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To amend sections 1701.13, 1701.59, 1701.66, 1701.74, | 1 |
1701.76, 1701.84, 1701.85, 1701.86, 1701.87, | 2 |
1701.88, 1701.89, 1701.90, 1701.91, 1701.911, | 3 |
1702.12, 1702.30, and 1705.61 and to enact | 4 |
sections 1701.881, 1701.882, and 1701.883 of the | 5 |
Revised Code to make changes to the law governing | 6 |
corporations including dissenting shareholders, | 7 |
the dissolution of a corporation, rights to | 8 |
indemnification or advancement of expenses, | 9 |
directors' fiduciary duties, and recording of | 10 |
corporate mortgages. | 11 |
Section 1. That sections 1701.13, 1701.59, 1701.66, 1701.74, | 12 |
1701.76, 1701.84, 1701.85, 1701.86, 1701.87, 1701.88, 1701.89, | 13 |
1701.90, 1701.91, 1701.911, 1702.12, 1702.30, and 1705.61 be | 14 |
amended and sections 1701.881, 1701.882, and 1701.883 of the | 15 |
Revised Code be enacted to read as follows: | 16 |
Sec. 1701.13. (A) A corporation may sue and be sued. | 17 |
(B) A corporation may adopt and alter a corporate seal and | 18 |
use the same or a facsimile of the corporate seal, but failure to | 19 |
affix the corporate seal shall not affect the validity of any | 20 |
instrument. | 21 |
(C) At the request or direction of the United States | 22 |
government or any agency of the United States government, a | 23 |
corporation may transact any lawful business in aid of national | 24 |
defense or in the prosecution of any war in which the nation is | 25 |
engaged. | 26 |
(D) Unless otherwise provided in the articles, a corporation | 27 |
may take property of any description, or any interest in property, | 28 |
by gift, devise, or bequest, and may make donations for the public | 29 |
welfare or for charitable, scientific, or educational purposes. | 30 |
(E)(1) A corporation may indemnify or agree to indemnify any | 31 |
person who was or is a party, or is threatened to be made a party, | 32 |
to any threatened, pending, or completed action, suit, or | 33 |
proceeding, whether civil, criminal, administrative, or | 34 |
investigative, other than an action by or in the right of the | 35 |
corporation, by reason of the fact that | 36 |
director, officer, employee, or agent of the corporation, or is or | 37 |
was serving at the request of the corporation as a director, | 38 |
trustee, officer, employee, member, manager, or agent of another | 39 |
corporation, domestic or foreign, nonprofit or for profit, a | 40 |
limited liability company, or a partnership, joint venture, trust, | 41 |
or other enterprise, against expenses, including attorney's fees, | 42 |
judgments, fines, and amounts paid in settlement actually and | 43 |
reasonably incurred by | 44 |
action, suit, or proceeding, if | 45 |
and in a manner | 46 |
opposed to the best interests of the corporation, and, with | 47 |
respect to any criminal action or proceeding, if | 48 |
no reasonable cause to believe | 49 |
unlawful. The termination of any action, suit, or proceeding by | 50 |
judgment, order, settlement, or conviction, or upon a plea of nolo | 51 |
contendere or its equivalent, shall not, of itself, create a | 52 |
presumption that the person did not act in good faith and in a | 53 |
manner | 54 |
to the best interests of the corporation, and, with respect to any | 55 |
criminal action or proceeding, | 56 |
to believe that | 57 |
(2) A corporation may indemnify or agree to indemnify any | 58 |
person who was or is a party, or is threatened to be made a party, | 59 |
to any threatened, pending, or completed action or suit by or in | 60 |
the right of the corporation to procure a judgment in its favor, | 61 |
by reason of the fact that | 62 |
officer, employee, or agent of the corporation, or is or was | 63 |
serving at the request of the corporation as a director, trustee, | 64 |
officer, employee, member, manager, or agent of another | 65 |
corporation, domestic or foreign, nonprofit or for profit, a | 66 |
limited liability company, or a partnership, joint venture, trust, | 67 |
or other enterprise, against expenses, including attorney's fees, | 68 |
actually and reasonably incurred by | 69 |
with the defense or settlement of such action or suit, if | 70 |
person acted in good faith and in a manner | 71 |
reasonably believed to be in or not opposed to the best interests | 72 |
of the corporation, except that no indemnification shall be made | 73 |
in respect of any of the following: | 74 |
(a) Any claim, issue, or matter as to which such person is | 75 |
adjudged to be liable for negligence or misconduct in the | 76 |
performance of | 77 |
and only to the extent that, the court of common pleas or the | 78 |
court in which such action or suit was brought determines, upon | 79 |
application, that, despite the adjudication of liability, but in | 80 |
view of all the circumstances of the case, such person is fairly | 81 |
and reasonably entitled to indemnity for such expenses as the | 82 |
court of common pleas or such other court shall deem proper; | 83 |
(b) Any action or suit in which the only liability asserted | 84 |
against a director is pursuant to section 1701.95 of the Revised | 85 |
Code. | 86 |
(3) To the extent that a director, trustee, officer, | 87 |
employee, member, manager, or agent has been successful on the | 88 |
merits or otherwise in defense of any action, suit, or proceeding | 89 |
referred to in division (E)(1) or (2) of this section, or in | 90 |
defense of any claim, issue, or matter | 91 |
suit, or proceeding, | 92 |
expenses, including attorney's fees, actually and reasonably | 93 |
incurred by | 94 |
proceeding. | 95 |
(4) Any indemnification under division (E)(1) or (2) of this | 96 |
section, unless ordered by a court, shall be made by the | 97 |
corporation only as authorized in the specific case, upon a | 98 |
determination that indemnification of the director, trustee, | 99 |
officer, employee, member, manager, or agent is proper in the | 100 |
circumstances because | 101 |
standard of conduct set forth in division (E)(1) or (2) of this | 102 |
section. Such determination shall be made as follows: | 103 |
(a) By a majority vote of a quorum consisting of directors of | 104 |
the indemnifying corporation who were not and are not parties to | 105 |
or threatened with the action, suit, or proceeding referred to in | 106 |
division (E)(1) or (2) of this section; | 107 |
(b) If the quorum described in division (E)(4)(a) of this | 108 |
section is not obtainable or if a majority vote of a quorum of | 109 |
disinterested directors so directs, in a written opinion by | 110 |
independent legal counsel other than an attorney, or a firm having | 111 |
associated with it an attorney, who has been retained by or who | 112 |
has performed services for the corporation or any person to be | 113 |
indemnified within the past five years; | 114 |
(c) By the shareholders; | 115 |
(d) By the court of common pleas or the court in which the | 116 |
action, suit, or proceeding referred to in division (E)(1) or (2) | 117 |
of this section was brought. | 118 |
Any determination made by the disinterested directors under | 119 |
division (E)(4)(a) or by independent legal counsel under division | 120 |
(E)(4)(b) of this section shall be promptly communicated to the | 121 |
person who threatened or brought the action or suit by or in the | 122 |
right of the corporation under division (E)(2) of this section, | 123 |
and, within ten days after receipt of | 124 |
the person shall have the right to petition the court of common | 125 |
pleas or the court in which | 126 |
review the reasonableness of | 127 |
(5)(a) Unless at the time of a director's act or omission | 128 |
that is the subject of an action, suit, or proceeding referred to | 129 |
in division (E)(1) or (2) of this section, the articles or the | 130 |
regulations of a corporation state, by specific reference to this | 131 |
division, that the provisions of this division do not apply to the | 132 |
corporation and unless the only liability asserted against a | 133 |
director in an action, suit, or proceeding referred to in division | 134 |
(E)(1) or (2) of this section is pursuant to section 1701.95 of | 135 |
the Revised Code, expenses, including attorney's fees, incurred by | 136 |
a director in defending the action, suit, or proceeding shall be | 137 |
paid by the corporation as they are incurred, in advance of the | 138 |
final disposition of the action, suit, or proceeding, upon receipt | 139 |
of an undertaking by or on behalf of the director in which | 140 |
director agrees to do both of the following: | 141 |
(i) Repay | 142 |
convincing evidence in a court of competent jurisdiction that | 143 |
the director's action or failure to act involved an act or | 144 |
omission undertaken with deliberate intent to cause injury to the | 145 |
corporation or undertaken with reckless disregard for the best | 146 |
interests of the corporation; | 147 |
(ii) Reasonably cooperate with the corporation concerning the | 148 |
action, suit, or proceeding. | 149 |
(b) Expenses, including attorney's fees, incurred by a | 150 |
director, trustee, officer, employee, member, manager, or agent in | 151 |
defending any action, suit, or proceeding referred to in division | 152 |
(E)(1) or (2) of this section, may be paid by the corporation as | 153 |
they are incurred, in advance of the final disposition of the | 154 |
action, suit, or proceeding, as authorized by the directors in the | 155 |
specific case, upon receipt of an undertaking by or on behalf of | 156 |
the director, trustee, officer, employee, member, manager, or | 157 |
agent to repay
| 158 |
that | 159 |
corporation. | 160 |
(6) The indemnification or advancement of expenses authorized | 161 |
by this section shall not be exclusive of, and shall be in | 162 |
addition to, any other rights granted to those seeking | 163 |
indemnification or advancement of expenses under the articles, the | 164 |
regulations, any agreement, a vote of shareholders or | 165 |
disinterested directors, or otherwise, both as to action in their | 166 |
official capacities and as to action in another capacity while | 167 |
holding their offices or positions, and shall continue as to a | 168 |
person who has ceased to be a director, trustee, officer, | 169 |
employee, member, manager, or agent and shall inure to the benefit | 170 |
of the heirs, executors, and administrators of | 171 |
A right to indemnification or to advancement of expenses arising | 172 |
under a provision of the articles or the regulations shall not be | 173 |
eliminated or impaired by an amendment to that provision after the | 174 |
occurrence of the act or omission that becomes the subject of the | 175 |
civil, criminal, administrative, or investigative action, suit, or | 176 |
proceeding for which the indemnification or advancement of | 177 |
expenses is sought, unless the provision in effect at the time of | 178 |
that act or omission explicitly authorizes that elimination or | 179 |
impairment after the act or omission has occurred. | 180 |
(7) A corporation may purchase and maintain insurance or | 181 |
furnish similar protection, including, but not limited to, trust | 182 |
funds, letters of credit, or self-insurance, on behalf of or for | 183 |
any person who is or was a director, officer, employee, or agent | 184 |
of the corporation, or is or was serving at the request of the | 185 |
corporation as a director, trustee, officer, employee, member, | 186 |
manager, or agent of another corporation, domestic or foreign, | 187 |
nonprofit or for profit, a limited liability company, or a | 188 |
partnership, joint venture, trust, or other enterprise, against | 189 |
any liability asserted against | 190 |
the person in any such capacity, or arising out of | 191 |
person's status as such, whether or not the corporation would have | 192 |
the power to indemnify | 193 |
under this section. Insurance may be purchased from or maintained | 194 |
with a person in which the corporation has a financial interest. | 195 |
(8) The authority of a corporation to indemnify persons | 196 |
pursuant to division (E)(1) or (2) of this section does not limit | 197 |
the payment of expenses as they are incurred, indemnification, | 198 |
insurance, or other protection that may be provided pursuant to | 199 |
divisions (E)(5), (6), and (7) of this section. Divisions (E)(1) | 200 |
and (2) of this section do not create any obligation to repay or | 201 |
return payments made by the corporation pursuant to division | 202 |
(E)(5), (6), or (7). | 203 |
(9) As used in division (E) of this section, "corporation" | 204 |
includes all constituent entities in a consolidation or merger and | 205 |
the new or surviving corporation, so that any person who is or was | 206 |
a director, officer, employee, trustee, member, manager, or agent | 207 |
of such a constituent entity, or is or was serving at the request | 208 |
of such constituent entity as a director, trustee, officer, | 209 |
employee, member, manager, or agent of another corporation, | 210 |
domestic or foreign, nonprofit or for profit, a limited liability | 211 |
company, or a partnership, joint venture, trust, or other | 212 |
enterprise, shall stand in the same position under this section | 213 |
with respect to the new or surviving corporation as | 214 |
would if | 215 |
in the same capacity. | 216 |
(F) In carrying out the purposes stated in its articles and | 217 |
subject to limitations prescribed by law or in its articles, a | 218 |
corporation may: | 219 |
(1) Purchase or otherwise acquire, lease as lessee, invest | 220 |
in, hold, use, lease as lessor, encumber, sell, exchange, | 221 |
transfer, and dispose of property of any description or any | 222 |
interest in such property; | 223 |
(2) Make contracts; | 224 |
(3) Form or acquire the control of other corporations, | 225 |
domestic or foreign, whether nonprofit or for profit; | 226 |
(4) Be a partner, member, associate, or participant in other | 227 |
enterprises or ventures, whether profit or nonprofit; | 228 |
(5) Conduct its affairs in this state and elsewhere; | 229 |
(6) Borrow money, and issue, sell, and pledge its notes, | 230 |
bonds, and other evidences of indebtedness, and secure any of its | 231 |
obligations by mortgage, pledge, or deed of trust of all or any of | 232 |
its property, and guarantee or secure obligations of any person; | 233 |
(7) Resist a change or potential change in control of the | 234 |
corporation if the directors by a majority vote of a quorum | 235 |
determine that the change or potential change is opposed to or not | 236 |
in the best interests of the corporation: | 237 |
(a) Upon consideration of the interests of the corporation's | 238 |
shareholders and any of the matters set forth in division | 239 |
of section 1701.59 of the Revised Code; or | 240 |
(b) Because the amount or nature of the indebtedness and | 241 |
other obligations to which the corporation or any successor or the | 242 |
property of either may become subject in connection with the | 243 |
change or potential change in control provides reasonable grounds | 244 |
to believe that, within a reasonable period of time, any of the | 245 |
following would apply: | 246 |
(i) The assets of the corporation or any successor would be | 247 |
or become less than its liabilities plus its stated capital, if | 248 |
any; | 249 |
(ii) The corporation or any successor would be or become | 250 |
insolvent; | 251 |
(iii) Any voluntary or involuntary proceeding under the | 252 |
federal bankruptcy laws concerning the corporation or any | 253 |
successor would be commenced by any person. | 254 |
(8) Do all things permitted by law and exercise all authority | 255 |
within the purposes stated in its articles or incidental to its | 256 |
articles. | 257 |
(G) Irrespective of the purposes stated in its articles, but | 258 |
subject to limitations stated in its articles, a corporation, in | 259 |
addition to the authority conferred by division (F) of this | 260 |
section, may invest its funds not currently needed in its business | 261 |
in any shares or other securities, to such extent that as a result | 262 |
of the investment the corporation shall not acquire control of | 263 |
another corporation, business, or undertaking the activities and | 264 |
operations of which are not incidental to the purposes stated in | 265 |
its articles. | 266 |
(H) No lack of, or limitation upon, the authority of a | 267 |
corporation shall be asserted in any action except (1) by the | 268 |
state in an action by it against the corporation, (2) by or on | 269 |
behalf of the corporation against a director, an officer, or any | 270 |
shareholder as such, (3) by a shareholder as such or by or on | 271 |
behalf of the holders of shares of any class against the | 272 |
corporation, a director, an officer, or any shareholder as such, | 273 |
or (4) in an action involving an alleged overissue of shares. This | 274 |
division shall apply to any action brought in this state upon any | 275 |
contract made in this state by a foreign corporation. | 276 |
Sec. 1701.59. (A) Except where the law, the articles, or the | 277 |
regulations require action to be authorized or taken by | 278 |
shareholders, all of the authority of a corporation shall be | 279 |
exercised by or under the direction of its directors. For their | 280 |
own government, the directors may adopt bylaws that are not | 281 |
inconsistent with the articles or the regulations. The selection | 282 |
of a time frame for the achievement of corporate goals shall be | 283 |
the responsibility of the directors. | 284 |
(B) A director shall perform the director's duties as a | 285 |
director, including the duties as a member of any committee of the | 286 |
directors upon which the director may serve, in good faith, in a | 287 |
manner the director reasonably believes to be in or not opposed to | 288 |
the best interests of the corporation, and with the care that an | 289 |
ordinarily prudent person in a like position would use under | 290 |
similar circumstances.
