(2) Unless the articles or the regulations fix the number 1,897
of trustees DIRECTORS or provide the manner in which such number 1,899
may be fixed or changed by the voting members, the number may be 1,900
fixed or changed at a meeting of the voting members called for 1,901
the purpose of electing trustees DIRECTORS, by the affirmative 1,902
vote of a majority of the voting members present IN PERSON OR, IF 1,903
PERMITTED, BY MAIL OR BY PROXY, if a quorum is present, but no 1,904
reduction in the number of trustees DIRECTORS shall of itself 1,905
have the effect of shortening the term of any incumbent trustee 1,907
DIRECTOR.
(3) The trustee DIRECTOR shall have such qualifications, 1,909
if any, as are stated in the articles or the regulations. 1,911
(4) The articles or the regulations may provide that 1,913
persons occupying certain positions within or without the 1,914
corporation shall be ex officio trustees DIRECTORS, but, unless 1,915
otherwise provided in the articles or the regulations, such ex 1,917
officio trustees DIRECTORS shall not be considered for quorum 1,918
purposes and shall have no vote. 1,919
(B) The court of common pleas of the county in which the 1,921
corporation maintains its principal office may, pursuant to 1,922
42
division (A) of section 1702.521 of the Revised Code, order the 1,923
appointment of a provisional trustee DIRECTOR for the corporation 1,925
without regard to the number or qualifications of trustees 1,926
DIRECTORS stated in the articles or regulations of the 1,927
corporation.
Sec. 1702.28. (A) Unless the articles or the regulations 1,936
provide for a different term, each trustee DIRECTOR shall hold 1,937
office until the next annual meeting of voting members and until 1,939
his THE DIRECTOR'S successor is elected, or until his THE 1,940
DIRECTOR'S earlier resignation, removal from office, or death. 1,941
(B) The articles or the regulations may provide for the 1,943
classification of trustees DIRECTORS into classes and that the 1,944
terms of office of the several classes need not be uniform. 1,946
Sec. 1702.29. (A) The office of a trustee DIRECTOR 1,955
becomes vacant if he THE DIRECTOR dies or resigns, which 1,958
resignation shall take effect immediately or at such other time
as the trustee DIRECTOR may specify. 1,959
(B) A trustee DIRECTOR may be removed from office pursuant 1,961
to any procedure therefor provided in the articles or in the 1,963
regulations and such removal shall create a vacancy in the board. 1,964
(C) Unless the articles or the regulations otherwise 1,966
provide, the remaining trustees DIRECTORS, though less than a 1,967
majority of the whole authorized number of trustees DIRECTORS, 1,969
may, by the vote of a majority of their number, fill any vacancy 1,970
in the board for the unexpired term. Within the meaning of this 1,971
section, a vacancy exists in case the voting members increase the 1,972
authorized number of trustees DIRECTORS but fail at the meeting 1,973
at which such increase is authorized, or an adjournment thereof, 1,975
to elect the additional trustees DIRECTORS provided for, or in 1,976
case the voting members fail at any time to elect the whole 1,977
authorized number of trustees DIRECTORS. 1,978
Sec. 1702.30. (A) Except where the law, the articles, or 1,987
the regulations require that action be otherwise authorized or 1,988
taken, all of the authority of a corporation shall be exercised 1,989
43
by or under the direction of its trustees DIRECTORS. For their 1,990
own government, the trustees DIRECTORS may adopt bylaws that are 1,992
not inconsistent with the articles or the regulations. 1,993
(B) A trustee DIRECTOR shall perform his THE duties as OF 1,996
a trustee DIRECTOR, including his THE duties as a member of any 1,997
committee of the trustees DIRECTORS upon which he THE DIRECTOR 1,999
may serve, in good faith, in a manner he THE DIRECTOR reasonably 2,000
believes to be in or not opposed to the best interests of the 2,001
corporation, and with the care that an ordinarily prudent person 2,002
in a like position would use under similar circumstances. In 2,003
performing his THE duties OF A DIRECTOR, a trustee DIRECTOR is 2,005
entitled to rely on information, opinions, reports, or 2,007
statements, including financial statements and other financial 2,008
data, that are prepared or presented by the following: 2,009
(1) One or more trustees DIRECTORS, officers, or employees 2,011
of the corporation who the trustee DIRECTOR reasonably believes 2,013
are reliable and competent in the matters prepared or presented; 2,015
(2) Counsel, public accountants, or other persons as to 2,017
matters that the trustee DIRECTOR reasonably believes are within 2,018
the person's professional or expert competence; 2,020
(3) A committee of the trustees DIRECTORS upon which he 2,022
THE DIRECTOR does not serve, duly established in accordance with 2,025
a provision of the articles or the regulations, as to matters 2,026
within its designated authority, which committee the trustee 2,027
DIRECTOR reasonably believes to merit confidence. 2,029
(C) For purposes of division (B) of this section: 2,031
(1) A trustee DIRECTOR shall not be found to have failed 2,033
to perform his THE DIRECTOR'S duties in accordance with that 2,035
division, unless it is proved, by clear and convincing evidence, 2,037
in an action brought against the trustee DIRECTOR that he THE 2,038
DIRECTOR has not acted in good faith, in a manner he THE DIRECTOR 2,040
reasonably believes to be in or not opposed to the best interests 2,041
of the corporation, or with the care that an ordinarily prudent 2,042
person in a like position would use under similar circumstances. 2,043
44
Such an action includes, but is not limited to, an action that 2,044
involves or affects any of the following: 2,045
(a) A change or potential change in control of the 2,047
corporation; 2,048
(b) A termination or potential termination of his THE 2,050
DIRECTOR'S service to the corporation as a trustee DIRECTOR; 2,053
(c) His THE DIRECTOR'S service in any other position or 2,055
relationship with the corporation. 2,057
(2) A trustee DIRECTOR shall not be considered to be 2,059
acting in good faith if he THE DIRECTOR has knowledge concerning 2,061
the matter in question that would cause reliance on information, 2,063
opinions, reports, or statements that are prepared or presented 2,064
by the persons described in divisions (B)(1) to (3) of this 2,065
section, to be unwarranted. 2,066
(3) The provisions of this division do not limit relief 2,068
available under section 1702.301 of the Revised Code. 2,069
(D)(1) Subject to divisions (D)(2) and (3) of this 2,071
section, a trustee DIRECTOR is liable in damages for any act that 2,073
he THE DIRECTOR takes or fails to take as trustee DIRECTOR only 2,075
if it is proved, by clear and convincing evidence, in a court 2,077
with jurisdiction that the act or omission of the trustee 2,078
DIRECTOR was one undertaken with a deliberate intent to cause 2,080
injury to the corporation or was one undertaken with a reckless 2,081
disregard for the best interests of the corporation. 2,082
(2) Division (D)(1) of this section does not affect the 2,084
liability of a trustee DIRECTOR under section 1702.55 of the 2,085
Revised Code. 2,086
(3) Subject to division (D)(2) of this section, division 2,088
(D)(1) of this section does not apply if, and only to the extent 2,089
that, at the time of an act or omission of a trustee DIRECTOR 2,090
that is the subject of complaint, the articles or the regulations 2,092
of the corporation state, by specific reference to that division, 2,093
that its provisions do not apply to the corporation. 2,094
(E) For purposes of this section, in determining what he A 2,096
45
DIRECTOR reasonably believes to be in or not opposed to the best 2,098
interests of the corporation, a trustee DIRECTOR shall consider 2,099
the purposes of the corporation and may consider any of the 2,101
following:
(1) The interests of the employees, suppliers, creditors, 2,103
and customers of the corporation; 2,104
(2) The economy of this state and of the nation; 2,106
(3) Community and societal considerations; 2,108
(4) The long-term and short-term best interests of the 2,110
corporation, including, but not limited to, the possibility that 2,111
those interests may be best served by the continued independence 2,112
of the corporation. 2,113
(F) Divisions (C) and (D) of this section do not affect 2,115
the duties of a trustee DIRECTOR who acts in any capacity other 2,116
than in his THE capacity as a trustee DIRECTOR. 2,118
Sec. 1702.301. (A) Unless otherwise provided in the 2,128
articles or the regulations: 2,129
(1) No contract, action, or transaction is void or 2,131
voidable with respect to a corporation because the contract, 2,132
action, or transaction is between or affects the corporation and 2,133
one or more of its trustees DIRECTORS or officers, or is between 2,134
or affects the corporation and any other person in which one or 2,136
more of the corporation's trustees DIRECTORS or officers are 2,137
directors, trustees, or officers, or in which one or more of the 2,139
corporation's trustees DIRECTORS or officers have a financial or 2,141
personal interest, or because one or more interested trustees 2,142
DIRECTORS or officers participate in or vote at the meeting of 2,144
the trustees DIRECTORS or a committee of the trustees DIRECTORS 2,146
that authorizes the contract, action, or transaction, if any of 2,147
the following applies: 2,148
(a) The material facts as to his or their THE DIRECTOR'S 2,150
relationship or interest and as to the contract, action, or 2,152
transaction are disclosed or are known to the trustees DIRECTORS 2,153
or the committee, and the trustees DIRECTORS or committee, in 2,155
46
good faith reasonably justified by the material facts, authorizes 2,157
the contract, action, or transaction by the affirmative vote of a 2,158
majority of the disinterested trustees DIRECTORS, even though the 2,159
disinterested trustees DIRECTORS constitute less than a quorum of 2,161
the trustees DIRECTORS or the committee;
(b) The material facts as to his or their THE DIRECTOR'S 2,163
relationship or interest and as to the contract, action, or 2,165
transaction are disclosed or are known to the members entitled to 2,166
vote on the contract, action, or transaction, and the contract, 2,167
action, or transaction is specifically approved at a meeting of 2,168
the members held for the purpose of voting on the contract, 2,169
action, or transaction, by the affirmative vote of a majority of 2,170
the voting members of the corporation who are not interested in 2,171
the contract, action, or transaction; 2,172
(c) The contract, action, or transaction is fair as to the 2,174
corporation as of the time it is authorized or approved by the 2,175
trustees DIRECTORS, a committee of the trustees DIRECTORS, or the 2,177
members.
(2) Common or interested trustees DIRECTORS may be counted 2,179
in determining the presence of a quorum at a meeting of the 2,180
trustees DIRECTORS, or of a committee of the trustees DIRECTORS, 2,182
that authorizes such a contract, action, or transaction. 2,183
(3) The trustees DIRECTORS, by the affirmative vote of a 2,185
majority of those in office, and irrespective of any financial or 2,187
personal interest of any of the trustees DIRECTORS, shall have 2,188
authority to establish reasonable compensation, which may include 2,190
pension, disability, and death benefits, for services to the 2,191
corporation by trustees DIRECTORS and officers, or to delegate 2,192
that authority to establish reasonable compensation to one or 2,194
more officers or trustees DIRECTORS. 2,195
(B) Divisions (A)(1) and (2) of this section do not limit 2,197
or otherwise affect the liability of trustees DIRECTORS under 2,198
section 1702.55 of the Revised Code. 2,200
(C) For purposes of division (A) of this section, a 2,202
47
trustee DIRECTOR is not an interested trustee DIRECTOR solely 2,204
because the subject of a contract, action, or transaction may 2,205
involve or effect a change in control of the corporation or his 2,206
THE DIRECTOR'S continuation in office as a trustee DIRECTOR of 2,208
the corporation.