| 291 |
directors is acting as a director. | 292 |
(C) In performing a director's duties, a director is entitled | 293 |
to rely on information, opinions, reports, or statements, | 294 |
including financial statements and other financial data, that are | 295 |
prepared or presented by any of the following: | 296 |
(1) One or more directors, officers, or employees of the | 297 |
corporation who the director reasonably believes are reliable and | 298 |
competent in the matters prepared or presented; | 299 |
(2) Counsel, public accountants, or other persons as to | 300 |
matters that the director reasonably believes are within the | 301 |
person's professional or expert competence; | 302 |
(3) A committee of the directors upon which the director does | 303 |
not serve, duly established in accordance with a provision of the | 304 |
articles or the regulations, as to matters within its designated | 305 |
authority, which committee the director reasonably believes to | 306 |
merit confidence. | 307 |
| 308 |
following apply: | 309 |
(1) A director shall not be found to have violated the | 310 |
director's duties under division (B) of this section unless it is | 311 |
proved by clear and convincing evidence that the director has not | 312 |
acted in good faith, in a manner the director reasonably believes | 313 |
to be in or not opposed to the best interests of the corporation, | 314 |
or with the care that an ordinarily prudent person in a like | 315 |
position would use under similar circumstances, in any action | 316 |
brought against a director, including actions involving or | 317 |
affecting any of the following: | 318 |
(a) A change or potential change in control of the | 319 |
corporation, including a determination to resist a change or | 320 |
potential change in control made pursuant to division (F)(7) of | 321 |
section 1701.13 of the Revised Code; | 322 |
(b) A termination or potential termination of the director's | 323 |
service to the corporation as a director; | 324 |
(c) The director's service in any other position or | 325 |
relationship with the corporation. | 326 |
(2) A director shall not be considered to be acting in good | 327 |
faith if the director has knowledge concerning the matter in | 328 |
question that would cause reliance on information, opinions, | 329 |
reports, or statements that are prepared or presented by the | 330 |
persons described in divisions | 331 |
be unwarranted. | 332 |
(3) Nothing contained in this division limits relief | 333 |
available under section 1701.60 of the Revised Code. | 334 |
| 335 |
that the director takes or fails to take as a director only if it | 336 |
is proved by clear and convincing evidence in a court of competent | 337 |
jurisdiction that the director's action or failure to act involved | 338 |
an act or omission undertaken with deliberate intent to cause | 339 |
injury to the corporation or undertaken with reckless disregard | 340 |
for the best interests of the corporation. Nothing contained in | 341 |
this division affects the liability of directors under section | 342 |
1701.95 of the Revised Code or limits relief available under | 343 |
section 1701.60 of the Revised Code. This division does not apply | 344 |
if, and only to the extent that, at the time of a director's act | 345 |
or omission that is the subject of complaint, the articles or the | 346 |
regulations of the corporation state by specific reference to this | 347 |
division that the provisions of this division do not apply to the | 348 |
corporation. | 349 |
| 350 |
determining what the director reasonably believes to be in the | 351 |
best interests of the corporation, shall consider the interests of | 352 |
the corporation's shareholders and, in the director's discretion, | 353 |
may consider any of the following: | 354 |
(1) The interests of the corporation's employees, suppliers, | 355 |
creditors, and customers; | 356 |
(2) The economy of the state and nation; | 357 |
(3) Community and societal considerations; | 358 |
(4) The long-term as well as short-term interests of the | 359 |
corporation and its shareholders, including the possibility that | 360 |
these interests may be best served by the continued independence | 361 |
of the corporation. | 362 |
| 363 |
section affects the duties of either of the following: | 364 |
(1) A director who acts in any capacity other than the | 365 |
director's capacity as a director; | 366 |
(2) A director of a corporation that does not have issued and | 367 |
outstanding shares that are listed on a national securities | 368 |
exchange or are regularly quoted in an over-the-counter market by | 369 |
one or more members of a national or affiliated securities | 370 |
association, who votes for or assents to any action taken by the | 371 |
directors of the corporation that, in connection with a change in | 372 |
control of the corporation, directly results in the holder or | 373 |
holders of a majority of the outstanding shares of the corporation | 374 |
receiving a greater consideration for their shares than other | 375 |
shareholders. | 376 |
Sec. 1701.66. (A) A mortgage of property of any description, | 377 |
or any interest | 378 |
379 | |
sections 4907.02, 4905.02, and 4905.03 of the Revised Code; | 380 |
by a corporation, domestic or foreign, organized for the purpose | 381 |
of constructing, acquiring, owning, or operating a railroad or | 382 |
public utility, as so defined, or any part | 383 |
or public utility, or, as a common carrier, a trolley bus system, | 384 |
in whole or in part in this state;
| 385 |
corporation pursuant to Section 12 of Article XVIII, Ohio | 386 |
Constitution; | 387 |
corporation, pursuant to Chapter 165. of the Revised Code, or a | 388 |
port authority pursuant to section 4582.06 or 4582.31 of the | 389 |
Revised Code; or (5) by an electric cooperative as defined by | 390 |
section 4928.01 of the Revised Code, shall be recorded in the | 391 |
office of the county recorder of each county in this state in | 392 |
which any of
| 393 |
However, a mortgage by such mortgagor | 394 |
stock or movable equipment such as cars, locomotives, or trolley | 395 |
buses, motor buses, or other vehicles, or machines for aerial | 396 |
transportation, may be filed in the office of the secretary of | 397 |
state, and when so filed shall have the same effect, as to the | 398 |
lien created | 399 |
movable equipment, or machines, as though filed in the office of | 400 |
the recorder of each | 401 |
movable equipment, or machines are situated or employed. In lieu | 402 |
of filing an original of | 403 |
division, a true copy
| 404 |
by the mortgagor, the mortgagee, or an agent of either that it is | 405 |
a true copy, may be filed. | 406 |
(B) Any | 407 |
section shall be a lien on the property
| 408 |
mortgage from the respective times of the filing of | 409 |
mortgage for record with the recorders of | 410 |
counties; but any such mortgage covering | 411 |
movable equipment, or machines described in division (A) of this | 412 |
section shall be a lien | 413 |
those machines from the time of the filing of
| 414 |
or a true copy | 415 |
state. | 416 |
(C) If any mortgage by its terms creates a lien upon any | 417 |
property | 418 |
it shall be a lien upon all the interest of the mortgagor in | 419 |
that after-acquired property from the date of its acquisition, if | 420 |
421 | |
section. | 422 |
(D) The secretary of state shall charge and collect, for | 423 |
every | 424 |
the secretary of state's office under this section, a fee of ten | 425 |
dollars and, for each page in excess of twenty-five pages an | 426 |
additional fee of one dollar. The secretary of state shall endorse | 427 |
on the mortgage or true copy the time of its filing and shall keep | 428 |
a record of the filing in a book to be kept for | 429 |
giving the names of all parties to the mortgage, alphabetically | 430 |
arranged, the date of the mortgage, and the time of its filing. | 431 |
The mortgage or true copy and the record of its filing shall be | 432 |
open to public inspection. When the mortgage is canceled, the date | 433 |
of cancellation shall be entered on the margin of the record | 434 |
435 |
(E) Mortgages of the character described in this section need | 436 |
not be otherwise filed or refiled as security interests under | 437 |
Chapter 1309. of the Revised Code. | 438 |
(F) Nothing contained in this section shall make inapplicable | 439 |
the provisions of Chapters 4505. to 4519. of the Revised Code, | 440 |
relating to motor vehicles. | 441 |
Sec. 1701.74. (A) If an amendment does any of the following, | 442 |
then shareholders are entitled to relief to the extent provided in | 443 |
division (B) of this section: | 444 |
(1) Changes issued shares of a particular class that have | 445 |
preference in dividends or distributions or on liquidation over | 446 |
shares of any other class into shares of any other class, or | 447 |
changes any of the express terms of issued shares of such | 448 |
particular class, and the holders of the shares of such particular | 449 |
class are substantially prejudiced thereby and the articles do not | 450 |
expressly or by implication provide for or permit such amendment; | 451 |
(2) Changes the express terms of issued shares of a | 452 |
particular class that have preference in dividends or | 453 |
distributions or on liquidation over shares of any other class, in | 454 |
such manner as to discharge without payment of, or to adjust or | 455 |
eliminate rights to, accrued undeclared cumulative dividends or | 456 |
distributions on the shares of any such class; | 457 |
(3) Changes substantially the purposes of the corporation or | 458 |
provides that thereafter an amendment to change substantially the | 459 |
purposes of the corporation may be adopted; | 460 |
(4) Changes the corporation into a nonprofit corporation. | 461 |
(B) In the cases provided for in divisions (A)(1) and (2) of | 462 |
this section, dissenting holders of shares of such particular | 463 |
class, and, in the cases provided for in divisions (A)(3) and (4) | 464 |
of this section, dissenting holders of shares of any class, shall | 465 |
be entitled to relief under section 1701.85 of the Revised Code, | 466 |
subject to the following exceptions: | 467 |
(1) If the articles of the corporation in effect at the time | 468 |
of the adoption of an amendment that changes substantially the | 469 |
purposes of the corporation expressly provide that such an | 470 |
amendment may be adopted, then dissenting shareholders shall not | 471 |
be entitled to relief under section 1701.85 of the Revised Code | 472 |
with respect to the adoption of such amendment | 473 |
(2) Division (A)(3) of this section does not apply to any | 474 |
corporation incorporated after December 31, 1970. | 475 |
(3) No amendment that eliminates or creates cumulative voting | 476 |
rights as permitted by division (B)(10) of section 1701.69 of the | 477 |
Revised Code, entitles any dissenting shareholder to relief under | 478 |
section 1701.85 of the Revised Code with respect to the adoption | 479 |
of such amendment. | 480 |
(4) No relief as a dissenting shareholder shall be available | 481 |
if the shares of the corporation for which the dissenting | 482 |
shareholder would otherwise be entitled to relief are listed on a | 483 |
national securities exchange as of the day immediately preceding | 484 |
the date of the vote and no proceedings have been commenced to | 485 |
delist the shares from the national securities exchange as of the | 486 |
time of the vote or, if division (A)(1) of this section applies | 487 |
and the shares to be received are listed on a national securities | 488 |
exchange and no proceedings are pending to delist the shares, as | 489 |
of the effective time of the amendment. | 490 |
Sec. 1701.76. (A)(1) Provided the provisions of Chapter | 491 |
1704. of the Revised Code do not prevent the transaction from | 492 |
being effected, a lease, sale, exchange, transfer, or other | 493 |
disposition of all, or substantially all, of the assets, with or | 494 |
without the good will, of a corporation, if not made in the usual | 495 |
and regular course of its business, may be made upon the terms and | 496 |
conditions and for the consideration, that may consist, in whole | 497 |
or in part, of money or other property of any description, | 498 |
including shares or other securities or promissory obligations of | 499 |
any other corporation, domestic or foreign, that may be authorized | 500 |
as follows: | 501 |
(a) By the directors, either before or after authorization by | 502 |
the shareholders as required in this section; and | 503 |
(b) At a meeting of the shareholders held for that purpose, | 504 |
by the affirmative vote of the holders of shares entitling them to | 505 |
exercise two-thirds of the voting power of the corporation on the | 506 |
proposal, or, if the articles so provide or permit, by the | 507 |
affirmative vote of a greater or lesser proportion, but not less | 508 |
than a majority, of the voting power, and by the affirmative vote | 509 |
of the holders of shares of any particular class that is required | 510 |
by the articles. | 511 |
(2) At the shareholder meeting described in division | 512 |
(A)(1)(b) of this section or at any subsequent shareholder | 513 |
meeting, shareholders, by the same vote that is required to | 514 |
authorize the lease, sale, exchange, transfer, or other | 515 |
disposition of all, or substantially all, of the assets, with or | 516 |
without the good will, of the corporation, may grant authority to | 517 |
the directors to establish or amend any of the terms and | 518 |
conditions of the transaction, except that the shareholders shall | 519 |
not authorize the directors to do any of the following: | 520 |
(a) Alter or change the amount or kind of shares, securities, | 521 |
money, property, or rights to be received in exchange for the | 522 |
assets; | 523 |
(b) Alter or change to any material extent the amount or kind | 524 |
of liabilities to be assumed in exchange for the assets; | 525 |
(c) Alter or change any other terms and conditions of the | 526 |
transaction if any of the alterations or changes, alone or in the | 527 |
aggregate, would materially adversely affect the shareholders or | 528 |
the corporation. | 529 |
(3) Notice of the meeting of the shareholders described in | 530 |
division (A)(1)(b) of this section shall be given to all | 531 |
shareholders whether or not entitled to vote at the meeting and | 532 |
shall be accompanied by a copy or summary of the terms of the | 533 |
transaction. | 534 |
(B) The corporation by its directors may abandon the | 535 |
transaction under this section, subject to the contract rights of | 536 |
other persons, if the power of abandonment is conferred upon the | 537 |
directors either by the terms of the transaction or by the same | 538 |
vote of shareholders and at the same meeting of shareholders as | 539 |
that referred to in division (A)(1)(b) of this section or at any | 540 |
subsequent meeting. | 541 |
(C) Dissenting holders of shares of any class, whether or not | 542 |
entitled to vote, shall be entitled to relief under section | 543 |
1701.85 of the Revised Code, unless both of the following apply: | 544 |
(1) The shares of the corporation for which the dissenting | 545 |
shareholder would otherwise be entitled to relief are listed on a | 546 |
national securities exchange as of the day immediately preceding | 547 |
the date of the vote described in division (A)(1)(b) of this | 548 |
section. | 549 |
(2) The consideration to be received by the shareholders | 550 |
consists of shares or shares and cash in lieu of fractional shares | 551 |
that, immediately following the time of the vote described in | 552 |
division (A)(1)(b) of this section, are listed on a national | 553 |
securities exchange, and no proceedings are pending to delist the | 554 |
shares from the national securities exchange as of the time of the | 555 |
vote. | 556 |
(D) An action to set aside a conveyance by a corporation, on | 557 |
the ground that any section of the Revised Code applicable to the | 558 |
lease, sale, exchange, transfer, or other disposition of all, or | 559 |
substantially all, of the assets of that corporation has not been | 560 |
complied with, shall be brought within ninety days after that | 561 |
transaction, or the action shall be forever barred. | 562 |
(E) If a resolution of dissolution is adopted pursuant to | 563 |
section 1701.86 of the Revised Code, the directors may dispose of | 564 |
all, or substantially all, of the corporation's assets without the | 565 |
necessity of a shareholders' authorization under this section. | 566 |
(F) The terms and conditions of any transaction under this | 567 |
section shall be subject to the limitations specified in section | 568 |
2307.97 of the Revised Code. | 569 |
(G) This section does not apply to the distribution, pursuant | 570 |
to section 1701.33 of the Revised Code, to the shareholders of an | 571 |
issuing public corporation of shares owned by the issuing public | 572 |
corporation in one or more of its domestic or foreign subsidiary | 573 |
corporations, unless either of the following applies: | 574 |
(1) The former subsidiary is a party to one or more | 575 |
agreements pursuant to which it is obligated to engage in an | 576 |
additional transaction that, if the transaction were authorized | 577 |
after the time at which the distribution becomes effective, would | 578 |
require the approval of its shareholders. | 579 |
(2) Immediately prior to the time at which the distribution | 580 |
becomes effective, the issuing public corporation has more than | 581 |
one class of shares outstanding. | 582 |
(H) For purposes of this section only, the assets of a | 583 |
corporation include the assets of any other entity that is wholly | 584 |
owned, directly or indirectly, by the corporation. Unless | 585 |
otherwise provided in the articles, this section does not apply to | 586 |
any lease, sale, exchange, transfer, or other disposition of all, | 587 |
or substantially all, of the assets of a corporation to any entity | 588 |
that is wholly owned, directly or indirectly, by the corporation. | 589 |
Sec. 1701.84. | 590 |
this section, the following are entitled to relief as dissenting | 591 |
shareholders under section 1701.85 of the Revised Code: | 592 |
| 593 |
merged or consolidated into a surviving or new entity, domestic or | 594 |
foreign, pursuant to section 1701.78, 1701.781, 1701.79, 1701.791, | 595 |
or 1701.801 of the Revised Code; | 596 |
| 597 |
shareholders of the surviving corporation who under section | 598 |
1701.78 or 1701.781 of the Revised Code are entitled to vote on | 599 |
the adoption of an agreement of merger, but only as to the shares | 600 |
so entitling them to vote; | 601 |
| 602 |
domestic subsidiary corporation that is being merged into the | 603 |
domestic or foreign parent corporation pursuant to section 1701.80 | 604 |
of the Revised Code; | 605 |
| 606 |
acquisition, shareholders of the acquiring corporation who under | 607 |
section 1701.83 of the Revised Code are entitled to vote on such | 608 |
transaction, but only as to the shares so entitling them to vote; | 609 |
| 610 |
which one or more domestic or foreign corporations are being | 611 |
merged pursuant to section 1701.801 of the Revised Code; | 612 |
| 613 |
converted pursuant to section 1701.792 of the Revised Code. | 614 |
(B) All of the following shareholders shall not be entitled | 615 |
to relief as dissenting shareholders under section 1701.85 of the | 616 |
Revised Code: | 617 |
(1) Shareholders described in division (A)(1) or (6) of this | 618 |
section, if both of the following apply: | 619 |
(a) The shares of the corporation for which the dissenting | 620 |
shareholder would otherwise be entitled to relief under division | 621 |
(A)(1) or (6) of this section are listed on a national securities | 622 |
exchange as of the day immediately preceding the date on which the | 623 |
vote on the proposal is taken at the meeting of the shareholders. | 624 |
(b) The consideration to be received by the shareholders | 625 |
consists of shares or shares and cash in lieu of fractional shares | 626 |
that, immediately following the effective time of a merger, | 627 |
consolidation, or conversion, as applicable, are listed on a | 628 |
national securities exchange and for which no proceedings are | 629 |
pending to delist the shares from the national securities exchange | 630 |
as of the effective time of the merger, consolidation, or | 631 |
conversion. | 632 |
(2) Shareholders described in division (A)(2) of this | 633 |
section, if the shares so entitling them to vote are listed on a | 634 |
national securities exchange both as of the day immediately | 635 |
preceding the date on which the vote on the proposal is taken at | 636 |
the meeting of the shareholders and immediately following the | 637 |
effective time of the merger and there are no proceedings pending | 638 |
to delist the shares from the national securities exchange as of | 639 |
the effective time of the merger; | 640 |
(3) The shareholders described in division (A)(4) of this | 641 |
section, if the shares so entitling them to vote are listed on a | 642 |
national securities exchange both as of the day immediately | 643 |
preceding the date on which the vote on the proposal is taken at | 644 |
the meeting of the shareholders and immediately following the | 645 |
effective time of the combination or majority share acquisition, | 646 |
and there are no proceedings pending to delist the shares from the | 647 |
national securities exchange as of the effective time of the | 648 |
combination or majority share acquisition. | 649 |
Sec. 1701.85. (A)(1) A shareholder of a domestic corporation | 650 |
is entitled to relief as a dissenting shareholder in respect of | 651 |
the proposals described in sections 1701.74, 1701.76, and 1701.84 | 652 |
of the Revised Code, only in compliance with this section. | 653 |
(2) If the proposal must be submitted to the shareholders of | 654 |
the corporation involved, the dissenting shareholder shall be a | 655 |
record holder of the shares of the corporation as to which the | 656 |
dissenting shareholder seeks relief as of the date fixed for the | 657 |
determination of shareholders entitled to notice of a meeting of | 658 |
the shareholders at which the proposal is to be submitted, and | 659 |
such shares shall not have been voted in favor of the proposal. | 660 |
661 |
(3) Not later than twenty days before the date of the meeting | 662 |
at which the proposal will be submitted to the shareholders, the | 663 |
corporation may notify the corporation's shareholders that relief | 664 |
under this section is available. The notice shall include or be | 665 |
accompanied by all of the following: | 666 |
(a) A copy of this section; | 667 |
(b) A statement that the proposal can give rise to rights | 668 |
under this section if the proposal is approved by the required | 669 |
vote of the shareholders; | 670 |
(c) A statement that the shareholder will be eligible as a | 671 |
dissenting shareholder under this section only if the shareholder | 672 |
delivers to the corporation a written demand with the information | 673 |
provided for in division (A)(4) of this section before the vote on | 674 |
the proposal will be taken at the meeting of the shareholders and | 675 |
the shareholder does not vote in favor of the proposal. | 676 |
(4) If the corporation delivers notice to its shareholders as | 677 |
provided in division (A)(3) of this section, a shareholder | 678 |
electing to be eligible as a dissenting shareholder under this | 679 |
section shall deliver to the corporation before the vote on the | 680 |
proposal is taken a written demand for payment of the fair cash | 681 |
value of the shares as to which the shareholder seeks relief. The | 682 |
demand for payment shall include the shareholder's address, the | 683 |
number and class of such shares, and the amount claimed by the | 684 |
shareholder as the fair cash value of the shares. | 685 |
(5) If the corporation does not notify the corporation's | 686 |
shareholders pursuant to division (A)(3) of this section, not | 687 |
later than ten days after the date on which the vote on the | 688 |
proposal was taken at the meeting of the shareholders, the | 689 |
dissenting shareholder shall deliver to the corporation a written | 690 |
demand for payment to the dissenting shareholder of the fair cash | 691 |
value of the shares as to which the dissenting shareholder seeks | 692 |
relief, which demand shall state the dissenting shareholder's | 693 |
address, the number and class of such shares, and the amount | 694 |
claimed by the dissenting shareholder as the fair cash value of | 695 |
the shares. | 696 |
| 697 |
dissenting shareholder, executes the demand, then at any time | 698 |
after receiving the demand, the corporation may make a written | 699 |
request that the dissenting shareholder provide evidence of the | 700 |
signatory's authority. The shareholder shall provide the evidence | 701 |
within a reasonable time but not sooner than twenty days after the | 702 |
dissenting shareholder has received the corporation's written | 703 |
request for evidence. | 704 |
(7) The dissenting shareholder entitled to relief under | 705 |
division | 706 |
case of a merger pursuant to section 1701.80 of the Revised Code | 707 |
and a dissenting shareholder entitled to relief under division | 708 |
709 | |
merger pursuant to section 1701.801 of the Revised Code shall be a | 710 |
record holder of the shares of the corporation as to which the | 711 |
dissenting shareholder seeks relief as of the date on which the | 712 |
agreement of merger was adopted by the directors of that | 713 |
corporation. Within twenty days after the dissenting shareholder | 714 |
has been sent the notice provided in section 1701.80 or 1701.801 | 715 |
of the Revised Code, the dissenting shareholder shall deliver to | 716 |
the corporation a written demand for payment with the same | 717 |
information as that provided for in division (A) | 718 |
section. | 719 |
| 720 |
served on the constituent corporation involved constitutes service | 721 |
on the surviving or the new entity, whether the demand is served | 722 |
before, on, or after the effective date of the merger or | 723 |
consolidation. In the case of a conversion, a demand served on the | 724 |
converting corporation constitutes service on the converted | 725 |
entity, whether the demand is served before, on, or after the | 726 |
effective date of the conversion. | 727 |
| 728 |
shareholder, at the address specified in the dissenting | 729 |
shareholder's demand, a request for the certificates representing | 730 |
the shares as to which the dissenting shareholder seeks relief, | 731 |
the dissenting shareholder, within fifteen days from the date of | 732 |
the sending of such request, shall deliver to the corporation the | 733 |
certificates requested so that the corporation may endorse on them | 734 |
a legend to the effect that demand for the fair cash value of such | 735 |
shares has been made. The corporation promptly shall return the | 736 |
endorsed certificates to the dissenting shareholder. A dissenting | 737 |
shareholder's failure to deliver the certificates terminates the | 738 |
dissenting shareholder's rights as a dissenting shareholder, at | 739 |
the option of the corporation, exercised by written notice sent to | 740 |
the dissenting shareholder within twenty days after the lapse of | 741 |
the fifteen-day period, unless a court for good cause shown | 742 |
otherwise directs. If shares represented by a certificate on which | 743 |
such a legend has been endorsed are transferred, each new | 744 |
certificate issued for them shall bear a similar legend, together | 745 |
with the name of the original dissenting holder of the shares. | 746 |
Upon receiving a demand for payment from a dissenting shareholder | 747 |
who is the record holder of uncertificated securities, the | 748 |
corporation shall make an appropriate notation of the demand for | 749 |
payment in its shareholder records. If uncertificated shares for | 750 |
which payment has been demanded are to be transferred, any new | 751 |
certificate issued for the shares shall bear the legend required | 752 |
for certificated securities as provided in this paragraph. A | 753 |
transferee of the shares so endorsed, or of uncertificated | 754 |
securities where such notation has been made, acquires only the | 755 |
rights in the corporation as the original dissenting holder of | 756 |
such shares had immediately after the service of a demand for | 757 |
payment of the fair cash value of the shares. A request under this | 758 |
paragraph by the corporation is not an admission by the | 759 |
corporation that the shareholder is entitled to relief under this | 760 |
section. | 761 |
(B) Unless the corporation and the dissenting shareholder | 762 |
have come to an agreement on the fair cash value per share of the | 763 |
shares as to which the dissenting shareholder seeks relief, the | 764 |
dissenting shareholder or the corporation, which in case of a | 765 |
merger or consolidation may be the surviving or new entity, or in | 766 |
the case of a conversion may be the converted entity, within three | 767 |
months after the service of the demand by the dissenting | 768 |
shareholder, may file a complaint in the court of common pleas of | 769 |
the county in which the principal office of the corporation that | 770 |
issued the shares is located or was located when the proposal was | 771 |