(D) For purposes of this section, "action" means a 2,210
resolution that is adopted by the trustees DIRECTORS or a 2,211
committee of the trustees DIRECTORS. 2,213
Sec. 1702.31. Unless otherwise provided in the articles, 2,222
regulations, or bylaws, and subject to the exceptions applicable 2,223
during an emergency for which provision is made in division (G) 2,224
of section 1702.11 of the Revised Code: 2,225
(A) Meetings of the trustees DIRECTORS may be called by 2,227
the chairman CHAIRPERSON of the board, the president, any 2,230
vice-president, or any two trustees DIRECTORS; 2,231
(B) Meetings of the trustees DIRECTORS may be held at any 2,233
place within or without the state and, unless the articles or 2,234
regulations prohibit participation by trustees DIRECTORS at a 2,235
meeting by means of communications equipment, meetings of the 2,237
trustees DIRECTORS may be held through any communications 2,239
equipment if all persons participating can hear each other and 2,240
participation in a meeting pursuant to this division shall 2,241
constitute presence at such meeting; 2,242
(C) Written notice of the time and place of each meeting 2,244
of the trustees DIRECTORS shall be given to each trustee DIRECTOR 2,246
either by personal delivery or by mail, telegram, or cablegram at 2,247
least two days before the meeting, which notice need not specify 2,248
the purposes of the meeting; 2,249
(D) Notice of adjournment of a meeting need not be given 2,251
if the time and place to which it is adjourned are fixed and 2,252
announced at such meeting. 2,253
Sec. 1702.32. Unless the articles or the regulations 2,262
otherwise provide, and subject to the exceptions applicable 2,263
during an emergency for which provision is made in division (G) 2,264
48
in OF section 1702.11 of the Revised Code, a majority of the 2,266
whole authorized number of trustees DIRECTORS is necessary to 2,267
constitute a quorum for a meeting of the trustees DIRECTORS, 2,268
except that a majority of the trustees DIRECTORS in office 2,270
constitutes a quorum for filling a vacancy in the board. The act
of a majority of the trustees DIRECTORS present at a meeting at 2,271
which a quorum is present is the act of the board, unless the act 2,273
of a greater number is required by the articles, the regulations, 2,274
or the bylaws.
Sec. 1702.33. (A) The regulations may provide for the 2,283
creation by the trustees DIRECTORS of an executive committee or 2,284
any other committee of the trustees DIRECTORS, to consist of not 2,286
less than three trustees ONE OR MORE DIRECTORS, and may authorize 2,288
the delegation to any such committee of any of the authority of 2,290
the trustees DIRECTORS, however conferred. 2,291
(B) The trustees DIRECTORS may appoint one or more 2,293
trustees DIRECTORS as alternate members of any such committee, 2,295
who may take the place of any absent member or members at any 2,296
meeting of the particular committee. 2,297
(C) Each such committee shall serve at the pleasure of the 2,299
trustees DIRECTORS, shall act only in the intervals between 2,300
meetings of the trustees DIRECTORS, and shall be subject to the 2,302
control and direction of the trustees DIRECTORS. 2,304
(D) Unless otherwise provided in the regulations or 2,306
ordered by the trustees DIRECTORS, any such committee may act by 2,307
a majority of its members at a meeting or by a writing or 2,309
writings signed by all of its members. 2,310
(E) Unless participation by members of any such committee 2,312
at a meeting by means of communications equipment is prohibited 2,313
by the articles, the regulations, or an order of the trustees 2,314
DIRECTORS, meetings of the particular committee may be held 2,316
through any communications equipment if all persons participating 2,317
can hear each other. Participation in a meeting pursuant to this 2,318
division constitutes presence at the meeting. 2,319
49
(F) An act or authorization of an act by any such 2,321
committee within the authority delegated to it shall be as 2,322
effective for all purposes as the act or authorization of the 2,323
trustees DIRECTORS. 2,324
Sec. 1702.34. (A) The officers of a corporation shall 2,333
consist of a president, a secretary, a treasurer, and, if 2,334
desired, a chairman CHAIRPERSON of the board, one or more 2,335
vice-presidents, and such other officers and assistant officers 2,337
as may be deemed necessary, each of whom may be designated by 2,338
such other titles as may be provided in the articles, the 2,339
regulations, the bylaws, or resolutions of the trustees 2,340
DIRECTORS. Unless the articles or the regulations otherwise 2,342
provide, none of the officers need be a trustee DIRECTOR. Any 2,343
two or more offices may be held by the same person. The officers 2,345
shall be elected or appointed at such time, in such manner, and 2,346
for such terms as may be prescribed in the articles or the 2,347
regulations. In the absence of any such provision, all officers 2,348
shall be elected annually by the trustees DIRECTORS.
(B) Unless the articles or the regulations otherwise 2,350
provide, and subject to the exceptions applicable during an 2,351
emergency for which provision is made in division (G) of section 2,352
1702.11 of the Revised Code: 2,353
(1) All officers, as between themselves and the 2,355
corporation, shall respectively have such authority and perform 2,356
such duties as are determined by the persons authorized to elect 2,357
or appoint them; 2,358
(2) Any officer may be removed, with or without cause, by 2,360
the persons authorized to elect or appoint him THE OFFICER 2,361
without prejudice to the contract rights of such officer. The 2,363
election or appointment of an officer for a given term, or a 2,364
general provision in the articles, the regulations, or the bylaws 2,365
with respect to term of office, shall not be deemed to create 2,366
contract rights; 2,367
(3) The persons authorized to elect or appoint officers 2,369
50
may fill any vacancy in any office occurring from whatever 2,370
reason. 2,371
Sec. 1702.36. The trustees DIRECTORS may authorize any 2,380
mortgage, pledge, or deed of trust of all or any of the property 2,382
of the corporation of any description, or any interest therein, 2,383
for the purpose of securing the payment or performance of any 2,384
obligation or contract. Unless the articles or the regulations,
or the terms of any trust on which the corporation holds any 2,385
particular property, otherwise provide, no vote or consent of 2,386
members or authorization from the court under section 1715.39 of 2,387
the Revised Code is necessary for such action.
Sec. 1702.38. (A) The articles may be amended from time 2,396
to time in any respect if the articles as amended set forth all 2,397
such provisions as are required in, and only such provisions as 2,398
may properly be in, original articles filed at the time of 2,399
adopting the amendment, other than with respect to the initial 2,400
trustees; provided DIRECTORS, EXCEPT that a charitable PUBLIC 2,402
BENEFIT corporation shall not amend its articles in such manner 2,403
that it will cease to be a charitable PUBLIC BENEFIT corporation. 2,404
(B) Without limiting the generality of such authority, the 2,406
articles may be amended to: 2,407
(1) Change the name of the corporation; 2,409
(2) Change the place in this state where its principal 2,411
office is to be located; 2,412
(3) Change, enlarge, or diminish its purpose or purposes; 2,414
(4) Change any provision of the articles or add any 2,416
provision that may properly be included therein. 2,417
(C) The voting members PRESENT IN PERSON OR, IF PERMITTED, 2,419
BY MAIL OR BY PROXY, at a meeting held for such purpose may adopt 2,421
an amendment by the affirmative vote of a majority of the voting 2,422
members present if a quorum is present, or, if the articles or 2,423
the regulations provide or permit, by the affirmative vote of a 2,424
greater or lesser proportion or number of the voting members, and 2,425
by such affirmative vote of the voting members of any particular 2,426
51
class as is required by the articles or the regulations. 2,427
(D) In addition to or in lieu of adopting an amendment to 2,429
the articles, the voting members may adopt amended articles by 2,430
the same action or vote as that required to adopt the amendment. 2,431
(E) The trustees DIRECTORS may adopt amended articles to 2,433
consolidate the original articles and all previously adopted 2,435
amendments to the articles that are in force at the time, or the 2,436
voting members at a meeting held for such purpose may adopt such 2,437
amended articles by the same vote as that required to adopt an 2,438
amendment.
(F) Amended articles shall set forth all such provisions 2,440
as are required in, and only such provisions as may properly be 2,441
in, original articles filed at the time of adopting the amended 2,442
articles, other than with respect to the initial trustees 2,443
DIRECTORS, and shall contain a statement that they supersede the 2,445
existing articles. 2,446
(G) Upon the adoption of any amendment or amended 2,448
articles, a certificate containing a copy of the resolution 2,449
adopting the amendment or amended articles, a statement of the 2,450
manner of its adoption, and, in the case of adoption of the 2,451
resolution by the trustees DIRECTORS, a statement of the basis 2,452
for such adoption, shall be filed with the secretary of state, 2,454
and thereupon the articles shall be amended accordingly, and the 2,455
amended articles shall supersede the existing articles. The 2,456
certificate shall be signed by any authorized officer of the 2,457
corporation. 2,458
(H) A copy of an amendment or amended articles changing 2,460
the name of a corporation or its principal office in this state, 2,461
certified by the secretary of state, may be filed for record in 2,462
the office of the county recorder of any county in this state, 2,463
and for such recording the county recorder shall charge and 2,464
collect the same fee as provided for in division (A) of section 2,465
317.32 of the Revised Code. Such copy shall be recorded in the 2,466
records of deeds. 2,467
52
Sec. 1702.39. (A) Unless the articles or the regulations, 2,476
or the terms of any trust on which the corporation holds any 2,477
particular property, otherwise provide, a lease, sale, exchange, 2,478
transfer, or other disposition of any assets of a MUTUAL BENEFIT 2,479
corporation may be made without the necessity of procuring 2,480
authorization from the court under section 1715.39 of the Revised 2,481
Code, upon such terms and for such consideration, which may 2,482
consist, in whole or in part, of money or other property, 2,483
including shares or other securities or promissory obligations of 2,484
any BUSINESS corporation for profit, domestic or foreign, as may 2,485
be authorized by the trustees; provided DIRECTORS, EXCEPT that a 2,486
lease, sale, exchange, transfer, or other disposition of all, or 2,488
substantially all, the assets may be made only when such 2,489
transaction is also authorized (either before or after
authorization by the trustees DIRECTORS) by the voting members 2,490
PRESENT IN PERSON OR, IF PERMITTED, BY PROXY, at a meeting held 2,491
for such purpose, by the affirmative vote of a majority of the 2,493
voting members present if a quorum is present, or, if the 2,494
articles or the regulations provide or permit, by the affirmative 2,495
vote of a greater or lesser proportion or number of the voting
members, and by such affirmative vote of the voting members of 2,496
any particular class as is required by the articles or the 2,497
regulations. Notice of the meeting of the members shall be given 2,498
to all members whether or not entitled to vote thereat. Such 2,500
notice shall be accompanied by a copy or summary of the terms of 2,501
such transaction.
(B)(1) A PUBLIC BENEFIT CORPORATION MAY NOT DISPOSE OF ITS 2,504
ASSETS WITH VALUE EQUAL TO MORE THAN FIFTY PER CENT OF THE FAIR 2,505
MARKET VALUE OF THE NET TANGIBLE AND INTANGIBLE ASSETS, INCLUDING 2,506
GOODWILL, OF THE CORPORATION OVER A PERIOD OF THIRTY-SIX 2,507
CONSECUTIVE MONTHS IN A TRANSACTION OR SERIES OF TRANSACTIONS, 2,508
INCLUDING THE LEASE, SALE, EXCHANGE, TRANSFER, OR OTHER 2,510
DISPOSITION OF THOSE ASSETS, THAT ARE OUTSIDE THE ORDINARY COURSE 2,511
OF ITS BUSINESS OR THAT ARE NOT IN ACCORDANCE WITH THE PURPOSE OR 2,512
53
PURPOSES FOR WHICH THE CORPORATION WAS ORGANIZED, AS SET FORTH IN 2,514
ITS ARTICLES OR THE TERMS OF ANY TRUST ON WHICH THE CORPORATION 2,515
HOLDS SUCH ASSETS, UNLESS ONE OR MORE OF THE FOLLOWING APPLY: 2,516
(a) THE TRANSACTION HAS RECEIVED THE PRIOR APPROVAL OF THE 2,518
COURT OF COMMON PLEAS OF THE COUNTY IN THIS STATE IN WHICH THE 2,519
PRINCIPAL OFFICE OF THE CORPORATION IS LOCATED, IN A PROCEEDING 2,520
OF WHICH THE ATTORNEY GENERAL'S CHARITABLE LAW SECTION HAS BEEN 2,521
GIVEN WRITTEN NOTICE BY CERTIFIED MAIL WITHIN THREE DAYS OF THE 2,523
INITIATION OF THE PROCEEDING, AND IN WHICH PROCEEDING THE 2,524
ATTORNEY GENERAL MAY INTERVENE AS OF RIGHT. 2,525
(b) THE CORPORATION HAS PROVIDED WRITTEN NOTICE OF THE 2,527
PROPOSED TRANSACTION, INCLUDING A COPY OR SUMMARY OF THE TERMS OF 2,528
SUCH TRANSACTION, AT LEAST TWENTY DAYS BEFORE CONSUMMATION OF THE 2,529
LEASE, SALE, EXCHANGE, TRANSFER, OR OTHER DISPOSITION OF THE 2,530
ASSETS, TO THE ATTORNEY GENERAL'S CHARITABLE LAW SECTION AND TO 2,531
THE MEMBERS OF THE CORPORATION, AND THE PROPOSED TRANSACTION HAS 2,533
BEEN APPROVED BY THE VOTING MEMBERS PRESENT IN PERSON OR, IF 2,534
PERMITTED, BY PROXY, AT A MEETING HELD FOR SUCH PURPOSE, BY THE 2,535
AFFIRMATIVE VOTE OF A MAJORITY OF THE VOTING MEMBERS PRESENT IF A 2,536
QUORUM IS PRESENT, OR, IF THE ARTICLES OR REGULATIONS PROVIDE OR 2,537
PERMIT, BY THE AFFIRMATIVE VOTE OF A GREATER OR LESSER PROPORTION 2,538
OR NUMBER OF THE VOTING MEMBERS, AND IF THE ARTICLES OR 2,539
REGULATIONS REQUIRE, BY THE AFFIRMATIVE VOTE OF THE VOTING 2,541
MEMBERS OF ANY PARTICULAR CLASS.
(c) THE TRANSACTION IS IN ACCORDANCE WITH THE PURPOSE OR 2,543
PURPOSES FOR WHICH THE CORPORATION WAS ORGANIZED, AS SET FORTH IN 2,544
ITS ARTICLES OR THE TERMS OF ANY TRUST ON WHICH THE CORPORATION 2,545
HOLDS THE ASSETS, AND THE LESSEE, PURCHASER, OR TRANSFEREE OF THE 2,546
ASSETS IS ALSO A PUBLIC BENEFIT CORPORATION OR A FOREIGN 2,547
CORPORATION THAT WOULD QUALIFY UNDER THE REVISED CODE AS A PUBLIC 2,549
BENEFIT CORPORATION. 2,550
(2) THE ATTORNEY GENERAL MAY REQUIRE, PURSUANT TO SECTION 2,552
109.24 OF THE REVISED CODE, THE PRODUCTION OF THE DOCUMENTS 2,553
NECESSARY FOR REVIEW OF A PROPOSED TRANSACTION UNDER DIVISION 2,555
54
(B)(1) OF THIS SECTION. THE ATTORNEY GENERAL MAY RETAIN, AT THE 2,556
EXPENSE OF THE PUBLIC BENEFIT CORPORATION, ONE OR MORE EXPERTS, 2,558
INCLUDING AN INVESTMENT BANKER, ACTUARY, APPRAISER, CERTIFIED
PUBLIC ACCOUNTANT, OR OTHER EXPERT, THAT THE ATTORNEY GENERAL 2,560
CONSIDERS REASONABLY NECESSARY TO PROVIDE ASSISTANCE IN REVIEWING 2,561
A PROPOSED TRANSACTION UNDER DIVISION (B)(1) OF THIS SECTION. 2,562
(C) THE ATTORNEY GENERAL MAY INSTITUTE A CIVIL ACTION TO 2,564
ENFORCE THE REQUIREMENTS OF DIVISION (B)(1) OF THIS SECTION IN 2,565
THE COURT OF COMMON PLEAS OF THE COUNTY IN THIS STATE IN WHICH 2,566
THE PRINCIPAL OFFICE OF THE CORPORATION IS LOCATED OR IN THE 2,568
FRANKLIN COUNTY COURT OF COMMON PLEAS. IN ADDITION TO ANY CIVIL 2,572
REMEDIES THAT MAY EXIST UNDER COMMON LAW OR THE REVISED CODE, A 2,574
COURT MAY RESCIND THE TRANSACTION OR GRANT INJUNCTIVE RELIEF OR 2,575
IMPOSE ANY COMBINATION OF THESE REMEDIES. 2,576
(D) The corporation by its trustees DIRECTORS may abandon 2,579
the proposed lease, sale, exchange, transfer, or other 2,581
disposition of all or substantially all of the assets of the 2,583
corporation PURSUANT TO DIVISION (A) OR (B) OF THIS SECTION, 2,584
subject to the contract rights of other persons, if such power of 2,585
abandonment is conferred upon the trustees DIRECTORS either by 2,586
the terms of the transaction or by the same vote of voting 2,587
members and at the same meeting of members as that referred to in 2,588
division (A) OR (B) of this section, AS APPLICABLE, or at any 2,590
subsequent meeting.
(C)(E) An action to set aside a conveyance by a 2,592
corporation, on the ground that any section of the Revised Code 2,594
applicable to the lease, sale, exchange, transfer, or other 2,595
disposition of all or substantially all the assets of such 2,596
corporation has not been complied with, shall be brought within 2,597
ninety days ONE YEAR after such transaction, or such THE action 2,599
shall be forever barred. 2,600
Sec. 1702.41. (A)(1) Any two or more corporations may 2,609
merge into a single corporation which shall be one of the 2,610
constituent corporations, or may consolidate into a single 2,611
55
corporation which shall be a new corporation to be formed by the 2,612
consolidation; except that a charitable corporation may merge 2,613
into or may consolidate with other charitable corporations only, 2,614
and the surviving or new corporation, as the case may be, must be 2,615
a charitable corporation. 2,616
(B)(2) To effect such merger or consolidation, the 2,618
trustees DIRECTORS of each constituent corporation shall approve 2,620
an agreement of merger or consolidation to be signed by the 2,621
chairman CHAIRPERSON of the board, THE president, or a 2,623
vice-president, and by the secretary or an assistant secretary, 2,625
which agreement shall set forth:
(1)(a) That the named constituent corporations have agreed 2,627
to merge into a specified constituent corporation, herein 2,628
designated the surviving corporation, or that the named 2,629
constituent corporations have agreed to consolidate into a new 2,630
corporation to be formed by the consolidation, herein designated 2,631
the new corporation; 2,632
(2)(b) The name of the surviving or new corporation, which 2,634
may be the same as or similar to that of any constituent 2,635
corporation; 2,636
(3)(c) The place in this state where the principal office 2,638
of the surviving or new corporation is to be located; 2,639
(4) The purpose or purposes of the surviving or new 2,641
corporation which, in case the constituent corporations are 2,642
charitable corporations, must be such that the surviving or new 2,643
corporation will also be a charitable corporation; 2,644
(5)(d) The names and addresses of the first trustees 2,646
DIRECTORS and officers of the surviving or new corporation, and, 2,648
if desired, their term or terms of office; 2,649
(6)(e) The name and address of the statutory agent upon 2,651
whom any process, notice, or demand against any constituent 2,652
corporation or the surviving or new corporation may be served; 2,653
(7)(f) The terms of the merger or consolidation and the 2,655
mode of carrying the same into effect; 2,656
56
(8)(g) The regulations of the surviving or new corporation 2,658
or a provision to the effect that the regulations of one of the 2,659
constituent corporations shall be the regulations of the 2,660
surviving or new corporation or to the effect that the voting 2,661
members or the trustees DIRECTORS of the surviving or new 2,662
corporation may adopt regulations, or any combination thereof. 2,664
(C)(3) The agreement may also set forth: 2,666
(1)(a) The specification of a date, which may be the date 2,668
of the filing of the agreement or a date subsequent thereto, upon 2,669
which the merger or consolidation shall become effective; 2,670
(2)(b) A provision conferring upon the trustees DIRECTORS 2,673
of one or more of the constituent corporations the power to 2,674
abandon the merger or consolidation prior to the filing of the 2,675
agreement;
(3)(c) Any additional provision permitted to be included 2,677
in the articles of a newly formed corporation; 2,678
(4)(d) Any additional provision deemed necessary or 2,680
desirable with respect to the proposed merger or consolidation. 2,681
(B)(1) WITHOUT THE PRIOR APPROVAL OF THE COURT OF COMMON 2,683
PLEAS OF THE COUNTY IN THIS STATE IN WHICH THE PRINCIPAL OFFICE 2,684
OF THE CORPORATION IS LOCATED, IN A PROCEEDING OF WHICH THE 2,685
ATTORNEY GENERAL'S CHARITABLE LAW SECTION HAS BEEN GIVEN WRITTEN 2,686
NOTICE BY CERTIFIED MAIL WITHIN THREE DAYS OF THE INITIATION OF 2,688
THE PROCEEDING, AND IN WHICH PROCEEDING THE ATTORNEY GENERAL MAY 2,689
INTERVENE AS OF RIGHT, A PUBLIC BENEFIT CORPORATION MAY MERGE OR 2,690
CONSOLIDATE ONLY WITH ANY OF THE FOLLOWING: 2,691
(a) A PUBLIC BENEFIT CORPORATION; 2,693
(b) A FOREIGN CORPORATION THAT WOULD QUALIFY UNDER THE 2,696
REVISED CODE AS A PUBLIC BENEFIT CORPORATION;
(c) A MUTUAL BENEFIT CORPORATION OR A BUSINESS 2,698
CORPORATION, PROVIDED THAT THE PUBLIC BENEFIT CORPORATION IS THE 2,699
SURVIVING CORPORATION IN THE CASE OF A MERGER AND CONTINUES TO BE 2,700
A PUBLIC BENEFIT CORPORATION OR THAT A PUBLIC BENEFIT CORPORATION 2,701
IS THE NEW CORPORATION IN THE CASE OF A CONSOLIDATION; 2,702
57
(d) A BUSINESS CORPORATION OR MUTUAL BENEFIT CORPORATION, 2,704
PROVIDED THAT ALL OF THE FOLLOWING APPLY: 2,705
(i) ON OR PRIOR TO THE EFFECTIVE DATE OF THE MERGER OR 2,707
CONSOLIDATION, ASSETS WITH A VALUE EQUAL TO THE GREATER OF THE 2,709
FAIR MARKET VALUE OF THE NET TANGIBLE AND INTANGIBLE ASSETS, 2,710
INCLUDING GOODWILL, OF THE PUBLIC BENEFIT CORPORATION OR THE FAIR 2,711
MARKET VALUE OF THE PUBLIC BENEFIT CORPORATION IF IT IS TO BE
OPERATED AS A BUSINESS CONCERN, ARE TRANSFERRED OR CONVEYED TO 2,712
ONE OR MORE PERSONS THAT WOULD HAVE RECEIVED ITS ASSETS UNDER 2,713
SECTION 1702.49 OF THE REVISED CODE HAD IT VOLUNTARILY DISSOLVED. 2,714
(ii) IT RETURNS, TRANSFERS, OR CONVEYS ANY ASSETS HELD BY 2,716
IT UPON A CONDITION REQUIRING RETURN, TRANSFER, OR CONVEYANCE, 2,717
WHICH CONDITION OCCURS BY REASON OF THE MERGER OR CONSOLIDATION, 2,718
IN ACCORDANCE WITH THAT CONDITION.