adopted by the shareholders of the corporation, or, if the | 772 |
proposal was not required to be submitted to the shareholders, was | 773 |
approved by the directors. Other dissenting shareholders, within | 774 |
that three-month period, may join as plaintiffs or may be joined | 775 |
as defendants in any such proceeding, and any two or more such | 776 |
proceedings may be consolidated. The complaint shall contain a | 777 |
brief statement of the facts, including the vote and the facts | 778 |
entitling the dissenting shareholder to the relief demanded. No | 779 |
answer to a complaint is required. Upon the filing of a complaint, | 780 |
the court, on motion of the petitioner, shall enter an order | 781 |
fixing a date for a hearing on the complaint and requiring that a | 782 |
copy of the complaint and a notice of the filing and of the date | 783 |
for hearing be given to the respondent or defendant in the manner | 784 |
in which summons is required to be served or substituted service | 785 |
is required to be made in other cases. On the day fixed for the | 786 |
hearing on the complaint or any adjournment of it, the court shall | 787 |
determine from the complaint and from evidence submitted by either | 788 |
party whether the dissenting shareholder is entitled to be paid | 789 |
the fair cash value of any shares and, if so, the number and class | 790 |
of such shares. If the court finds that the dissenting shareholder | 791 |
is so entitled, the court may appoint one or more persons as | 792 |
appraisers to receive evidence and to recommend a decision on the | 793 |
amount of the fair cash value. The appraisers have power and | 794 |
authority specified in the order of their appointment. The court | 795 |
thereupon shall make a finding as to the fair cash value of a | 796 |
share and shall render judgment against the corporation for the | 797 |
payment of it, with interest at a rate and from a date as the | 798 |
court considers equitable. The costs of the proceeding, including | 799 |
reasonable compensation to the appraisers to be fixed by the | 800 |
court, shall be assessed or apportioned as the court considers | 801 |
equitable. The proceeding is a special proceeding and final orders | 802 |
in it may be vacated, modified, or reversed on appeal pursuant to | 803 |
the Rules of Appellate Procedure and, to the extent not in | 804 |
conflict with those rules, Chapter 2505. of the Revised Code. If, | 805 |
during the pendency of any proceeding instituted under this | 806 |
section, a suit or proceeding is or has been instituted to enjoin | 807 |
or otherwise to prevent the carrying out of the action as to which | 808 |
the shareholder has dissented, the proceeding instituted under | 809 |
this section shall be stayed until the final determination of the | 810 |
other suit or proceeding. Unless any provision in division (D) of | 811 |
this section is applicable, the fair cash value of the shares that | 812 |
is agreed upon by the parties or fixed under this section shall be | 813 |
paid within thirty days after the date of final determination of | 814 |
such value under this division, the effective date of the | 815 |
amendment to the articles, or the consummation of the other action | 816 |
involved, whichever occurs last. Upon the occurrence of the last | 817 |
such event, payment shall be made immediately to a holder of | 818 |
uncertificated securities entitled to payment. In the case of | 819 |
holders of shares represented by certificates, payment shall be | 820 |
made only upon and simultaneously with the surrender to the | 821 |
corporation of the certificates representing the shares for which | 822 |
the payment is made. | 823 |
(C)(1) If the proposal was required to be submitted to the | 824 |
shareholders of the corporation, fair cash value as to those | 825 |
shareholders shall be determined as of the day prior to the day on | 826 |
which the vote by the shareholders was taken and, in the case of a | 827 |
merger pursuant to section 1701.80 or 1701.801 of the Revised | 828 |
Code, fair cash value as to shareholders of a constituent | 829 |
subsidiary corporation shall be determined as of the day before | 830 |
the adoption of the agreement of merger by the directors of the | 831 |
particular subsidiary corporation. The fair cash value of a share | 832 |
for the purposes of this section is the amount that a willing | 833 |
seller who is under no compulsion to sell would be willing to | 834 |
accept and that a willing buyer who is under no compulsion to | 835 |
purchase would be willing to pay, but in no event shall the fair | 836 |
cash value of a share exceed the amount specified in the demand of | 837 |
the particular shareholder. In computing fair cash value, | 838 |
of the following shall be excluded: | 839 |
(a) Any appreciation or depreciation in market value | 840 |
resulting from the proposal submitted to the directors or to the | 841 |
shareholders | 842 |
(b) Any premium associated with control of the corporation, | 843 |
or any discount for lack of marketability or minority status. | 844 |
(2) For the purposes of this section, the fair cash value of | 845 |
a share that was listed on a national securities exchange at any | 846 |
of the following times shall be the closing sale price on the | 847 |
national securities exchange as of the applicable date provided in | 848 |
division (C)(1) of this section: | 849 |
(a) Immediately before the effective time of a merger or | 850 |
consolidation; | 851 |
(b) Immediately before the filing of an amendment to the | 852 |
articles of incorporation as described in division (A) of section | 853 |
1701.74 of the Revised Code; | 854 |
(c) Immediately before the time of the vote described in | 855 |
division (A)(1)(b) of section 1701.76 of the Revised Code. | 856 |
(D)(1) The right and obligation of a dissenting shareholder | 857 |
to receive fair cash value and to sell such shares as to which the | 858 |
dissenting shareholder seeks relief, and the right and obligation | 859 |
of the corporation to purchase such shares and to pay the fair | 860 |
cash value of them terminates if any of the following applies: | 861 |
(a) The dissenting shareholder has not complied with this | 862 |
section, unless the corporation by its directors waives such | 863 |
failure; | 864 |
(b) The corporation abandons the action involved or is | 865 |
finally enjoined or prevented from carrying it out, or the | 866 |
shareholders rescind their adoption of the action involved; | 867 |
(c) The dissenting shareholder withdraws the dissenting | 868 |
shareholder's demand, with the consent of the corporation by its | 869 |
directors; | 870 |
(d) The corporation and the dissenting shareholder have not | 871 |
come to an agreement as to the fair cash value per share, and | 872 |
neither the shareholder nor the corporation has filed or joined in | 873 |
a complaint under division (B) of this section within the period | 874 |
provided in that division. | 875 |
(2) For purposes of division (D)(1) of this section, if the | 876 |
merger, consolidation, or conversion has become effective and the | 877 |
surviving, new, or converted entity is not a corporation, action | 878 |
required to be taken by the directors of the corporation shall be | 879 |
taken by the partners of a surviving, new, or converted | 880 |
partnership or the comparable representatives of any other | 881 |
surviving, new, or converted entity. | 882 |
(E) From the time of the dissenting shareholder's giving of | 883 |
the demand until either the termination of the rights and | 884 |
obligations arising from it or the purchase of the shares by the | 885 |
corporation, all other rights accruing from such shares, including | 886 |
voting and dividend or distribution rights, are suspended. If | 887 |
during the suspension, any dividend or distribution is paid in | 888 |
money upon shares of such class or any dividend, distribution, or | 889 |
interest is paid in money upon any securities issued in | 890 |
extinguishment of or in substitution for such shares, an amount | 891 |
equal to the dividend, distribution, or interest which, except for | 892 |
the suspension, would have been payable upon such shares or | 893 |
securities, shall be paid to the holder of record as a credit upon | 894 |
the fair cash value of the shares. If the right to receive fair | 895 |
cash value is terminated other than by the purchase of the shares | 896 |
by the corporation, all rights of the holder shall be restored and | 897 |
all distributions which, except for the suspension, would have | 898 |
been made shall be made to the holder of record of the shares at | 899 |
the time of termination. | 900 |
Sec. 1701.86. (A) A corporation may be dissolved voluntarily | 901 |
in the manner provided in this section, provided the provisions of | 902 |
Chapter 1704. of the Revised Code do not prevent the dissolution | 903 |
from being effected. | 904 |
(B) A resolution of dissolution for a corporation shall set | 905 |
forth | 906 |
| 907 |
| 908 |
(1) The date on which the certificate of dissolution is to be | 909 |
filed or the conditions or events that will result in the filing | 910 |
of the certificate; | 911 |
(2) Authorization for the officers or directors to abandon | 912 |
the proposed dissolution before the filing of the certificate of | 913 |
dissolution; | 914 |
(3) Any additional provision considered necessary with | 915 |
respect to the proposed dissolution and winding up. | 916 |
(C) If an initial stated capital is not set forth in the | 917 |
articles then before the corporation begins business, or if an | 918 |
initial stated capital is set forth in the articles then before | 919 |
subscriptions to shares shall have been received in the amount of | 920 |
that initial stated capital, the incorporators or a majority of | 921 |
them may adopt, by a writing signed by each of them, a resolution | 922 |
of dissolution. | 923 |
(D) The directors may adopt a resolution of dissolution in | 924 |
any of the following cases: | 925 |
(1) When the corporation has been adjudged bankrupt or has | 926 |
made a general assignment for the benefit of creditors; | 927 |
(2) By leave of the court, when a receiver has been appointed | 928 |
in a general creditors' suit or in any suit in which the affairs | 929 |
of the corporation are to be wound up; | 930 |
(3) When substantially all of the assets have been sold at | 931 |
judicial sale or otherwise; | 932 |
(4) When the articles have been canceled for failure to file | 933 |
annual franchise or excise tax returns or for failure to pay | 934 |
franchise or excise taxes and the corporation has not been | 935 |
reinstated or does not desire to be reinstated; | 936 |
(5) When the period of existence of the corporation specified | 937 |
in its articles has expired. | 938 |
(E) The shareholders at a meeting held for such purpose may | 939 |
adopt a resolution of dissolution by the affirmative vote of the | 940 |
holders of shares entitling them to exercise two-thirds of the | 941 |
voting power of the corporation on such proposal or, if the | 942 |
articles provide or permit, by the affirmative vote of a greater | 943 |
or lesser proportion, though not less than a majority, of such | 944 |
voting power, and by such affirmative vote of the holders of | 945 |
shares of any particular class as is required by the articles. | 946 |
Notice of the meeting of the shareholders shall be given to all | 947 |
the shareholders whether or not entitled to vote at it. | 948 |
(F) Upon the adoption of a resolution of dissolution, a | 949 |
certificate shall be prepared, on a form prescribed by the | 950 |
secretary of state, setting forth all of the following: | 951 |
(1) The name of the corporation; | 952 |
(2) A statement that a resolution of dissolution has been | 953 |
adopted; | 954 |
(3) A statement of the manner of adoption of such resolution, | 955 |
and, in the case of its adoption by the incorporators or | 956 |
directors, a statement of the basis for such adoption; | 957 |
(4) The place in this state where its principal office is or | 958 |
is to be located; | 959 |
(5) The | 960 |
961 | |
962 | |
963 | |
address of each domain name held or maintained by or on behalf of | 964 |
the corporation; | 965 |
(6) The name and address of its statutory agent; | 966 |
(7) The date of dissolution, if other than the filing date. | 967 |
The date of dissolution shall not be more than ninety days after | 968 |
the filing of the certificate of dissolution. | 969 |
(G) | 970 |
| 971 |
incorporators | 972 |
signed by not less than a majority of them | 973 |
| 974 |
975 | |
by any authorized officer, unless the officer fails to execute and | 976 |
file such certificate within thirty days after | 977 |
978 | |
date upon which such certificate is to be filed
| 979 |
980 | |
981 | |
982 | |
be signed by any three shareholders or, if there are less than | 983 |
three shareholders, all of the shareholders and shall set forth a | 984 |
statement that the persons signing the certificate are | 985 |
shareholders and are filing the certificate because of the failure | 986 |
of the officers to do so. | 987 |
(H) | 988 |
section, a certificate of dissolution, filed with the secretary of | 989 |
state, shall be accompanied by all of the following: | 990 |
(1) An affidavit of one or more of the persons executing the | 991 |
certificate of dissolution or of an officer of the corporation | 992 |
containing a statement of the counties, if any, in this state in | 993 |
which the corporation has personal property or a statement that | 994 |
the corporation is of a type required to pay personal property | 995 |
taxes to state authorities only; | 996 |
(2) A | 997 |
department of taxation showing the payment of all franchise, | 998 |
sales, use, and highway use taxes accruing up to the date | 999 |
1000 | |
1001 | |
1002 | |
guaranteed, or an affidavit of one or more of the persons | 1003 |
executing the certificate of dissolution or of an officer of the | 1004 |
corporation containing a statement that the corporation is not | 1005 |
required to pay any tax for which such a certificate or other | 1006 |
evidence is not provided; | 1007 |
(3) A | 1008 |
payment of all personal property and commercial activity taxes | 1009 |
accruing up to the date | 1010 |
1011 | |
1012 | |
payment has been adequately guaranteed, or an affidavit of one or | 1013 |
more of the persons executing the certificate of dissolution or of | 1014 |
an officer of the corporation containing a statement that the | 1015 |
corporation is not required to pay any tax for which such a | 1016 |
certificate or other evidence is not provided; | 1017 |
(4) A receipt, certificate, or other evidence from the | 1018 |
director of job and family services showing that all contributions | 1019 |
due from the corporation as an employer have been paid, or that | 1020 |