(iii) THE MERGER OR CONSOLIDATION IS APPROVED BY A 2,720
MAJORITY OF DIRECTORS OF THE PUBLIC BENEFIT CORPORATION WHO WILL 2,722
NOT RECEIVE ANY FINANCIAL OR OTHER BENEFIT, DIRECTLY OR 2,723
INDIRECTLY, AS A RESULT OF THE MERGER OR CONSOLIDATION OR BY 2,724
AGREEMENT, AND WHO ARE NOT AND WILL NOT AS A RESULT OF THE MERGER 2,725
OR CONSOLIDATION BECOME MEMBERS OF, SHAREHOLDERS IN, OR OFFICERS, 2,727
EMPLOYEES, AGENTS, OR CONSULTANTS OF THE SURVIVING OR NEW 2,728
BUSINESS CORPORATION OR MUTUAL BENEFIT CORPORATION.
(2) AT LEAST TWENTY DAYS BEFORE CONSUMMATION OF ANY MERGER 2,730
OR CONSOLIDATION OF A PUBLIC BENEFIT CORPORATION PURSUANT TO 2,731
DIVISION (B)(1)(d) OF THIS SECTION, WRITTEN NOTICE, INCLUDING A 2,732
COPY OF THE PROPOSED PLAN OF MERGER OR CONSOLIDATION, SHALL BE 2,734
DELIVERED TO THE ATTORNEY GENERAL'S CHARITABLE LAW SECTION. THE 2,735
ATTORNEY GENERAL'S CHARITABLE LAW SECTION MAY REVIEW A PROPOSED 2,736
MERGER OR CONSOLIDATION OF A PUBLIC BENEFIT CORPORATION UNDER 2,737
DIVISION (B) (1) (d) OF THIS SECTION. THE ATTORNEY GENERAL MAY 2,738
REQUIRE, PURSUANT TO SECTION 109.24 OF THE REVISED CODE, THE 2,741
PRODUCTION OF THE DOCUMENTS NECESSARY FOR REVIEW OF A PROPOSED 2,742
MERGER OR CONSOLIDATION UNDER DIVISION (B)(1)(d) OF THIS SECTION. 2,743
THE ATTORNEY GENERAL MAY RETAIN, AT THE EXPENSE OF THE PUBLIC 2,744
58
BENEFIT CORPORATION, ONE OR MORE EXPERTS, INCLUDING AN INVESTMENT 2,745
BANKER, ACTUARY, APPRAISER, CERTIFIED PUBLIC ACCOUNTANT, OR OTHER 2,746
EXPERT, THAT THE ATTORNEY GENERAL CONSIDERS REASONABLY NECESSARY 2,747
TO PROVIDE ASSISTANCE IN REVIEWING A PROPOSED MERGER OR
CONSOLIDATION UNDER DIVISION (B)(1)(d) OF THIS SECTION. THE 2,749
ATTORNEY GENERAL MAY EXTEND THE DATE OF ANY MERGER OR
CONSOLIDATION OF A PUBLIC BENEFIT CORPORATION UNDER DIVISION (B) 2,750
(1) (d) OF THIS SECTION FOR A PERIOD NOT TO EXCEED SIXTY DAYS AND 2,751
SHALL PROVIDE NOTICE OF THAT EXTENSION TO THE PUBLIC BENEFIT 2,753
CORPORATION. THE NOTICE SHALL SET FORTH THE REASONS 2,754
NECESSITATING THE EXTENSION.
(3) WITHOUT THE PRIOR WRITTEN CONSENT OF THE ATTORNEY 2,756
GENERAL OR OF THE COURT OF COMMON PLEAS OF THE COUNTY IN THIS 2,757
STATE IN WHICH THE PRINCIPAL OFFICE OF THE CORPORATION IS 2,758
LOCATED, IN A PROCEEDING IN WHICH THE ATTORNEY GENERAL'S 2,759
CHARITABLE LAW SECTION HAS BEEN GIVEN WRITTEN NOTICE BY CERTIFIED 2,760
MAIL WITHIN THREE DAYS OF THE INITIATION OF THE PROCEEDING, AND
IN WHICH PROCEEDING THE ATTORNEY GENERAL MAY INTERVENE AS OF 2,761
RIGHT, NO MEMBER OR DIRECTOR OF A PUBLIC BENEFIT CORPORATION IN 2,763
THAT PERSON'S CAPACITY AS A MEMBER OR DIRECTOR MAY RECEIVE OR 2,764
KEEP ANYTHING AS A RESULT OF A MERGER OF CONSOLIDATION OTHER THAN 2,766
MEMBERSHIP OR DIRECTORSHIP IN THE SURVIVING OR NEW PUBLIC BENEFIT 2,768
CORPORATION. THE COURT SHALL APPROVE THE TRANSACTION IF IT IS IN 2,769
THE PUBLIC INTEREST.
(4) THE ATTORNEY GENERAL MAY INSTITUTE A CIVIL ACTION TO 2,771
ENFORCE THE REQUIREMENTS OF DIVISIONS (B)(1), (2), AND (3) OF 2,772
THIS SECTION IN THE COURT OF COMMON PLEAS OF THE COUNTY IN THIS 2,774
STATE IN WHICH THE PRINCIPAL OFFICE OF THE CORPORATION IS LOCATED 2,775
OR IN THE FRANKLIN COUNTY COURT OF COMMON PLEAS. IN ADDITION TO 2,776
ANY CIVIL REMEDIES THAT MAY EXIST UNDER COMMON LAW OR THE REVISED 2,777
CODE, A COURT MAY RESCIND THE TRANSACTION OR GRANT INJUNCTIVE 2,778
RELIEF OR IMPOSE ANY COMBINATION OF THESE REMEDIES.
(C) A CORPORATION MAY BE THE SURVIVING OR NEW ENTITY IN A 2,780
MERGER OR CONSOLIDATION WITH ONE OR MORE BUSINESS CORPORATIONS, 2,782
59
OR A CORPORATION MAY MERGE OR CONSOLIDATE INTO ONE OR MORE 2,783
BUSINESS CORPORATIONS WITH A BUSINESS CORPORATION, A MUTUAL 2,784
BENEFIT CORPORATION, OR A FOREIGN CORPORATION AS THE SURVIVING OR 2,785
NEW ENTITY, PROVIDED THAT THE CORPORATION COMPLIES WITH THE 2,786
PROVISIONS OF THIS SECTION AND SECTIONS 1702.42 AND 1702.43 OF 2,787
THE REVISED CODE, AS APPLICABLE TO THE CORPORATION, AND THAT THE 2,789
BUSINESS CORPORATION COMPLIES WITH THE PROVISIONS OF SECTION 2,790
1701.781 OR 1701.791 OF THE REVISED CODE, AS APPLICABLE TO THE 2,791
BUSINESS CORPORATION. 2,792
Sec. 1702.42. (A) The trustees DIRECTORS of each 2,801
constituent corporation, upon approving such AN agreement of 2,803
merger or consolidation, shall direct that the agreement be 2,805
submitted to the voting members entitled to vote on it at a
meeting of voting members of such corporation held for such THAT 2,806
purpose, and notice of such meeting shall be given to all members 2,808
of such constituent corporation whether or not entitled to vote 2,809
thereat. The notice shall be accompanied by a copy or summary of 2,811
the agreement.
(B) At each such meeting, a vote of the members shall be 2,813
taken on the proposed agreement. In order to be adopted, the 2,814
agreement (including any amendments or additions thereto proposed 2,815
at each such meeting) must receive the affirmative vote of a 2,816
majority of the voting members of each constituent corporation 2,817
present IN PERSON OR, IF PERMITTED, BY MAIL OR BY PROXY, at each 2,818
such meeting if a quorum is present, or, if the articles or the 2,819
regulations of such corporation provide or permit, the
affirmative vote of a greater or lesser proportion or number of 2,820
the voting members, and such affirmative vote of the voting 2,821
members of any particular class as is required by the articles or 2,822
the regulations of such corporation. If the agreement would 2,823
authorize any particular corporate action which THAT, under any 2,825
applicable provision of law or under the existing articles of one
or more of the constituent corporations, could be authorized only 2,826
by or pursuant to a specified vote of voting members, such 2,827
60
agreement (including any amendments or additions thereto proposed 2,828
at each such meeting) in order to be adopted must receive the 2,829
affirmative vote so specified.
(C) At any time prior to the filing of the agreement, the 2,831
merger or consolidation may be abandoned by the trustees 2,832
DIRECTORS of one or more of the constituent corporations, if such 2,834
THE power of abandonment is conferred upon such trustees 2,836
DIRECTORS either by the agreement or by the same vote of voting 2,837
members of each of the constituent corporations and at the same 2,838
meetings as those referred to in division (B) of this section or 2,839
at subsequent meetings.
Sec. 1702.44. When such merger or consolidation becomes 2,849
effective: 2,850
(A) The separate existence of all the constituent 2,852
corporations, except the surviving or new corporation, shall 2,853
cease, except that, whenever a conveyance, assignment, transfer, 2,854
deed, or other instrument, or act, is necessary to vest property 2,855
or rights in the surviving or new corporation, the officers of 2,856
the respective constituent corporation shall execute, 2,857
acknowledge, and deliver such instruments, and do such acts, and 2,858
for such purposes the existence of the constituent corporations 2,859
and the authority of their respective officers and trustees 2,860
DIRECTORS shall be deemed continued notwithstanding the merger or 2,862
consolidation;
(B) The constitutent CONSTITUENT corporations shall become 2,864
a single corporation which, in the case of a merger, shall be 2,865
that one of the constituent corporations designated in the 2,866
agreement of merger as the surviving corporation and, in the case 2,867
of a consolidation, shall be the new corporation provided for in 2,868
the agreement of consolidation; 2,869
(C) The surviving or new corporation shall have all the 2,871
rights, privileges, immunities, powers, franchises, and authority 2,872
and shall be subject to all the obligations of a corporation 2,873
formed under sections 1702.01 to 1702.58 of the Revised Code THIS 2,874
61
CHAPTER; 2,875
(D) The surviving or new corporation shall thereupon and 2,877
thereafter possess all the rights, privileges, immunities, 2,878
powers, franchises, and authority, as well of a public as of a 2,879
private nature, of each of the constituent corporations; and all 2,880
property of every description, and every interest therein, and 2,881
all obligations, of or belonging to or due to each of the 2,882
constituent corporations, shall thereafter be taken and deemed to 2,883
be transferred to and vested in the surviving or new corporation 2,884
without further act or deed; and any right or interest in respect 2,885
to any past or future devise, bequest, conditional gift, or 2,886
trust, property, or fund restricted to particular uses, when 2,887
vested in or claimed by such surviving or new corporation as a 2,888
result of such merger or consolidation, shall belong to it as a 2,889
continuation without interruption of the existence and identity 2,890
of the constituent organization originally named as taker or 2,891
beneficiary; and title to any real estate, or any interest 2,892
therein, vested in any of the constituent corporations shall not 2,893
revert or in any way be impaired by reason of such merger or 2,894
consolidation; 2,895
(E) To the extent permitted by the laws of any other state 2,897
in which any constituent corporation has property, the provisions 2,898
of division (D) of this section apply in such state; 2,899
(F) The surviving or new corporation shall thenceforth be 2,901
liable for all the obligations of each of the constituent 2,902
corporations; and any claim existing or action or proceeding 2,903
pending by or against any of the constituent corporations may be 2,904
prosecuted to judgment, with right of appeal as in other cases, 2,905
as if such merger or consolidation had not taken place, or the 2,906
surviving or new corporation may be substituted in its place; 2,907
(G) All the rights of creditors of each constituent 2,909
corporation shall be preserved unimpaired, and all liens upon the 2,910
property of any of the constituent corporations shall be 2,911
preserved unimpaired, limited in lien to the property affected by 2,912
62
such liens immediately prior to the effective date of the merger 2,913
or consolidation; 2,914
(H) The agreement shall operate as amended articles in the 2,916
case of a merger and as original articles in the case of 2,917
consolidation. 2,918
Sec. 1702.45. One or more domestic corporations may merge 2,927
or consolidate with one or more foreign corporations in the 2,928
following manner, if such merger or consolidation is permitted by 2,929
the laws of each state under the laws of which any constituent 2,930
foreign corporation exists:
(A) Each domestic corporation shall comply with the 2,932
provisions of sections 1702.41, 1702.42, and 1702.43 of the 2,933
Revised Code, and each foreign corporation shall comply with the 2,934
applicable provisions of the laws of the state under which it 2,935
exists, except that the agreement of merger or consolidation, by 2,936
whatever name designated, shall comply with divisions (B) and (C) 2,937
of this section, and except that a charitable corporation may
merge into or may consolidate with other charitable corporations 2,938
only, and the surviving or new corporation, as the case may be, 2,939
must be a charitable corporation ANY MERGER OR CONSOLIDATION OF A 2,940
PUBLIC BENEFIT CORPORATION, WHETHER DOMESTIC OR FOREIGN, SHALL 2,941
COMPLY WITH DIVISION (B) OF SECTION 1702.41 OF THE REVISED CODE; 2,942
(B) The agreement shall set forth all statements and 2,944
matters required by section 1702.41 of the Revised Code, except 2,945
that the statement of the place in this state where the principal 2,946
office of the surviving or new corporation is to be located and 2,947
the statement with respect to the appointment of the statutory 2,948
agent shall be set forth only if the surviving or new corporation
is to be a domestic corporation. In addition, the agreement 2,949
shall set forth:
(1) The names of the states under the laws of which each 2,951
constituent corporation exists; 2,952
(2) All statements and matters required to be set forth in 2,954
agreements of merger or consolidation by the laws of each state 2,955
63
under the laws of which any constituent foreign corporation 2,956
exists;
(3) If the surviving or new corporation is to be a foreign 2,958
corporation:
(a) the place where the principal office of the surviving 2,960
or new corporation is to be located in the state under the laws 2,961
of which the surviving or new corporations is to exist; 2,962
(b) the consent by the surviving or new corporation that 2,964
it may be sued and served with process in this state in any 2,965
proceeding for the enforcement of any obligation of any 2,966
constituent domestic corporation;
(c) the irrevocable appointment of the secretary of state 2,968
of this state as its agent to accept service of process in any 2,969
such proceeding;
(d) if it is desired that the surviving or new corporation 2,971
exercise its corporate privileges in this state as a foreign 2,972
corporation in a continual course of transactions, a statement to 2,973
that effect and a statement with respect to the appointment of 2,974
the statutory agent and with respect to the consent to service of 2,975
any process, notice, or demand upon such statutory agent or the 2,976
secretary of state, as required when a foreign corporation
applies for a certificate authorizing it to do so; 2,977
(C) The agreement may also set forth any additional 2,979
provision permitted by the laws of any state under the laws of 2,980
which any constituent corporation exists, to the extent not 2,981
inconsistent with the laws of the state under the laws of which 2,982
the surviving or new corporation is to exist.
Sec. 1702.47. (A) A corporation may be dissolved 2,991
voluntarily in the manner provided in this section. 2,992
(B) A resolution of dissolution for a corporation shall 2,994
set forth: 2,995
(1) That the corporation elects to be dissolved; 2,997
(2) Any additional provision deemed necessary with respect 2,999
to the proposed dissolution and winding up. 3,000
64
(C) The trustees DIRECTORS may adopt a resolution of 3,002
dissolution in the following cases: 3,004
(1) When the corporation has been adjudged bankrupt or has 3,006
made a general assignment for the benefit of creditors; 3,007
(2) By leave of the court, when a receiver has been 3,009
appointed in a general creditors' suit or in any suit in which 3,010
the affairs of the corporation are to be wound up; 3,011
(3) When substantially all of the assets have been sold at 3,013
judicial sale or otherwise; 3,014
(4) When the period of existence of the corporation 3,016
specified in its articles has expired. 3,017
(D) The voting members at a meeting held for such purpose 3,019
may adopt a resolution of dissolution by the affirmative vote of 3,020
a majority of the voting members present IN PERSON OR, IF 3,021
PERMITTED, BY MAIL OR BY PROXY, if a quorum is present or, if the 3,023
articles or the regulations provide or permit, by the affirmative 3,024
vote of a greater or lesser proportion or number of the voting 3,025
members, and by such affirmative vote of the voting members of 3,026
any particular class as is required by the articles or the 3,027
regulations. Notice of the meeting of the members shall be given 3,028
to all the members whether or not entitled to vote thereat.
(E) Upon the adoption of a resolution of dissolution, a 3,030
certificate shall be prepared, on a form prescribed by the 3,031
secretary of state, setting forth the following: 3,032
(1) The name of the corporation; 3,034
(2) A statement that a resolution of dissolution has been 3,036
adopted; 3,037
(3) A statement of the manner of adoption of such 3,039
resolution, and, in the case of its adoption by the trustees 3,040
DIRECTORS, a statement of the basis for such adoption; 3,042
(4) The place in this state where its principal office is 3,044
or is to be located; 3,045
(5) The names and addresses of its trustees DIRECTORS and 3,047
officers; 3,048
65
(6) The name and address of its statutory agent. 3,050
(F) Such certificate shall be signed by any authorized 3,052
officer, unless the officer fails to execute and file such 3,053
certificate within thirty days after the adoption of the 3,055
resolution, or upon any date specified in the resolution as the 3,056
date upon which such certificate is to be filed, or upon the 3,057
expiration of any period specified in the resolution as the 3,058
period within which such certificate is to be filed, whichever is 3,059
latest, in which event the certificate of dissolution may be 3,060
signed by any three voting members and shall set forth a 3,061
statement that the persons signing the certificate are voting 3,062
members and are filing the certificate because of the failure of 3,063
the officers to do so.
(G) A certificate of dissolution, filed with the secretary 3,065
of state, shall be accompanied by: 3,066
(1) An affidavit of one or more of the persons executing 3,068
the certificate of dissolution or of an officer of the 3,069
corporation containing a statement of the counties, if any, in 3,070
this state in which the corporation has personal property subject 3,071
to personal property taxes or a statement that the corporation is 3,072
of a type required to pay personal property taxes to state 3,073
authorities only; 3,074
(2) A receipt, certificate, or other evidence showing the 3,076
payment of all personal property taxes accruing up to the date of 3,077
such filing, unless the affidavit provided for in division (G)(1) 3,078
of this section states that the corporation has in this state no 3,080
personal property subject to personal property taxes;
(3) A receipt, certificate, or other evidence from the 3,082
director of job and family services showing that all 3,084
contributions due from the corporation as an employer have been 3,085
paid, or that such payment has been adequately guaranteed, or 3,086
that the corporation is not subject to such contributions; 3,087
(4) A receipt, certificate, or other evidence showing the 3,089
payment of all sales, use, and highway use taxes accruing up to 3,090
66
the date of such filing, or that such payment has been adequately 3,091
guaranteed; 3,092
(5) In lieu of the receipt, certificate, or other evidence 3,094
described in division (G)(2), (3), or (4) of this section, an 3,095
affidavit of one or more of the persons executing the certificate 3,096
of dissolution or of an officer of the corporation containing a 3,097
statement of the date upon which the particular department, 3,098
agency, or authority was advised in writing of the scheduled date 3,099
of the filing of the certificate of dissolution and was advised 3,100
in writing of the acknowledgement by the corporation of the 3,101
applicability of section 1702.55 of the Revised Code. 3,102
(H) Upon the filing of a certificate of dissolution and 3,104
such accompanying documents, the corporation shall be dissolved. 3,105
Sec. 1702.48. Following the filing of the certificate of 3,114
dissolution, the trustees DIRECTORS shall forthwith cause a 3,115
notice of voluntary dissolution to be published once a week on 3,117
the same day of each week for two successive weeks, in a 3,118
newspaper published and of general circulation in the county in
which the principal office of the corporation was to be or is 3,119
located, and shall forthwith cause written notice of dissolution 3,120
to be given either personally or by mail to all known creditors 3,121
of, and to all known claimants against, the dissolved 3,122
corporation.
Sec. 1702.49. (A) When a corporation is dissolved 3,131
voluntarily or when the articles of a corporation have been 3,132
canceled or when the period of existence of a corporation 3,133
specified in its articles has expired, the corporation shall 3,134
cease to carry on its activities and shall do only such acts as 3,135
are required to wind up its affairs, or to obtain reinstatement 3,136
of the articles in accordance with section 1702.06, 1702.59, or 3,137
1724.06 of the Revised Code, or are permitted upon reinstatement 3,138
by division (C) of section 1702.60 of the Revised Code, and for 3,139
such purposes it shall continue as a corporation. 3,140
(B) Any claim existing or action or proceding PROCEEDING 3,142
67
pending by or against the corporation or which THAT would have 3,144
accrued against it may be prosecuted to judgment, with right of 3,146
appeal as in other cases, but any proceeding, execution, or 3,147
process, or the satisfaction or performance of any order, 3,148
judgment, or decree, may be stayed as provided in section 1702.50 3,149
of the Revised Code.