such payment has been adequately guaranteed, or that the | 1021 |
corporation is not subject to such contributions; | 1022 |
(5) A receipt, certificate, or other evidence from the bureau | 1023 |
of workers' compensation showing that all premiums due from the | 1024 |
corporation as an employer have been paid, or that such payment | 1025 |
has been adequately guaranteed, or that the corporation is not | 1026 |
subject to such premium payments | 1027 |
| 1028 |
described in division (H)(2), (3), (4), or (5) of this section, an | 1029 |
affidavit of one or more persons executing the certificate of | 1030 |
dissolution or of an officer of the corporation containing a | 1031 |
statement of the date upon which the particular department, | 1032 |
agency, or authority was advised in writing of the scheduled | 1033 |
effective date of the dissolution and was advised in writing of | 1034 |
the acknowledgment by the corporation of the applicability of the | 1035 |
provisions of section 1701.95 of the Revised Code. | 1036 |
| 1037 |
such accompanying documents or on a later date specified in the | 1038 |
certificate that is not more than ninety days after the filing, | 1039 |
the corporation shall be dissolved. | 1040 |
Sec. 1701.87. | 1041 |
1042 | |
1043 | |
1044 | |
certified or registered mail, return receipt requested, to each | 1045 |
known creditor and to each person that has a claim against the | 1046 |
corporation, including claims that are conditional, unmatured, or | 1047 |
contingent upon the occurrence or nonoccurrence of future events. | 1048 |
(B) The notice shall state all of the following: | 1049 |
(1) That all claims shall be presented in writing and shall | 1050 |
identify the claimant and contain sufficient information to | 1051 |
reasonably inform the corporation of the substance of the claim; | 1052 |
(2) The mailing address to which the person must send the | 1053 |
claim; | 1054 |
(3) The deadline, which shall be not less than sixty days | 1055 |
after the date the notice is given, by which the corporation must | 1056 |
receive the claim; | 1057 |
(4) That the claim will be barred if the corporation does not | 1058 |
receive the claim by the deadline; | 1059 |
(5) That the corporation may make distributions to other | 1060 |
creditors or claimants, including distributions to shareholders of | 1061 |
the corporation, without further notice to the claimant. | 1062 |
(C) Giving any notice or making any offer under this chapter | 1063 |
shall not revive any claim then barred or constitute | 1064 |
acknowledgment by the corporation that any person to whom the | 1065 |
corporation sent notice under this section is a proper claimant | 1066 |
and shall not operate as a waiver of any defense or counterclaim. | 1067 |
(D) A claim is barred if a claimant that was given written | 1068 |
notice under division (A) of this section does not deliver the | 1069 |
claim to the dissolved corporation by the deadline stated in the | 1070 |
notice. | 1071 |
(E) The corporation shall post the notice described in | 1072 |
division (B) of this section on any web site the corporation | 1073 |
maintains in the corporation's name and shall provide a copy of | 1074 |
the notice to the secretary of state to be posted on the web site | 1075 |
maintained by the secretary of state in accordance with division | 1076 |
(F) of this section. | 1077 |
(F)(1) Except as provided in division (F)(2) of this section, | 1078 |
the secretary of state shall make both of the following available | 1079 |
to the public in a format that is searchable, viewable, and | 1080 |
accessible through the internet: | 1081 |
(a) A list of all domestic corporations that have filed a | 1082 |
certificate of dissolution or have had their articles canceled; | 1083 |
(b) For each dissolved corporation on the list described in | 1084 |
division (F)(1)(a) of this section, a copy of both the certificate | 1085 |
of dissolution and the notice delivered under division (B) of this | 1086 |
section. | 1087 |
(2) After the materials relating to any dissolved or canceled | 1088 |
corporation have been posted for five years, the secretary of | 1089 |
state may remove from the web site the information that the | 1090 |
secretary posted pursuant to division (F)(1) of this section that | 1091 |
relates to that corporation. | 1092 |
(G) If the certificate of dissolution is filed five years or | 1093 |
less after the effective date of this amendment, the corporation | 1094 |
shall publish the notice described in division (B) of this section | 1095 |
at least once a week | 1096 |
successive weeks, in a newspaper published and of general | 1097 |
circulation in the county in which the principal office of the | 1098 |
corporation was to be or is located | 1099 |
1100 | |
1101 | |
1102 |
Sec. 1701.88. (A) When a corporation is dissolved | 1103 |
voluntarily, when the articles of a corporation have been | 1104 |
canceled, or when the period of existence of the corporation | 1105 |
specified in its articles has expired, the corporation shall cease | 1106 |
to carry on business and shall do only such acts as are required | 1107 |
to wind up its affairs, or to obtain reinstatement of the articles | 1108 |
in accordance with section 1701.07, 1701.921, 1785.06, or 5733.22 | 1109 |
of the Revised Code, or are permitted upon reinstatement by | 1110 |
division (C) of section 1701.922 of the Revised Code, and for such | 1111 |
purposes it shall continue as a corporation for a period of five | 1112 |
years from the dissolution, expiration, or cancellation. A court | 1113 |
acting pursuant to section 1701.89 of the Revised Code may extend | 1114 |
the five-year period allowed under this division. | 1115 |
(B) The voluntary dissolution of a corporation, cancellation | 1116 |
of the articles of a corporation, expiration of the period of | 1117 |
existence of a corporation, appointment of a receiver to wind up | 1118 |
the affairs of the corporation, or other action to dissolve a | 1119 |
corporation under this chapter shall not eliminate or impair any | 1120 |
remedy available to or against the corporation or its directors, | 1121 |
officers, or shareholders for any right or claim existing, or | 1122 |
liability incurred, prior to the dissolution, if either of the | 1123 |
following brings such an action: | 1124 |
(1) The corporation within the time limits otherwise | 1125 |
permitted by law; | 1126 |
(2) Any other person before five years after the date of the | 1127 |
dissolution or within the time limits otherwise required by | 1128 |
section 1701.881 of the Revised Code or any other provision of | 1129 |
law, whichever is less. | 1130 |
(C) Any claim existing or action or proceeding pending by or | 1131 |
against the corporation or which would have accrued against it may | 1132 |
be prosecuted to judgment, with right of appeal as in other cases, | 1133 |
but any proceeding, execution, or process, or the satisfaction or | 1134 |
performance of any order, judgment, or decree, may be stayed as | 1135 |
provided in section 1701.89 of the Revised Code. Any action, suit, | 1136 |
or proceeding begun by or against the corporation within the time | 1137 |
limits established in division (B) of this section shall not | 1138 |
abate, and the corporation shall, solely for the purpose of such | 1139 |
action, suit, or proceeding, be continued as a body corporate | 1140 |
beyond the five-year period and until any judgments, orders, or | 1141 |
decrees are fully executed, without the necessity for any court | 1142 |
order required under division (A) of this section. | 1143 |
| 1144 |
1145 | |
1146 | |
1147 |
(D) The directors of the corporation and their | 1148 |
successors shall act as a board of directors in accordance with | 1149 |
the articles and regulations | 1150 |
corporation are completely wound up. Subject to the orders of | 1151 |
courts of this state having jurisdiction over the corporation | 1152 |
acting pursuant to section 1701.89 of the Revised Code, the | 1153 |
directors shall proceed as speedily as is practicable to a | 1154 |
complete winding up of the affairs of the corporation | 1155 |
1156 | |
purpose, the directors may exercise all the authority of the | 1157 |
corporation. Without limiting the generality of such authority, | 1158 |
they may | 1159 |
(1) Fill vacancies | 1160 |
(2) Elect officers | 1161 |
(3) Appoint agents, liquidators, or other entities or persons | 1162 |
to carry out the winding up of the corporation's business; | 1163 |
(4) Carry out contracts of the corporation | 1164 |
(5) Make new contracts | 1165 |
(6) Borrow money | 1166 |
(7) Mortgage or pledge the property of the corporation as | 1167 |
security | 1168 |
(8) Sell its assets at public or private sale | 1169 |
(9) Make conveyances in the corporate name | 1170 |
(10) Lease real estate for any term, including ninety-nine | 1171 |
years renewable forever | 1172 |
(11) Settle or compromise claims in favor of or against the | 1173 |
corporation | 1174 |
(12) Employ one or more persons as liquidators to wind up the | 1175 |
affairs of the corporation with such authority as the directors | 1176 |
see fit to grant | 1177 |
(13) Cause the title to any of the assets of the corporation | 1178 |
to be conveyed to such liquidators for that purpose | 1179 |
(14) Apply assets to the payment of obligations | 1180 |
1181 | |
1182 |
(15) Distribute the remainder of the assets either in cash or | 1183 |
in kind among the shareholders according to their respective | 1184 |
rights and interests | 1185 |
or adequately providing for the payment of all known obligations | 1186 |
of the corporation under section 1701.882 of the Revised Code and | 1187 |
for claims that have not been made known to the corporation or | 1188 |
that have not arisen but that, based on facts known to the | 1189 |
corporation, are likely to arise or to become known to the | 1190 |
corporation within five years after the date of dissolution or | 1191 |
such longer period of time as the directors or a court acting | 1192 |
under section 1701.89 of the Revised Code may determine, not to | 1193 |
exceed ten years after the date of dissolution; | 1194 |
(16) Perform all other acts necessary or expedient to the | 1195 |
winding up of the affairs of the corporation. | 1196 |
Division (E) of section 1701.76 of the Revised Code applies | 1197 |
to the disposition of a voluntarily dissolved corporation's assets | 1198 |
by its directors. | 1199 |
(E) | 1200 |
1201 | |
1202 | |
1203 | |
1204 | |
1205 | |
1206 |
| 1207 |
1208 | |
1209 | |
1210 |
| 1211 |
corporation by its directors may make application | 1212 |
1213 | |
1214 | |
continued under supervision of the court, as provided in section | 1215 |
1701.89 of the Revised Code. | 1216 |
(F) If any property right of a corporation is discovered | 1217 |
after the winding up of the corporation, any member or members of | 1218 |
the board of directors that wound up the affairs of the | 1219 |
corporation, or a receiver appointed by the court, may enforce the | 1220 |
property right, collect and divide the assets discovered among the | 1221 |
persons entitled to those assets, and prosecute actions or | 1222 |
proceedings in the corporate name of the corporation. Any assets | 1223 |
collected under this division shall be distributed and disposed of | 1224 |
in accordance with any applicable court order or, in the absence | 1225 |
of a court order, in accordance with this section. | 1226 |
(G) In the event a receiver is appointed to wind up the | 1227 |
affairs of the corporation, or an action is commenced under | 1228 |
section 1701.91 of the Revised Code to dissolve the corporation, | 1229 |
the five-year period specified in divisions (A) and (B)(2) of this | 1230 |
section shall not commence until: | 1231 |
(1) The effective date of dissolution under division (J) of | 1232 |
section 1701.86 of the Revised Code, if a certificate of | 1233 |
dissolution is filed under that section; or | 1234 |
(2) The date of filing of a certified copy of an order of | 1235 |
dissolution in the office of the secretary of state under division | 1236 |
(D) of section 1701.91 of the Revised Code. | 1237 |
Sec. 1701.881. (A) A corporation that has given notice under | 1238 |
division (A) of section 1701.87 of the Revised Code may reject, in | 1239 |
whole or in part, any matured claim made by a claimant by sending | 1240 |
notice of the rejection by certified or registered mail, return | 1241 |
receipt requested, to the claimant within ninety days after | 1242 |
receipt of the claim and at least thirty days before the | 1243 |
expiration of the five-year period specified in division (A) of | 1244 |
section 1701.88 of the Revised Code. A notice sent pursuant to | 1245 |
this section shall include or be accompanied by a copy of this | 1246 |
division and of section 1701.89 of the Revised Code. A claim | 1247 |
against a corporation is barred if a claimant whose claim is | 1248 |
rejected by the corporation does not commence an action to enforce | 1249 |
the claim within thirty days after the corporation mails the | 1250 |
rejection notice. | 1251 |
(B) A corporation that has given notice under division (A) of | 1252 |
section 1701.87 of the Revised Code may offer security to any | 1253 |
claimant whose claim is contingent, conditional, or unmatured as | 1254 |
the corporation determines is sufficient to provide compensation | 1255 |
to the claimant if the claim matures. The corporation shall send | 1256 |
the corporation's offer to the claimant by certified or registered | 1257 |
mail, return receipt requested, within ninety days after receipt | 1258 |
of the claim and at least thirty days before the expiration of the | 1259 |
five-year period specified in division (A) of section 1701.88 of | 1260 |
the Revised Code. A notice sent pursuant to this section shall | 1261 |
include or be accompanied by a copy of this division and of | 1262 |
section 1701.89 of the Revised Code. If the claimant offered the | 1263 |
security does not deliver to the corporation a written notice | 1264 |
rejecting the offer within thirty days after the corporation mails | 1265 |
the offer for security, the claimant shall be deemed to have | 1266 |
accepted the security as the sole source from which to satisfy | 1267 |
claimant's claim against the corporation. | 1268 |
(C) A corporation that has given notice under division (A) of | 1269 |
section 1701.87 of the Revised Code may file an application with | 1270 |
the court having jurisdiction under section 1701.89 of the Revised | 1271 |
Code for a determination of the amount and form of insurance or | 1272 |
other security that satisfies both of the following requirements: | 1273 |
(1) The insurance or other security will be sufficient to | 1274 |
provide compensation to any claimant who has rejected the offer | 1275 |