(C) Any process, notice, or demand against the corporation 3,151
may be served by delivering a copy to an officer, trustee 3,152
DIRECTOR, liquidator, or person having charge of its assets or, 3,154
if no such person can be found, to the statutory agent. 3,155
(D) The trustees DIRECTORS of the corporation and their 3,157
survivors or successors shall act as a board of trustees 3,159
DIRECTORS in accordance with the regulations and bylaws until the 3,161
affairs of the corporation are completely wound up. Subject to 3,162
the orders of courts of this state having jurisdiction over the 3,163
corporation, the trustees DIRECTORS shall proceed as speedily as 3,165
is practicable to a complete winding up of the affairs of the 3,166
corporation and, to the extent necessary or expedient to that 3,167
end, shall exercise all the authority of the corporation. 3,168
Without limiting the generality of such authority, they may fill 3,169
vacancies, elect officers, carry out contracts of the 3,170
corporation, make new contracts, borrow money, mortgage or pledge 3,171
the property of the corporation as security, sell its assets at 3,172
public or private sale, make conveyances in the corporate name, 3,173
lease real estate for any term, including ninety-nine years 3,174
renewable forever, settle or compromise claims in favor of or 3,175
against the corporation, employ one or more persons as 3,176
liquidators to wind up the affairs of the corporation with such 3,177
authority as the trustees DIRECTORS see fit to grant, cause the 3,178
title to any of the assets of the corporation to be conveyed to 3,179
such liquidators for that purpose, apply assets to the payment of 3,180
obligations, perform all other acts necessary or expedient to the 3,181
winding up of the affairs of the corporation, and, after paying 3,182
or adequately providing for the payment of all known obligations 3,183
68
of the corporation, distribute the remainder of the assets as 3,184
follows: 3,185
(1) Assets held upon condition requiring return, transfer, 3,187
or conveyance, which condition shall have occurred by reason of 3,188
the dissolution or otherwise, shall be returned, transferred, or 3,189
conveyed in accordance with such requirements; 3,190
(2) In the case of a charitable PUBLIC BENEFIT 3,192
corporation: (a) assets held by it in trust for specified 3,194
purposes shall be applied so far as is feasible in accordance 3,195
with the terms of the trust;, (b) the remaining assets not held 3,196
in trust shall be applied so far as is feasible towards carrying 3,197
out the purposes stated in its articles;, (c) in the event and to 3,198
the extent that, in the judgment of the trustees DIRECTORS, it is 3,199
not feasible to apply the assets as provided in above clauses (a) 3,201
and (b), the assets shall be applied as may be directed by the 3,202
court of common pleas of the county in this state in which the 3,203
principal office of the corporation is located, in an action 3,204
brought for that purpose by the corporation or by the trustees 3,205
DIRECTORS or any thereof, to which action the attorney general of 3,207
the state shall be a party, or in an action brought by the 3,208
attorney general in a court of competent jurisdiction, or in an 3,209
action brought as provided in section 1702.50 of the Revised Code 3,210
for the purpose of winding up the affairs of the corporation 3,211
under the supervision of the court;
(3) In the case of a MUTUAL BENEFIT corporation other than 3,213
a charitable corporation, any remaining assets shall be 3,215
distributed in accordance with the applicable provisions of the 3,216
articles or the regulations or, to the extent that no such 3,217
provision is made, the assets shall be distributed pursuant to a 3,218
plan of distribution adopted by the voting members at a meeting 3,219
held for the purpose of voting on dissolution, or any adjournment 3,220
thereof, by the same affirmative vote as that required for the 3,221
adoption of a resolution of dissolution. If no plan of 3,222
distribution is so adopted by the voting members, then said 3,223
69
remaining assets shall be distributed pursuant to a plan of 3,224
distribution adopted by the trustees DIRECTORS. IF NO PLAN OF 3,225
DISTRIBUTION IS SO ADOPTED BY THE VOTING MEMBERS OR DIRECTORS, 3,226
THEN THE REMAINING ASSETS SHALL BE APPLIED AS MAY BE DIRECTED BY 3,227
THE COURT OF COMMON PLEAS OF THE COUNTY IN THIS STATE IN WHICH
THE PRINCIPAL OFFICE OF THE CORPORATION IS LOCATED, IN AN ACTION 3,228
BROUGHT FOR THAT PURPOSE BY THE MUTUAL BENEFIT CORPORATION OR BY 3,229
THE DIRECTORS OR ANY THEREOF, OR BY THE ATTORNEY GENERAL IN A 3,230
COURT OF COMPETENT JURISDICTION, OR IN AN ACTION BROUGHT AS 3,231
PROVIDED IN SECTION 1702.50 OF THE REVISED CODE FOR THE PURPOSE
OF WINDING UP THE AFFAIRS OF THE CORPORATION UNDER THE 3,232
SUPERVISION OF THE COURT.
(E) Without limiting the authority of the trustees 3,234
DIRECTORS, any action within the purview of this section which 3,236
THAT is authorized or approved by the voting members at a meeting 3,238
held for such purpose, by the same affirmative vote as that 3,239
required for the adoption of a resolution of dissolution, shall 3,240
be conclusive for all purposes upon all members of the 3,241
corporation, except that nothing herein set forth shall impair 3,242
the jurisdiction of courts of competent jurisdiction to enforce 3,243
the duties of a charitable PUBLIC BENEFIT corporation in respect 3,245
of the application of its assets towards ITS PUBLIC OR charitable 3,246
purposes, or impair the power of the state, acting through the 3,248
attorney general, to require such assets to be applied, as nearly 3,249
as may be, towards ITS PUBLIC OR charitable purposes. 3,250
(F) All deeds and other instruments of the corporation 3,252
shall be in the name of the corporation and shall be executed, 3,253
acknowledged, and delivered by the officers appointed by the 3,254
trustees DIRECTORS. 3,255
(G) At any time during the winding up of its affairs, the 3,257
corporation by its trustees DIRECTORS may make application to the 3,259
court of common pleas of the county in this state in which the 3,260
principal office of the corporation is located to have the 3,261
winding up continued under supervision of the court, as provided 3,262
70
in section 1702.50 of the Revised Code. 3,263
Sec. 1702.50. (A) Without limiting the generality of its 3,272
authority, the court of common pleas of the county in this state 3,273
in which is located the principal office of a voluntarily 3,274
dissolved corporation or of a corporation whose articles have 3,275
been canceled or whose period of existence has expired, upon the 3,276
complaint of the corporation, a majority of the trustees 3,277
DIRECTORS, or a creditor or member, and upon such notice to all 3,279
the trustees DIRECTORS and such other persons interested as the 3,281
court considers proper, at any time may order and adjudge in 3,282
respect to the following matters: 3,283
(1) The presentation and proof of all claims and demands 3,285
against the corporation and of all rights, interests, or liens in 3,286
or on any of its property; the fixing of the time within which 3,287
and the manner in which such proof shall be made and the person 3,288
to whom such presentation shall be made; and the barring from 3,289
participation in any distribution of assets of all persons 3,290
failing to make and present proofs as required by the order of 3,291
the court; 3,292
(2) The stay of the prosecution of any proceeding against 3,294
the corporation or involving any of its property, and the 3,295
requirement that the parties to it present and prove their 3,296
claims, demands, rights, interests, or liens at the time and in 3,297
the manner required of creditors or others; or the grant of leave 3,298
to bring or maintain an independent proceeding to enforce liens; 3,299
(3) The settlement or determination of all claims of every 3,301
nature against the corporation or any of its property; the 3,302
determination of the assets required to be retained to pay or 3,303
provide for the payment of such claims or any claim; the 3,304
determination of the assets available for distribution among 3,305
members and others; and the making of new parties to the 3,306
proceeding so far as the court considers proper for the 3,307
determination of all matters; 3,308
(4) The determination of the rights of members or others 3,310
71
in and to the assets of the corporation; 3,311
(5) The presentation and the filing of intermediate and 3,313
final accounts of the trustees DIRECTORS or of the liquidators 3,314
and hearings on them; the allowance, disallowance, or settlement 3,316
of such accounts; and the discharge of the trustees DIRECTORS, 3,317
the liquidators, or any of them from their duties and 3,319
liabilities;
(6) The appointment of a special master commissioner to 3,321
hear and determine any such matters with such authority as the 3,322
court considers proper; 3,323
(7) The filling of any vacancies in the number of trustees 3,325
DIRECTORS or liquidators when the trustees DIRECTORS are unable 3,327
to act on the vacancies for want of a quorum or for any other 3,329
reason;
(8) The appointment of a receiver, in accordance with the 3,331
usages of a court in equitable matters, to wind up the affairs of 3,332
the corporation, to take custody of any of its property, or for 3,333
any other purpose; 3,334
(9) The issuance or entry of any injunction or any other 3,336
order which THAT the court considers proper in the administration 3,338
of the trust involved in the winding up of the affairs of the 3,339
corporation and the giving of notice of it; 3,340
(10) The allowance and payment of compensation to the 3,342
trustees DIRECTORS or any of them, to liquidators, to a receiver, 3,344
to the attorney for the complainant, or to any person properly 3,345
rendering services beneficial to the corporation or to those 3,346
interested in it; 3,347
(11) The entry of a judgment or decree which THAT, if it 3,349
so provides, may operate as the deed or other instrument ordered 3,350
to be executed, or the appointment of a master to execute such 3,351
deed or instrument in the name of the corporation with the same 3,352
effect as if executed by an authorized officer pursuant to 3,353
authority conferred by the trustees DIRECTORS or the voting 3,354
members of the corporation, whenever there is no officer or agent 3,355
72
competent to execute such deed or instrument, whenever the 3,356
corporation or its officers do not perform or comply with a 3,357
judgment or decree of court, or whenever the court considers it 3,358
proper.
(B) A judicial proceeding under this section concerning 3,360
the winding up of the affairs of a corporation is a special 3,361
proceeding, and final orders in the proceeding may be vacated, 3,362
modified, or reversed on appeal pursuant to the Rules of 3,363
Appellate Procedure and, to the extent not in conflict with those 3,364
rules, Chapter 2505. of the Revised Code. 3,365
Sec. 1702.51. (A) Whenever, after a corporation is 3,374
dissolved voluntarily or the articles of a corporation have been 3,375
canceled or the the period of existence of a corporation has 3,376
expired, a receiver is appointed to wind up the affairs of the 3,377
corporation, all the claims, demands, rights, interests, or liens 3,378
of creditors, claimants, and members shall be determined as of
the day on which the receiver was appointed. Unless it is 3,379
otherwise ordered, such appointment vests in the receiver and his 3,380
THE RECEIVER'S successors the right to the immediate possession 3,382
of all the property of the corporation, which shall, if so 3,383
ordered, execute and deliver conveyances of such property to the 3,384
receiver or his THE RECEIVER'S nominee. 3,385
(B) Any officer, trustee DIRECTOR, member, or other 3,387
person, whether a resident of the state or a non-resident 3,389
NONRESIDENT and however interested, may be appointed as receiver. 3,390
(C) The receiver shall have all the authority vested in 3,392
the trustees DIRECTORS and officers of the corporation, shall 3,394
exercise such authority subject to such orders as are made by the 3,395
court, and may be required to qualify by giving bond to the state 3,396
in such amount as the court fixes, with surety to the
satisfaction of the clerk of the court, conditioned for the 3,397
faithful discharge of his THE RECEIVER'S duties and for a due 3,398
accounting for all money or property received by him THE 3,399
RECEIVER.