for security made pursuant to this section. | 1276 |
(2) The insurance or other security will be reasonably likely | 1277 |
to be sufficient to provide compensation for claims that have not | 1278 |
been made known to the corporation or that have not arisen but | 1279 |
that, based on the facts known to the corporation, are likely to | 1280 |
arise or to become known to the corporation within five years | 1281 |
after the date of dissolution or such longer period of time as the | 1282 |
directors or a court acting under section 1701.89 of the Revised | 1283 |
Code may determine, not to exceed ten years after the date of | 1284 |
dissolution. | 1285 |
Sec. 1701.882. (A) A dissolved corporation shall do all of | 1286 |
the following: | 1287 |
(1) Pay the claims made and not rejected under division (A) | 1288 |
of section 1701.881 of the Revised Code; | 1289 |
(2) Post the security offered and not rejected under division | 1290 |
(B) of section 1701.881 of the Revised Code; | 1291 |
(3) Post security ordered by the court in any proceeding | 1292 |
under division (C) of section 1701.881 of the Revised Code; | 1293 |
(4) Make any payment required by a court acting under section | 1294 |
1701.89 of the Revised Code; | 1295 |
(5) Pay or make provision by insurance or otherwise for all | 1296 |
other claims that are mature, known, and uncontested or that have | 1297 |
been finally determined to be owing by the corporation and any | 1298 |
other claims described in division (C)(2) of section 1701.881 of | 1299 |
the Revised Code. | 1300 |
(B) A corporation shall pay in full any claims and | 1301 |
liabilities or provide for those payments in full by insurance or | 1302 |
otherwise if the corporation has sufficient assets. If the | 1303 |
corporation does not have sufficient assets, a corporation shall | 1304 |
pay claims and liabilities or provide for those payments by | 1305 |
insurance or otherwise in order of their priority. Among claims of | 1306 |
equal priority, the corporation shall apportion those payments to | 1307 |
the extent of funds legally available for the payment of those | 1308 |
claims. Any remaining assets shall be distributed to the | 1309 |
shareholders of the corporation according to their respective | 1310 |
rights and preferences. | 1311 |
(C) In the absence of fraud, the judgment of the board of | 1312 |
directors of the dissolved corporation as to the provision the | 1313 |
corporation made for the payment of all claims under division | 1314 |
(A)(5) of this section shall be conclusive. | 1315 |
Sec. 1701.883. (A) The dissolution of a corporation shall not | 1316 |
affect the limited liability of a shareholder with respect to | 1317 |
transactions occurring or acts or omissions done or omitted in the | 1318 |
name of or by the corporation. | 1319 |
(B) A shareholder who receives a distribution of assets from | 1320 |
a dissolved corporation shall not be liable for any claim against | 1321 |
the corporation in an amount in excess of the amount of | 1322 |
shareholder's pro rata share of the claim or the amount | 1323 |
distributed to the shareholder, whichever is less. The aggregate | 1324 |
liability of any shareholder for claims against a dissolved | 1325 |
corporation shall not exceed the amount distributed to that | 1326 |
stockholder after the dissolution. | 1327 |
(C) A shareholder of a dissolved corporation, the assets of | 1328 |
which were distributed pursuant to this chapter, may be liable for | 1329 |
a claim against the corporation only if an action on that claim is | 1330 |
commenced before expiration of the period specified in division | 1331 |
(B)(2) of section 1701.88 of the Revised Code. | 1332 |
Sec. 1701.89. (A) Without limiting the generality of its | 1333 |
authority, the court of common pleas of the county in this state | 1334 |
in which | 1335 |
dissolved corporation | 1336 |
was to be located, or in which the principal office of a | 1337 |
corporation whose articles have been canceled or whose period of | 1338 |
existence has expired is located, upon the complaint of the | 1339 |
corporation, a majority of the directors, or a creditor or | 1340 |
1341 | |
and such other persons interested as the court considers proper, | 1342 |
at any time may order and adjudge in respect of all of the | 1343 |
following matters: | 1344 |
(1) Any proceedings or actions under division (C) of section | 1345 |
1701.881 of the Revised Code; | 1346 |
(2) The presentation and proof of all claims and demands | 1347 |
against the corporation and of all rights, interests, or liens in | 1348 |
or on any of its property including property described in division | 1349 |
(F) of section 1701.88 of the Revised Code; the fixing of the time | 1350 |
within which and the manner in which such proof shall be made and | 1351 |
the person to whom such presentation shall be made; and the | 1352 |
barring from participation in any distribution of assets of all | 1353 |
persons failing to make and present proofs as required by the | 1354 |
order of the court; | 1355 |
| 1356 |
the corporation or involving any of its property, and the | 1357 |
requirement that the parties to it present and prove their claims, | 1358 |
demands, rights, interests, or liens at the time and in the manner | 1359 |
required of creditors or others; or the grant | 1360 |
or maintain an independent proceeding to enforce liens; | 1361 |
| 1362 |
nature against the corporation or any of its property; the | 1363 |
determination of the assets required to be retained or insurance | 1364 |
to be obtained to pay or provide for the payment of such claims or | 1365 |
any claim; the determination of the assets available for | 1366 |
distribution among shareholders; and the making of new parties to | 1367 |
the proceeding so far as the court considers proper for the | 1368 |
determination of all matters; | 1369 |
| 1370 |
of all classes in and to the assets of the corporation; | 1371 |
| 1372 |
accounts of the directors or of the liquidators and hearings on | 1373 |
them; the allowance, disallowance, or settlement of such accounts; | 1374 |
and the discharge of the directors, the liquidators, or any of | 1375 |
them from their duties and liabilities; | 1376 |
| 1377 |
guardian ad litem to hear and determine any such matters with such | 1378 |
authority as the court considers proper | 1379 |
proceeding shall pay the reasonable fees and expenses of the | 1380 |
special master commissioner or guardian ad litem, including all | 1381 |
reasonable expert witness fees, unless otherwise ordered by the | 1382 |
court. | 1383 |
| 1384 |
directors or liquidators when the directors are unable to act on | 1385 |
the vacancies for want of a quorum or for any other reason; | 1386 |
| 1387 |
usages of a court in equitable matters, to wind up the affairs of | 1388 |
the corporation, to take custody of any of its property, or for | 1389 |
any other purpose; | 1390 |
| 1391 |
order which the court considers proper in the administration of | 1392 |
the trust involved in the winding up of the affairs of the | 1393 |
corporation and the giving of notice of it; | 1394 |
| 1395 |
directors or any of them | 1396 |
1397 | |
services beneficial to the corporation or to those interested in | 1398 |
it; | 1399 |
| 1400 |
provides, may operate as the deed or other instrument ordered to | 1401 |
be executed, or the appointment of a master or guardian ad litem | 1402 |
to execute such deed or instrument in the name of the corporation | 1403 |
with the same effect as if executed by an authorized officer | 1404 |
pursuant to authority conferred by the directors or the | 1405 |
shareholders of the corporation, whenever there is no officer or | 1406 |
agent competent to execute such deed or instrument, whenever the | 1407 |
corporation or its officers do not perform or comply with a | 1408 |
judgment or decree of court, or whenever the court considers it | 1409 |
proper. | 1410 |
(B) A judicial proceeding under this section concerning the | 1411 |
winding up of the affairs of a corporation is a special | 1412 |
proceeding, and final orders in the proceeding may be vacated, | 1413 |
modified, or reversed on appeal pursuant to the Rules of Appellate | 1414 |
Procedure and, to the extent not in conflict with those rules, | 1415 |
Chapter 2505. of the Revised Code. | 1416 |
Sec. 1701.90. (A) Whenever, after a corporation is dissolved | 1417 |
voluntarily or the articles of a corporation have been cancelled | 1418 |
or the period of existence of a corporation has expired, a | 1419 |
receiver is appointed to wind up the affairs of the corporation, | 1420 |
all the claims, demands, rights, interests, or liens of creditors, | 1421 |
claimants, and shareholders shall be determined as of the day on | 1422 |
which the receiver was appointed unless those claims, demands, | 1423 |
rights, interests, or liens have already been determined under | 1424 |
section 1701.881 of the Revised Code. Unless it is otherwise | 1425 |
ordered, such appointment vests in the receiver and | 1426 |
receiver's successors the right to the immediate possession of all | 1427 |
the property of the corporation, which shall, if so ordered, | 1428 |
execute and deliver conveyances of such property to the receiver | 1429 |
or | 1430 |
(B) Any officer, director, shareholder, or other person, | 1431 |
whether a resident of the state or a non-resident and however | 1432 |
interested, may be appointed as receiver. | 1433 |
(C) | 1434 |
the authority vested in the directors and officers of the | 1435 |
corporation, shall exercise such authority subject to such orders | 1436 |
as are made by the court, and may be required to qualify by giving | 1437 |
bond to the state in such amount as the court fixes, with surety | 1438 |
to the satisfaction of the clerk of the court, conditioned for the | 1439 |
faithful discharge of | 1440 |
accounting for all money or property received by | 1441 |
Sec. 1701.91. (A) A corporation may be dissolved judicially | 1442 |
and its affairs wound up: | 1443 |
(1) By an order of the supreme court or of a court of appeals | 1444 |
in an action in quo warranto brought as provided by sections | 1445 |
2733.02 to 2733.39 of the Revised Code, in which event the court | 1446 |
may order the affairs of the corporation to be wound up by its | 1447 |
directors as in the case of voluntary dissolution, or by | 1448 |
proceedings in, and under the order of, the court of common pleas | 1449 |
of the county in this state in which the corporation has its | 1450 |
principal office; | 1451 |
(2) By an order of the court of common pleas of the county in | 1452 |
this state in which such corporation has its principal office, in | 1453 |
an action brought by holders of shares entitled to dissolve the | 1454 |
corporation voluntarily, when it is established that any of the | 1455 |
following are true: | 1456 |
(a) That its articles have been canceled or its period of | 1457 |
existence has expired | 1458 |
1459 |
(b) That the corporation is insolvent or is unable to afford | 1460 |
reasonable security to those who may deal with it and that it is | 1461 |
necessary in order to protect the creditors of the corporation | 1462 |
that the corporation be judicially dissolved; | 1463 |
(c) That the objects of the corporation have wholly failed or | 1464 |
are entirely abandoned or that their accomplishment is | 1465 |
impracticable; | 1466 |
(3) By an order of the court of common pleas of the county in | 1467 |
this state in which the corporation has its principal office, in | 1468 |
an action brought by the holders of shares entitling them to | 1469 |
exercise | 1470 |
corporation on such proposal | 1471 |
1472 | |
1473 | |
beneficial to the shareholders that the corporation be judicially | 1474 |
dissolved, or the holders of such lesser proportion as are | 1475 |
entitled by the articles to dissolve the corporation voluntarily; | 1476 |
(4) By an order of the court of common pleas of the county in | 1477 |
this state in which the corporation has its principal office, in | 1478 |
an action brought by one-half of the directors when there is an | 1479 |
even number of directors or by the holders of shares entitling | 1480 |
them to exercise | 1481 |
when it is established that the corporation has an even number of | 1482 |
directors who are deadlocked in the management of the corporate | 1483 |
affairs and the shareholders are unable to break the deadlock, or | 1484 |
when it is established that the corporation has an uneven number | 1485 |
of directors and that the shareholders are deadlocked in voting | 1486 |
power and unable to agree upon or vote for the election of | 1487 |
directors as successors to directors whose terms normally would | 1488 |
expire upon the election of their successors. Under these | 1489 |
circumstances, dissolution of the corporation shall not be denied | 1490 |
on the ground that the corporation is solvent or on the ground | 1491 |
that the business of the corporation has been or could be | 1492 |
conducted at a profit. | 1493 |
(5) By an order of the court of common pleas of the county in | 1494 |
which the corporation, whether for profit or nonprofit, has its | 1495 |
principal office, in an action brought by the prosecuting attorney | 1496 |
of the county, when it is found that the corporation was organized | 1497 |
or systematically used to further criminal purposes, or as a | 1498 |
subterfuge to engage in prostitution, gambling, loan sharking, | 1499 |
drug abuse, illegal drug distribution, counterfeiting, obscenity, | 1500 |
extortion, corruption of law enforcement officers or other public | 1501 |
officers, officials, or any employees, or any other criminal | 1502 |
activity. | 1503 |
(B) A complaint for judicial dissolution shall be verified by | 1504 |
any of the complainants and shall set forth facts showing that the | 1505 |
case is one of those specified in this section. Unless the | 1506 |
complainants set forth in the complaint that they are unable to | 1507 |
annex a list of shareholders, a schedule shall be annexed to the | 1508 |
complaint setting forth the name of each shareholder, his address | 1509 |
if it is known or the fact that it is not known, the number of | 1510 |
shares owned by him, and any balance unpaid on his shares. | 1511 |
(C) Upon the filing of a complaint for judicial dissolution, | 1512 |
the court with which it is filed shall have power to issue | 1513 |
injunctions, to appoint a receiver with such authority and duties | 1514 |
as the court from time to time may direct, to take such other | 1515 |
proceedings as may be necessary to protect the property or the | 1516 |
rights of the complainants or of the persons interested, and to | 1517 |
carry on the business of the corporation until a full hearing can | 1518 |
be had. Upon or after the filing of a complaint for judicial | 1519 |
dissolution, the court, by injunction or order, may stay the | 1520 |
prosecution of any proceeding against the corporation or involving | 1521 |
any of its property and require the parties to the proceeding to | 1522 |
present and prove their claims, demands, rights, interests, or | 1523 |
liens, at the time and in the manner required of creditors or | 1524 |
others. The court may refer the complaint to a special master | 1525 |
commissioner. | 1526 |
(D) After a hearing had upon such notice as the court may | 1527 |
direct to be given to all parties to the proceeding and to any | 1528 |
other parties in interest designated by the court, a final order | 1529 |
based either upon the evidence, or upon the report of the special | 1530 |
master commissioner if one has been appointed, shall be made | 1531 |
dissolving the corporation or dismissing the complaint. An order | 1532 |
or judgment for the judicial dissolution of a corporation shall | 1533 |
contain a concise statement of the proceedings leading up to the | 1534 |
order or judgment; the name of the corporation; the place in this | 1535 |
state where its principal office is located; the names and | 1536 |
addresses of its directors and officers; the name and address of a | 1537 |
statutory agent; and, if desired, such other provisions with | 1538 |
respect to the judicial dissolution and winding up as are | 1539 |
considered necessary or desirable. A certified copy of such order | 1540 |
forthwith shall be filed in the office of the secretary of state, | 1541 |
whereupon the corporation shall be dissolved. To the extent | 1542 |
consistent with orders entered in such proceeding, the effect of | 1543 |
such judicial dissolution shall be the same as in the case of | 1544 |
voluntary dissolution, and the provisions of sections 1701.87, | 1545 |
1701.88, 1701.89, and 1701.90 of the Revised Code relating to the | 1546 |
authority and duties of directors during the winding up of the | 1547 |
affairs of a corporation dissolved voluntarily, with respect to | 1548 |
the jurisdiction of courts over the winding up of the affairs of a | 1549 |
corporation, and with respect to receivers for winding up the | 1550 |
affairs of a corporation shall be applicable to corporations | 1551 |
judicially dissolved. | 1552 |
(E) A judicial proceeding under this section concerning the | 1553 |
judicial dissolution of a corporation is a special proceeding, and | 1554 |
final orders in it may be vacated, modified, or reversed on appeal | 1555 |
pursuant to the Rules of Appellate Procedure or the Rules of | 1556 |
Practice of the Supreme Court, whichever are applicable, and, to | 1557 |
the extent not in conflict with those rules, Chapter 2505. of the | 1558 |
Revised Code. | 1559 |
Sec. 1701.911. (A) Upon the complaint of not less than | 1560 |
one-fourth of the directors of a corporation or upon the complaint | 1561 |
of the holders of shares entitling them to exercise not less than | 1562 |
one-fifth of the voting power of a corporation in the election of | 1563 |
directors, the court of common pleas of the county in which the | 1564 |
corporation maintains its principal office may order the | 1565 |
appointment of a provisional director for that corporation if the | 1566 |
articles or regulations of the corporation expressly provide for | 1567 |
such an appointment. No appointment shall be made until a hearing | 1568 |
is held by the court. Notice of the hearing shall be given to each | 1569 |
director and the secretary of the corporation in any manner that | 1570 |
the court may direct. If directed by the court, the notice also | 1571 |
shall be given to each of the shareholders. The complainants shall | 1572 |
establish at the hearing that, because of irreconcilable | 1573 |
differences among the existing directors or because there are no | 1574 |
directors and the shareholders are unable to elect any directors, | 1575 |
the continued operation of the corporation has been substantially | 1576 |
impeded or made impossible. | 1577 |
(B) A provisional director shall have the same rights and | 1578 |
duties as other directors and shall serve until removed by the | 1579 |
appointing court or by the holders of shares entitling them to | 1580 |
exercise a majority of the voting power of the corporation in the | 1581 |
election of directors, or until | 1582 |
earlier resignation or death. If the provisional director dies or | 1583 |
resigns, the court, pursuant to divisions (A) and (C) of this | 1584 |
section, may appoint a replacement provisional director, upon its | 1585 |
own motion and without the filing of a complaint for the | 1586 |
appointment of a provisional director. If the appointing court | 1587 |
finds that the irreconcilable differences no longer exist, it | 1588 |
shall order the removal of the provisional director. | 1589 |
(C) No person shall be appointed as a provisional director | 1590 |
unless | 1591 |
affairs, has no legal or equitable interest in the shares or | 1592 |
obligations of the corporation of which | 1593 |
appointed a director, and is not indebted to such corporation. The | 1594 |
compensation of a provisional director shall be determined by | 1595 |
agreement with the corporation for which | 1596 |
director is serving, subject to the approval of the appointing | 1597 |
court, except that the appointing court may fix | 1598 |
provisional director's compensation in the absence of agreement or | 1599 |
in the event of disagreement between the provisional director and | 1600 |
the corporation. | 1601 |
(D) A proceeding concerning the appointment of a provisional | 1602 |
director of a corporation is a special proceeding, and final | 1603 |
orders issued in the proceeding may be vacated, modified, or | 1604 |
reversed on appeal pursuant to the Rules of Appellate Procedure | 1605 |
and, to the extent not in conflict with those rules, Chapter 2505. | 1606 |
of the Revised Code. | 1607 |
Sec. 1702.12. (A) A corporation may sue and be sued. | 1608 |
(B) A corporation may adopt and alter a corporate seal and | 1609 |
use it or a facsimile of it, but failure to affix the corporate | 1610 |
seal shall not affect the validity of any instrument. | 1611 |
(C) Unless otherwise provided in the articles, a corporation | 1612 |
may take property of any description, or any interest in property, | 1613 |
by gift, devise, or bequest. | 1614 |
(D) Subject to limitations prescribed by law or in its | 1615 |
articles, a corporation may make donations for the public welfare, | 1616 |
for religious, charitable, scientific, literary, or educational | 1617 |
purposes, or in furtherance of any of its purposes. | 1618 |
(E)(1) A corporation may indemnify or agree to indemnify any | 1619 |
person who was or is a party, or is threatened to be made a party, | 1620 |
to any threatened, pending, or completed civil, criminal, | 1621 |
administrative, or investigative action, suit, or proceeding, | 1622 |
other than an action by or in the right of the corporation, by | 1623 |
reason of the fact that the person is or was a director, officer, | 1624 |
employee, or agent of or a volunteer of the corporation, or is or | 1625 |
was serving at the request of the corporation as a director, | 1626 |
officer, employee, member, manager, or agent of or a volunteer of | 1627 |
another domestic or foreign nonprofit corporation or business | 1628 |
corporation, a limited liability company, or a partnership, joint | 1629 |
venture, trust, or other enterprise, against expenses, including | 1630 |
attorney's fees, judgments, fines, and amounts paid in settlement | 1631 |
actually and reasonably incurred by the person in connection with | 1632 |
such action, suit, or proceeding, if the person acted in good | 1633 |
faith and in a manner the person reasonably believed to be in or | 1634 |
not opposed to the best interests of the corporation, and, with | 1635 |
respect to any criminal action or proceeding, if the person had no | 1636 |
reasonable cause to believe the person's conduct was unlawful. The | 1637 |
termination of any action, suit, or proceeding by judgment, order, | 1638 |
settlement, or conviction, or upon a plea of nolo contendere or | 1639 |
its equivalent, shall not create, of itself, a presumption that | 1640 |
the person did not act in good faith and in a manner the person | 1641 |
reasonably believed to be in or not opposed to the best interests | 1642 |
of the corporation, and, with respect to any criminal action or | 1643 |
proceeding, a presumption that the person had reasonable cause to | 1644 |
believe that the person's conduct was unlawful. | 1645 |
(2) A corporation may indemnify or agree to indemnify any | 1646 |
person who was or is a party, or is threatened to be made a party, | 1647 |
to any threatened, pending, or completed action or suit by or in | 1648 |
the right of the corporation to procure a judgment in its favor, | 1649 |
by reason of the fact that the person is or was a director, | 1650 |
officer, employee, or agent of or a volunteer of the corporation, | 1651 |
or is or was serving at the request of the corporation as a | 1652 |
director, officer, employee, member, manager, or agent of or a | 1653 |
volunteer of another domestic or foreign nonprofit corporation or | 1654 |
business corporation, a limited liability company, or a | 1655 |
partnership, joint venture, trust, or other enterprise against | 1656 |
expenses, including attorney's fees, actually and reasonably | 1657 |
incurred by the person in connection with the defense or | 1658 |
settlement of such action or suit, if the person acted in good | 1659 |
faith and in a manner the person reasonably believed to be in or | 1660 |
not opposed to the best interests of the corporation, except that | 1661 |
no indemnification shall be made in respect of any of the | 1662 |
following: | 1663 |
(a) Any claim, issue, or matter as to which the person is | 1664 |
adjudged to be liable for negligence or misconduct in the | 1665 |
performance of the person's duty to the corporation unless, and | 1666 |
only to the extent that, the court of common pleas or the court in | 1667 |
which the action or suit was brought determines, upon application, | 1668 |
that, despite the adjudication of liability but in view of all the | 1669 |
circumstances of the case, the person is fairly and reasonably | 1670 |
entitled to indemnity for such expenses as the court of common | 1671 |
pleas or such other court considers proper; | 1672 |
(b) Any action or suit in which liability is asserted against | 1673 |
a director and that liability is asserted only pursuant to section | 1674 |
1702.55 of the Revised Code. | 1675 |
(3) To the extent that a director, officer, employee, member, | 1676 |
manager, agent, or volunteer has been successful on the merits or | 1677 |
otherwise in defense of any action, suit, or proceeding referred | 1678 |
to in division (E)(1) or (2) of this section, or in defense of any | 1679 |
claim, issue, or matter in such an action, suit, or proceeding, | 1680 |
the person shall be indemnified against expenses, including | 1681 |
attorney's fees, actually and reasonably incurred by the person in | 1682 |
connection with that action, suit, or proceeding. | 1683 |
(4) Unless ordered by a court and subject to division (E)(3) | 1684 |
of this section, any indemnification under division (E)(1) or (2) | 1685 |
of this section shall be made by the corporation only as | 1686 |
authorized in the specific case, upon a determination that | 1687 |
indemnification of the director, officer, employee, member, | 1688 |
manager, agent, or volunteer is proper in the circumstances | 1689 |
because the person has met the applicable standard of conduct set | 1690 |
forth in division (E)(1) or (2) of this section. Such | 1691 |
determination shall be made in any of the following manners: | 1692 |
(a) By a majority vote of a quorum consisting of directors of | 1693 |
the indemnifying corporation who were not and are not parties to | 1694 |
or threatened with the action, suit, or proceeding referred to in | 1695 |
division (E)(1) or (2) of this section; | 1696 |
(b) Whether or not a quorum as described in division | 1697 |
(E)(4)(a) of this section is obtainable, and if a majority of a | 1698 |
quorum of disinterested directors so directs, in a written opinion | 1699 |
by independent legal counsel other than an attorney, or a firm | 1700 |
having associated with it an attorney, who has been retained by or | 1701 |
who has performed services for the corporation or any person to be | 1702 |
indemnified within the past five years; | 1703 |
(c) By the members; | 1704 |
(d) By the court of common pleas or the court in which the | 1705 |
action, suit, or proceeding referred to in division (E)(1) or (2) | 1706 |
of this section was brought. | 1707 |
If an action or suit by or in the right of the corporation is | 1708 |
involved, any determination made by the disinterested directors | 1709 |
under division (E)(4)(a) of this section or by independent legal | 1710 |
counsel under division (E)(4)(b) of this section shall be | 1711 |
communicated promptly to the person who threatened or brought the | 1712 |
action or suit under division (E)(2) of this section, and, within | 1713 |
ten days after receipt of | 1714 |
shall have the right to petition the court of common pleas or the | 1715 |
court in which | 1716 |
reasonableness of | 1717 |
(5)(a)(i) Unless, at the time of a director's or volunteer's | 1718 |
act or omission that is the subject of an action, suit, or | 1719 |
proceeding referred to in division (E)(1) or (2) of this section, | 1720 |
the articles or regulations of the corporation state, by specific | 1721 |
reference to this division, that its provisions do not apply to | 1722 |
the corporation, or unless the only liability asserted against a | 1723 |
director in an action, suit, or proceeding referred to in division | 1724 |
(E)(1) or (2) of this section is pursuant to section 1702.55 of | 1725 |
the Revised Code, or unless division (E)(5)(a)(ii) of this section | 1726 |
applies, the expenses incurred by the director or volunteer in | 1727 |
defending the action, suit, or proceeding, including attorney's | 1728 |
fees, shall be paid by the corporation. Upon the request of the | 1729 |
director or volunteer and in accordance with division (E)(5)(b) of | 1730 |
this section, those expenses shall be paid as they are incurred, | 1731 |
in advance of the final disposition of the action, suit, or | 1732 |
proceeding. | 1733 |
(ii) Notwithstanding division (E)(5)(a)(i) of this section, | 1734 |
the expenses incurred by a director or volunteer in defending an | 1735 |
action, suit, or proceeding referred to in division (E)(1) or (2) | 1736 |
of this section, including attorney's fees, shall not be paid by | 1737 |
the corporation upon the final disposition of the action, suit, or | 1738 |