73
Sec. 1702.52. (A) A corporation may be dissolved 3,408
judicially and its affairs wound up: 3,409
(1) By an order of the supreme court or of a court of 3,411
appeals in an action in quo warranto brought as provided by 3,412
sections 2733.02 to 2733.39 of the Revised Code, in which event 3,413
the court may order the affairs of the corporation to be wound up 3,414
by its trustees DIRECTORS as in the case of voluntary 3,415
dissolution, or by proceedings in, and under the order of, the 3,417
court of common pleas of the county in this state in which the 3,418
corporation has its principal office; 3,419
(2) By an order of the court of common pleas of the county 3,421
in this state in which such corporation has its principal office, 3,422
in an action brought by voting members entitled to dissolve the 3,423
corporation voluntarily, when it is established: 3,424
(a) That its articles have been canceled or its period of 3,426
existence has expired and that it is necessary in order to 3,427
protect the members that the corporation be judicially dissolved; 3,428
(b) That the corporation is insolvent or is unable to 3,430
afford reasonable security to those who may deal with it and that 3,431
it is necessary in order to protect the creditors of the 3,432
corporation that the corporation be judicially dissolved; 3,433
(c) That the objects of the corporation have wholly failed 3,435
or are entirely abandoned or that their accomplishment is 3,436
impracticable; 3,437
(3) By an order of the court of common pleas of the county 3,439
in this state in which the corporation has its principal office, 3,440
in an action brought by a majority of the voting members, or such 3,441
lesser proportion or number of voting members as are entitled by 3,442
the articles to dissolve the corporation voluntarily, when it is 3,443
established that it is beneficial to the members that the 3,444
corporation be judicially dissolved; 3,445
(4) By an order of the court of common pleas of the county 3,447
in this state in which the corporation has its principal office, 3,448
in an action brought by one-half of the trustees DIRECTORS when 3,449
74
there is an even number of trustees DIRECTORS or by one-half of 3,451
the voting members, when it is established that the corporation 3,453
has an even number of trustees DIRECTORS who are deadlocked in 3,454
the management of the corporate affairs and the voting members 3,456
are unable to break the deadlock, or when it is established that 3,457
the corporation has an uneven number of trustees DIRECTORS and 3,458
that the voting members are deadlocked in voting power and unable 3,460
to agree upon or vote for the election of trustees DIRECTORS as 3,461
successors to trustees DIRECTORS whose terms normally would 3,462
expire upon the election of their successors. 3,463
(B) A complaint for judicial dissolution shall be verified 3,465
by any of the complainants and shall set forth facts showing that 3,466
the case is one of those specified in this section. Unless the 3,467
complainants set forth in the complaint that they are unable to 3,468
annex a list of members, a schedule shall be annexed to the 3,469
complaint setting forth the name of each member and his THE 3,470
MEMBER'S address if it is known. 3,471
(C) Upon the filing of a complaint for judicial 3,473
dissolution, the court with which it is filed shall have power to 3,474
issue injunctions, to appoint a receiver with such authority and 3,475
duties as the court from time to time may direct, to take such 3,476
other proceedings as may be necessary to protect the property or 3,477
the rights of the complainants or of the persons interested, and 3,478
to carry on the activities of the corporation until a full 3,479
hearing can be had. Upon or after the filing of a complaint for 3,480
judicial dissolution, the court, by injunction or order, may stay 3,481
the prosecution of any proceeding against the corporation or 3,482
involving any of its property and require the parties to it to 3,483
present and prove their claims, demands, rights, interests, or 3,484
liens, at the time and in the manner required of creditors or 3,485
others. The court may refer the complaint to a special master 3,486
commissioner. 3,487
(D) After a hearing had upon such notice as the court may 3,489
direct to be given to all parties to the proceeding and to any 3,490
75
other parties in interest designated by the court, a final order 3,491
based either upon the evidence, or upon the report of the special 3,492
master commissioner if one has been appointed, shall be made 3,493
dissolving the corporation or dismissing the complaint. An order 3,494
or judgment for the judicial dissolution of a corporation shall 3,495
contain a concise statement of the proceedings leading up to the 3,496
order or judgment; the name of the corporation; the place in this 3,497
state where its principal office is located; the names and 3,498
addresses of its trustees DIRECTORS and officers; the name and 3,499
address of a statutory agent; and, if desired, such other 3,501
provisions with respect to the judicial dissolution and winding 3,502
up as are considered necessary or desirable. A certified copy of 3,503
such order forthwith shall be filed in the office of the 3,504
secretary of state, whereupon the corporation shall be dissolved. 3,505
To the extent consistent with orders entered in such proceeding, 3,506
the effect of such judicial dissolution shall be the same as in 3,507
the case of voluntary dissolution, and the provisions of sections 3,508
1702.49, 1702.50, and 1702.51 of the Revised Code relating to the 3,509
authority and duties of trustees DIRECTORS during the winding up 3,510
of the affairs of a corporation dissolved voluntarily, with 3,512
respect to the jurisdiction of courts over the winding up of the 3,513
affairs of a corporation, and with respect to receivers for 3,514
winding up the affairs of a corporation shall be applicable to 3,515
corporations judicially dissolved. 3,516
(E) A judicial proceeding under this section concerning 3,518
the judicial dissolution of a corporation is a special 3,519
proceeding, and final orders in the proceeding may be vacated, 3,520
modified, or reversed on appeal pursuant to the Rules of 3,521
Appellate Procedure or the Rules of Practice of the Supreme 3,522
Court, whichever are applicable, and, to the extent not in 3,523
conflict with those rules, Chapter 2505. of the Revised Code. 3,524
Sec. 1702.521. (A) Upon the complaint of not less than 3,533
one-fourth of the trustees DIRECTORS of the corporation, the 3,534
court of common pleas of the county in which the corporation 3,536
76
maintains its principal office may order the appointment of a 3,537
provisional trustee DIRECTOR for that corporation if the articles 3,538
or regulations of the corporation expressly provide for such an 3,540
appointment. No appointment shall be made until a hearing is 3,541
held by the court. Notice of the hearing shall be given to each 3,542
trustee DIRECTOR and the secretary of the corporation in any 3,544
manner that the court directs. The complainants shall establish 3,545
at the hearing that, because of irreconcilable differences among 3,546
the existing trustees DIRECTORS, the continued operation of the 3,547
corporation has been substantially impeded or made impossible. 3,549
(B) A provisional trustee DIRECTOR shall have the same 3,551
rights and duties as other trustees DIRECTORS and shall serve 3,553
until removed by the appointing court or by the members of the 3,555
corporation entitled to exercise a majority of the voting power 3,556
of the corporation in the election of trustees DIRECTORS or until 3,557
his THE PROVISIONAL DIRECTOR'S earlier resignation or death. If 3,560
the provisional trustee DIRECTOR dies or resigns, the court,
pursuant to division (A) of this section, may appoint a 3,562
replacement provisional trustee DIRECTOR, upon its own motion and 3,563
without the filing of a complaint for the appointment of a 3,565
provisional trustee DIRECTOR. If the appointing court finds that 3,567
the irreconcilable differences no longer exist, it shall order 3,568
the removal of the provisional trustee DIRECTOR. 3,569
(C) No person shall be appointed as a provisional trustee 3,571
DIRECTOR unless he THE PERSON is generally conversant with 3,573
corporate affairs, has no legal or equitable interest in the 3,575
obligations of the corporation of which he THE PERSON is to be 3,576
appointed a trustee DIRECTOR, and is not indebted to such 3,579
corporation. The compensation of a provisional trustee DIRECTOR 3,580
shall be determined by agreement with the corporation for which 3,581
he THE PROVISIONAL DIRECTOR is serving, subject to the approval 3,582
of the appointing court, except that the appointing court may fix 3,584
his THE PROVISIONAL DIRECTOR'S compensation in the absence of 3,586
agreement or in the event of disagreement between the provisional 3,587
77
trustee DIRECTOR and the corporation.
(D) A proceeding concerning the appointment of a 3,589
provisional trustee DIRECTOR of a corporation is a special 3,590
proceeding, and final orders issued in the proceeding may be 3,592
vacated, modified, or reversed on appeal pursuant to the Rules of 3,593
Appellate Procedure and, to the extent not in conflict with those 3,594
rules, Chapter 2505. of the Revised Code. 3,595
Sec. 1702.53. (A) A copy of the articles or amended 3,604
articles filed in the office of the secretary of state, certified 3,605
by the secretary of state, shall be conclusive evidence, except 3,606
as against the state, that the corporation has been incorporated 3,607
under the laws of this state; and a copy duly certified by the 3,608
secretary of state of any certificate of amendment or other
certificate filed in his THE SECRETARY OF STATE'S office shall be 3,609
prima-facie evidence of such amendment or of the facts stated in 3,612
any such certificate, and of the observance and performance of
all antecedent conditions necessary to the action which such 3,613
certificate purports to evidence. 3,614
(B) A copy of amended articles filed in the office of the 3,616
secretary of state, certified by the secretary of state, shall be 3,617
accepted in this state and other jurisdictions in lieu of the 3,618
original articles, amendments thereto, and prior amended 3,619
articles.
(C) The original or a copy of the record of minutes of the 3,621
proceedings of the incorporators of a corporation, or of the 3,622
proceedings or meetings of the members or any class of members, 3,623
or of the trustees DIRECTORS, or of any committee thereof, 3,625
including any written consent, waiver, release, or agreement
entered in such record or minutes, or the original or a copy of a 3,626
statement that no specified proceeding was had or that no 3,627
specified consent, waiver, release, or agreement exists, shall, 3,628
when certified to be true by the secretary or an assistant 3,629
secretary of a corporation, be received in the courts as
prima-facie evidence of the facts stated therein. Every meeting 3,630
78
referred to in such certified original or copy shall be deemed 3,631
duly called and held, and all motions and resolutions adopted and 3,632
proceedings had at such meeting shall be deemed duly adopted and 3,633
had, and all elections of trustees DIRECTORS and all elections or 3,635
appointments of officers chosen at such meeting shall be deemed
valid, until the contrary is proved; and whenever a person who is 3,636
not a member of a corporation has acted in good faith in reliance 3,637
upon any such certified original or copy, it is conclusive in his 3,638
THE PERSON'S favor.
Sec. 1702.54. (A) No officer, trustee DIRECTOR, employee, 3,647
or agent of a corporation shall, either alone or with another or 3,649
others, with intent to deceive:
(1) Make, issue, deliver, transmit by mail, or publish any 3,651
prospectus, report, circular, certificate, statement, balance 3,652
sheet, exhibit, or document, respecting membership rights in, or 3,653
the activities, assets, liabilities, earnings, or accounts of, a 3,654
corporation, which THAT is false in any material respect, knowing 3,656
the same to be false;
(2) Having charge of any books, minutes, records, or 3,658
accounts of a corporation, make therein any entry which THAT is 3,659
false in any material respect, knowing such entry to be false, or 3,661
remove, erase, alter, or cancel any entry therein, knowing that 3,662
the entries resulting therefrom will be false.
(B) Whoever violates this section shall be personally 3,664
liable, jointly and severally, with all other persons 3,665
participating with him THE PERSON in any such act, to any person 3,667
for any damage actually suffered and proximately resulting from
such act. 3,668
(C) No action to enforce a liability under this section 3,670
shall be brought after four years from the time of the act 3,671
complained of.
(D) Remedies under this section are not exclusive of other 3,673
remedies at common law or under other statutes. 3,674
Sec. 1702.55. (A) The members, the trustees DIRECTORS, 3,683
79
and the officers of a corporation shall not be personally liable 3,684
for any obligation of the corporation. 3,685
(B) Trustees DIRECTORS who vote for or assent to: 3,687
(1) A distribution of assets to members contrary to law or 3,689
the articles; 3,690
(2) A distribution of assets to persons other than 3,692
creditors during the winding up of the affairs of the 3,693
corporation, on dissolution or otherwise, without the payment of 3,694
all known obligations of the corporation, or without making 3,695
adequate provision therefor; 3,696
(3) The making of loans, other than in the usual conduct 3,698
of its affairs or in accordance with provisions therefor in the 3,699
articles, to an officer, trustee DIRECTOR, or member of the 3,700
corporation; shall be jointly and severally liable to the 3,702
corporation as follows: in cases under division (B)(1) of this 3,703
section up to the amount of such distribution in excess of the 3,704
amount that could have been distributed without violation of law 3,705
or the articles, but not in excess of the amount that would inure 3,706
to the benefit of the creditors of the corporation if it was 3,707
insolvent at the time of the distribution or there was reasonable 3,708
ground to believe that by such action it would be rendered 3,709
insolvent, or to the benefit of the members other than members of 3,710
the class in respect of which the distribution was made; and in 3,711
cases under division (B)(2) of this section, to the extent that 3,712
such obligations (not otherwise barred by statute) are not paid, 3,713
or for the payment of which adequate provision has not been made; 3,714
and in cases under division (B)(3) of this section, for the 3,715
amount of the loan with interest thereon at the rate of six per 3,716
cent per annum until such amount has been paid, provided, EXCEPT 3,717
that a trustee DIRECTOR shall not be liable under division (B)(1) 3,719
or (2) of this section if in determining the amount available for 3,721
any such distribution, he THE DIRECTOR in good faith relied on a 3,722
financial statement of the corporation prepared by an officer or 3,725
employee of the corporation in charge of its accounts or 3,726
80
certified by a public accountant or firm of public accountants, 3,727
or in good faith he THE DIRECTOR considered the assets to be of 3,729
their book value, or he THE DIRECTOR followed what he THE 3,731
DIRECTOR believed to be sound accounting and business practice. 3,733
(C) A trustee DIRECTOR who is present at a meeting of the 3,735
trustees DIRECTORS or a committee thereof at which action on any 3,737
matter is authorized or taken and who has not voted for or 3,738
against such action shall be presumed to have voted for the 3,739
action unless his THE DIRECTOR'S written dissent therefrom is 3,741
filed either during the meeting or within a reasonable time after 3,742
the adjournment thereof, with the person acting as secretary of 3,743
the meeting or with the secretary of the corporation. 3,744
(D) A member who knowingly receives any distribution made 3,746
contrary to law or the articles shall be liable to the 3,747
corporation for the amount received by him which THE MEMBER THAT 3,748
is in excess of the amount which THAT could have been distributed 3,751
without violation of law or the articles. 3,753
(E) A trustee DIRECTOR against whom a claim is asserted 3,755
under or pursuant to this section and who is held liable thereon 3,757
shall be entitled to contribution, on equitable principles, from 3,758
other trustees DIRECTORS who also are liable; and in addition, 3,759
any trustee DIRECTOR against whom a claim is asserted under or 3,761
pursuant to this section or who is held liable shall have a right 3,762
of contribution from the members who knowingly received any 3,763
distribution made contrary to law or the articles, and such 3,764
members as among themselves shall also be entitled to 3,765
contribution in proportion to the amounts received by them 3,766
respectively.
(F) No action shall be brought by or on behalf of a 3,768
corporation upon any cause of action arising under division 3,769
(B)(1) or (2) of this section at any time after two years from 3,770
the day on which the violation occurs; provided that no such 3,771
action shall be barred by this division (F) prior to January 1, 3,772
1956. 3,773
81
(G) Nothing contained in this section shall preclude any 3,775
creditor whose claim is unpaid from exercising such rights as he 3,776
THE CREDITOR otherwise would have by law to enforce his THE 3,778
CREDITOR'S claim against assets of the corporation distributed to 3,780
members or other persons.
Sec. 1702.58. (A) Except as provided in sections 1702.01 3,789
to 1702.58, inclusive, of the Revised Code, the provisions of 3,790
said THOSE sections shall apply only to domestic corporations, 3,793
and except as otherwise provided in this section, the provisions 3,794
of said THOSE sections shall apply to all domestic corporations, 3,796
whether formed under said THOSE sections or under previous laws 3,797
of this state. 3,798
(B) Special provisions in the Revised Code for the 3,800
organization, conduct, or government of designated classes of 3,801
corporations shall govern to the exclusion of the provisions of 3,802
sections 1702.01 to 1702.58, inclusive, of the Revised Code, on 3,804
the same subject, except where it clearly appears that a special 3,805
provision is cumulative, in which case it THAT PROVISION and the 3,806
provisions of said THOSE sections on the same subject shall 3,808
apply.
(C) A corporation incorporated prior to June 9, 1927, with 3,810
authority to issue shares may continue to issue and re-issue 3,811
REISSUE shares in accordance with its articles, but shall be 3,813
without authority to amend its articles in order to increase the 3,814
authorized number of shares.
(D) A corporation created before September 1, 1851, which 3,816
THAT (1) has expressly elected to be governed by the laws passed 3,818
since that date, (2) subsequent to that date has taken such 3,819
action under laws then in effect as to make it subject, as a 3,820
matter of law, to the Constitution of 1851 and laws passed
thereunder, or (3) subsequent to October 1, 1955, takes any 3,821
action under sections 1702.01 to 1702.58, inclusive, of the 3,822
Revised Code, or any of them, which THAT but for said THOSE 3,824
sections it would not be authorized to take, shall be deemed to 3,826
82
be a corporation exercising its corporate privileges under the
Constitution of this state and the laws passed in pursuance 3,827
thereof, and not otherwise. 3,828
(E) A corporation created before September 1, 1851, and 3,830
actually carrying on its activities in this state, and which 3,831
prior to October 11, 1955, has not taken action described in 3,833
division (D) of this section, may accept the provisions of 3,834
sections 1702.01 to 1702.58, inclusive, of the Revised Code, at a 3,836
meeting of voting members held for such purpose, by a resolution
to that effect adopted by the affirmative vote of a majority of 3,837
the voting members present IN PERSON OR, IF PERMITTED, BY MAIL OR 3,838
BY PROXY, if a quorum is present, and by filing in the office of 3,839
the secretary of state a copy of said THE resolution certified by 3,841
the president or a vice-president and the secretary or an 3,843
assistant secretary ANY AUTHORIZED OFFICER of the corporation, 3,844
for which filing the secretary of state shall charge and collect 3,845
a fee of five dollars. Thereafter said THE corporation shall be 3,846
deemed to exercise its corporat CORPORATE privileges under the 3,848
Constitution of this state and the laws passed in pursuance 3,851
thereof, and not otherwise.
(F) Except as provided in divisions (D) and (E) of this 3,853
section, a corporation created before September 1, 1851, shall be 3,854
governed by the laws in force on that date as modified since that 3,855
date.
(G) A domestic BUSINESS corporation for profit, upon 3,857
compliance with the provision of the Revised Code as in effect 3,859
from time to time relating to such BUSINESS corporation's 3,860
becoming a nonprofit corporation upon amendment to its articles 3,861
or upon adoption of amended articles, as provided by law, shall, 3,862
upon filing the prescribed certificate in the office of the 3,863
secretary of state, become a corporation subject to the 3,864
provisions of, and entitled to all the rights, privileges, 3,865
immunities, powers, franchises, and authority granted by,
sections 1702.01 to 1702.58, inclusive, of the Revised Code THIS 3,867
83
CHAPTER.
Sec. 1702.59. (A) Every nonprofit corporation, 3,876
incorporated under the general corporation laws of this state, or 3,877
previous laws, or under special provisions of the Revised Code, 3,878
or created before September 1, 1851, which corporation has 3,879
expressedly or impliedly elected to be governed by the laws 3,880
passed since that date, and whose articles or other documents are 3,881
filed with the secretary of state, shall file with the secretary 3,882
of state a verified statement of continued existence, signed by a 3,883
trustee DIRECTOR, officer, or three members in good standing, 3,885
setting forth the corporate name, the place where the principal 3,886
office of the corporation is located, the date of incorporation, 3,887
the fact that the corporation is still actively engaged in 3,888
exercising its corporate privileges, and the name and address of 3,889
its agent appointed pursuant to section 1702.06 of the Revised 3,890
Code.
(B) Each corporation required to file a statement of 3,893
continued existence shall file it with the secretary of state 3,894
within each five years after the date of incorporation or of the 3,895
last corporate filing. For filing such statements of continued 3,896
existence, the secretary of state shall charge and collect a fee
of five dollars. 3,897
(C) Corporations specifically exempted by division (N) of 3,899
section 1702.06 of the Revised Code, or whose activities are 3,900
regulated or supervised by another state official, agency, 3,901
bureau, department, or commission are exempted from this section. 3,902
(D) The secretary of state shall give notice in writing 3,904
and provide a form for compliance with this section to each 3,905
corporation required by this section to file the statement of 3,906
continued existence, such notice and form to be mailed to the 3,907
last known address of the corporation as it appears on the 3,908
records of the secretary of state or which the secretary of state 3,910
may ascertain upon a reasonable search. 3,911
(E) In the event any nonprofit corporation required by 3,913
84
this section to file a statement of continued existence fails to 3,914
file the statement required every fifth year, then the secretary 3,915
of state shall cancel the articles of such corporation, make a 3,916
notation of the cancellation on the records, and mail to the 3,917
corporation a certificate of the action so taken. 3,918
(F) A corporation whose articles have been canceled may be 3,920
reinstated by filing an application for reinstatement and paying 3,921
to the secretary of state a fee of ten dollars. The name of a 3,922
corporation whose articles have been canceled shall be reserved 3,923
for a period of one year after the date of cancellation. If the 3,924
reinstatement is not made within one year from the date of the 3,925
cancellation of its articles of incorporation and it appears that 3,926
a corporate name, limited liability company name, limited 3,928
liability partnership name, limited partnership name, or trade
name has been filed, the name of which is not distinguishable 3,929
upon the record as provided in section 1702.06 of the Revised 3,930
Code, the applicant for reinstatement shall be required by the 3,932
secretary of state, as a condition prerequisite to such 3,933
reinstatement, to amend its articles by changing its name. A 3,934
certificate of reinstatement may be filed in the recorder's 3,935
office of any county in the state, for which the recorder shall 3,936
charge and collect a fee of one dollar. The rights, privileges, 3,937
and franchises of a corporation whose articles have been
reinstated are subject to section 1702.60 of the Revised Code. 3,938
(G) The secretary of state shall furnish the tax 3,940
commissioner a list of all corporations failing to file the 3,941
required statement of continued existence. 3,942
Section 2. That existing sections 1701.01, 1702.01, 3,944
1702.02, 1702.03, 1702.04, 1702.05, 1702.06, 1702.07, 1702.08, 3,945
1702.10, 1702.11, 1702.12, 1702.13, 1702.14, 1702.15, 1702.16, 3,946
1702.17, 1702.18, 1702.19, 1702.21, 1702.22, 1702.23, 1702.25, 3,947
1702.26, 1702.27, 1702.28, 1702.29, 1702.30, 1702.301, 1702.31, 3,948
1702.32, 1702.33, 1702.34, 1702.36, 1702.38, 1702.39, 1702.41, 3,949
1702.42, 1702.44, 1702.45, 1702.47, 1702.48, 1702.49, 1702.50, 3,950
85
1702.51, 1702.52, 1702.521, 1702.53, 1702.54, 1702.55, 1702.58, 3,951
and 1702.59 of the Revised Code are hereby repealed. 3,952
Section 3. Any trustee of a nonprofit corporation that was 3,954
organized prior to the effective date of this act shall be 3,955
considered a director, as defined in division (K) of section 3,956
1702.01 of the Revised Code as amended by this act, of the 3,957
nonprofit corporation and shall have the rights, privileges, and
responsibilities of a director of a nonprofit corporation under 3,958
Chapter 1702. of the Revised Code. A nonprofit corporation that 3,959
was organized prior to the effective date of this act is not 3,960
required to take any action to convey these rights, privileges, 3,961
and responsibilities of directors to the trustees of the
nonprofit corporation. 3,962
Section 4. The General Assembly hereby declares that the 3,964
General Assembly, by enacting any provision of this act, does not 3,965
intend to repeal any provision of sections 109.34, 109.35, and 3,966
109.99 of the Revised Code.