proceeding, or, if paid in advance of the final disposition of the | 1739 |
action, suit, or proceeding, shall be repaid to the corporation by | 1740 |
the director or volunteer, if it is proved, by clear and | 1741 |
convincing evidence, in a court with jurisdiction that the act or | 1742 |
omission of the director or volunteer was one undertaken with a | 1743 |
deliberate intent to cause injury to the corporation or was one | 1744 |
undertaken with a reckless disregard for the best interests of the | 1745 |
corporation. | 1746 |
(b) Expenses, including attorney's fees, incurred by a | 1747 |
director, officer, employee, member, manager, agent, or volunteer | 1748 |
in defending any action, suit, or proceeding referred to in | 1749 |
division (E)(1) or (2) of this section may be paid by the | 1750 |
corporation as they are incurred, in advance of the final | 1751 |
disposition of the action, suit, or proceeding, as authorized by | 1752 |
the directors in the specific case, upon receipt of an undertaking | 1753 |
by or on behalf of the director, officer, employee, member, | 1754 |
manager, agent, or volunteer to repay the amount if it ultimately | 1755 |
is determined that the person is not entitled to be indemnified by | 1756 |
the corporation. | 1757 |
(6) The indemnification or advancement of expenses authorized | 1758 |
by this section is not exclusive of, and shall be in addition to, | 1759 |
any other rights granted to those seeking indemnification or | 1760 |
advancement of expenses, pursuant to the articles, the | 1761 |
regulations, any agreement, a vote of members or disinterested | 1762 |
directors, or otherwise, both as to action in their official | 1763 |
capacities and as to action in another capacity while holding | 1764 |
their offices or positions, and shall continue as to a person who | 1765 |
has ceased to be a director, officer, employee, member, manager, | 1766 |
agent, or volunteer and shall inure to the benefit of the heirs, | 1767 |
executors, and administrators of | 1768 |
indemnification or to advancement of expenses arising under a | 1769 |
provision of the articles or the regulations shall not be | 1770 |
eliminated or impaired by an amendment to that provision after the | 1771 |
occurrence of the act or omission that becomes the subject of the | 1772 |
civil, criminal, administrative, or investigative action, suit, or | 1773 |
proceeding for which the indemnification or advancement of | 1774 |
expenses is sought, unless the provision in effect at the time of | 1775 |
that act or omission explicitly authorizes that elimination or | 1776 |
impairment after the act or omission has occurred. | 1777 |
(7) A corporation may purchase and maintain insurance, or | 1778 |
furnish similar protection, including, but not limited to, trust | 1779 |
funds, letters of credit, or self-insurance, for or on behalf of | 1780 |
any person who is or was a director, officer, employee, agent, or | 1781 |
volunteer of the corporation, or is or was serving at the request | 1782 |
of the corporation as a director, officer, employee, member, | 1783 |
manager, agent, or volunteer of another domestic or foreign | 1784 |
nonprofit corporation or business corporation, a limited liability | 1785 |
company, or a partnership, joint venture, trust, or other | 1786 |
enterprise, against any liability asserted against the person and | 1787 |
incurred by the person in any such capacity, or arising out of the | 1788 |
person's status as such, whether or not the corporation would have | 1789 |
the power to indemnify the person against that liability under | 1790 |
this section. Insurance may be so purchased from or so maintained | 1791 |
with a person in which the corporation has a financial interest. | 1792 |
(8) The authority of a corporation to indemnify persons | 1793 |
pursuant to division (E)(1) or (2) of this section does not limit | 1794 |
the payment of expenses as they are incurred, in advance of the | 1795 |
final disposition of an action, suit, or proceeding, pursuant to | 1796 |
division (E)(5) of this section or the payment of indemnification, | 1797 |
insurance, or other protection that may be provided pursuant to | 1798 |
division (E)(6) or (7) of this section. Divisions (E)(1) and (2) | 1799 |
of this section do not create any obligation to repay or return | 1800 |
payments made by a corporation pursuant to division (E)(5), (6), | 1801 |
or (7) of this section. | 1802 |
(9) As used in division (E) of this section, "corporation" | 1803 |
includes all constituent corporations in a consolidation or | 1804 |
merger, and the new or surviving corporation, so that any person | 1805 |
who is or was a director, officer, employee, agent, or volunteer | 1806 |
of a constituent corporation or is or was serving at the request | 1807 |
of a constituent corporation as a director, officer, employee, | 1808 |
member, manager, agent, or volunteer of another domestic or | 1809 |
foreign nonprofit corporation or business corporation, a limited | 1810 |
liability company, or a partnership, joint venture, trust, or | 1811 |
other enterprise, shall stand in the same position under this | 1812 |
section with respect to the new or surviving corporation as the | 1813 |
person would if the person had served the new or surviving | 1814 |
corporation in the same capacity. | 1815 |
(F) In carrying out the purposes stated in its articles and | 1816 |
subject to limitations prescribed by law or in its articles, a | 1817 |
corporation may do the following: | 1818 |
(1) Purchase or otherwise acquire, lease as lessee, invest | 1819 |
in, hold, use, lease as lessor, encumber, sell, exchange, | 1820 |
transfer, and dispose of property of any description or any | 1821 |
interest in property of any description; | 1822 |
(2) Make contracts; | 1823 |
(3) Form or acquire the control of other domestic or foreign | 1824 |
nonprofit corporations or business corporations; | 1825 |
(4) Be a partner, member, associate, or participant in other | 1826 |
enterprises or ventures, whether profit or nonprofit; | 1827 |
(5) Borrow money, and issue, sell, and pledge its notes, | 1828 |
bonds, and other evidences of indebtedness, and secure any of its | 1829 |
obligations by mortgage, pledge, or deed of trust, of all or any | 1830 |
of its property, and guarantee or secure obligations of any | 1831 |
person; | 1832 |
(6) Become a member of another corporation; | 1833 |
(7) Conduct its affairs in this state and elsewhere; | 1834 |
(8) Resist a change or potential change in control of the | 1835 |
corporation, if the directors, by a majority vote of a quorum, | 1836 |
determine that the change or potential change is opposed to or not | 1837 |
in the best interests of the corporation, upon consideration of | 1838 |
any of the matters set forth in division | 1839 |
of the Revised Code; | 1840 |
(9) Do all things permitted by law and exercise all authority | 1841 |
within the purposes stated in its articles or incidental to those | 1842 |
purposes. | 1843 |
(G) Irrespective of the purposes stated in its articles, but | 1844 |
subject to limitations or prohibitions stated in its articles, a | 1845 |
corporation, in addition to the authority conferred by division | 1846 |
(F) of this section, may invest its funds not currently needed in | 1847 |
carrying out its purposes in any shares or other securities of | 1848 |
another nonprofit corporation or business corporation, or another | 1849 |
business or undertaking. | 1850 |
(H)(1) Notwithstanding any other provision of this section to | 1851 |
the contrary, no corporation that is a "private foundation," as | 1852 |
defined in section 509 of the Internal Revenue Code, shall do the | 1853 |
following: | 1854 |
(a) Engage in any act of "self-dealing," as defined in | 1855 |
section 4941 (d) of the Internal Revenue Code, that would give | 1856 |
rise to any liability for any tax imposed by section 4941 of the | 1857 |
Internal Revenue Code; | 1858 |
(b) Retain any "excess business holdings," as defined in | 1859 |
section 4943 (c) of the Internal Revenue Code, that would give | 1860 |
rise to any liability for any tax imposed by section 4943 of the | 1861 |
Internal Revenue Code; | 1862 |
(c) Make any investment that would jeopardize the carrying | 1863 |
out of any of its exempt purposes, within the meaning of section | 1864 |
4944 of the Internal Revenue Code, so as to give rise to any | 1865 |
liability for any tax imposed by that section; | 1866 |
(d) Make any "taxable expenditures," as defined in section | 1867 |
4945 (d) of the Internal Revenue Code, that would give rise to any | 1868 |
liability for any tax imposed by section 4945 of the Internal | 1869 |
Revenue Code. | 1870 |
(2) Each corporation that is a "private foundation," as | 1871 |
defined in section 509 of the Internal Revenue Code, shall, for | 1872 |
the purposes specified in its articles, distribute at such time | 1873 |
and in such manner, for each taxable year, amounts at least | 1874 |
sufficient to avoid liability for any tax imposed by section 4942 | 1875 |
of the Internal Revenue Code. | 1876 |
(3) Divisions (H)(1) and (2) of this section apply to all | 1877 |
corporations described in them, whether or not contrary to the | 1878 |
provisions of the articles or regulations of such a corporation, | 1879 |
except that divisions (H)(1) and (2) of this section do not apply | 1880 |
to a corporation in existence on September 17, 1971, to the extent | 1881 |
that such corporation provides to the contrary by amendment to its | 1882 |
articles adopted after that date. | 1883 |
(4) Violation of a provision of division (H)(1) or (2) of | 1884 |
this section by a corporation to which the provisions of those | 1885 |
divisions are applicable is not cause for cancellation of its | 1886 |
articles. No director or officer of a corporation to which the | 1887 |
provisions of division (H)(1) or (2) of this section are | 1888 |
applicable is personally liable for a violation of a prohibition | 1889 |
or requirement of those provisions, unless the director or officer | 1890 |
participated in such violation knowing that it was a violation, | 1891 |
and no director or officer is personally liable if such violation | 1892 |
was not willful and was due to reasonable cause, except that this | 1893 |
division does not exonerate a director or officer from any | 1894 |
responsibility or liability to which the director or officer is | 1895 |
subject under any other rule of law, whether or not duplicated in | 1896 |
division (H)(1) or (2) of this section. | 1897 |
(5) Except as provided in division (H)(4) of this section, | 1898 |
nothing in division (H) of this section impairs the rights and | 1899 |
powers of the courts or the attorney general of this state with | 1900 |
respect to any corporation. | 1901 |
(6) As used in division (H) of this section, "Internal | 1902 |
Revenue Code" means the "Internal Revenue Code of 1986," 100 Stat. | 1903 |
2085, 26 U.S.C. 1, as amended. | 1904 |
(I)(1) No lack of, or limitation upon, the authority of a | 1905 |
corporation shall be asserted in any action except as follows: | 1906 |
(a) By the state in an action by it against the corporation; | 1907 |
(b) By or on behalf of the corporation against a director, an | 1908 |
officer, or a member as such; | 1909 |
(c) By a member as such or by or on behalf of the members | 1910 |
against the corporation, a director, an officer, or a member as | 1911 |
such. | 1912 |
(2) Division (I)(1) of this section shall apply to any action | 1913 |
brought in this state upon any contract made in this state by a | 1914 |
foreign corporation. | 1915 |
Sec. 1702.30. (A) Except where the law, the articles, or the | 1916 |
regulations require that action be otherwise authorized or taken, | 1917 |
all of the authority of a corporation shall be exercised by or | 1918 |
under the direction of its directors. For their own government, | 1919 |
the directors may adopt bylaws that are not inconsistent with the | 1920 |
articles or the regulations. | 1921 |
(B) A director shall perform the duties of a director, | 1922 |
including the duties as a member of any committee of the directors | 1923 |
upon which the director may serve, in good faith, in a manner the | 1924 |
director reasonably believes to be in or not opposed to the best | 1925 |
interests of the corporation, and with the care that an ordinarily | 1926 |
prudent person in a like position would use under similar | 1927 |
circumstances. | 1928 |
is acting as a director. | 1929 |
(C) In performing the duties of a director, a director is | 1930 |
entitled to rely on information, opinions, reports, or statements, | 1931 |
including financial statements and other financial data, that are | 1932 |
prepared or presented by the following: | 1933 |
(1) One or more directors, officers, or employees of the | 1934 |
corporation who the director reasonably believes are reliable and | 1935 |
competent in the matters prepared or presented; | 1936 |
(2) Counsel, public accountants, or other persons as to | 1937 |
matters that the director reasonably believes are within the | 1938 |
person's professional or expert competence; | 1939 |
(3) A committee of the directors upon which the director does | 1940 |
not serve, duly established in accordance with a provision of the | 1941 |
articles or the regulations, as to matters within its designated | 1942 |
authority, which committee the director reasonably believes to | 1943 |
merit confidence. | 1944 |
| 1945 |
(1) A director shall not be found to have failed to perform | 1946 |
the director's duties in accordance with that division, unless it | 1947 |
is proved, by clear and convincing evidence, in an action brought | 1948 |
against the director that the director has not acted in good | 1949 |
faith, in a manner the director reasonably believes to be in or | 1950 |
not opposed to the best interests of the corporation, or with the | 1951 |
care that an ordinarily prudent person in a like position would | 1952 |
use under similar circumstances. Such an action includes, but is | 1953 |
not limited to, an action that involves or affects any of the | 1954 |
following: | 1955 |
(a) A change or potential change in control of the | 1956 |
corporation; | 1957 |
(b) A termination or potential termination of the director's | 1958 |
service to the corporation as a director; | 1959 |
(c) The director's service in any other position or | 1960 |
relationship with the corporation. | 1961 |
(2) A director shall not be considered to be acting in good | 1962 |
faith if the director has knowledge concerning the matter in | 1963 |
question that would cause reliance on information, opinions, | 1964 |
reports, or statements that are prepared or presented by the | 1965 |
persons described in divisions | 1966 |
to be unwarranted. | 1967 |
(3) The provisions of this division do not limit relief | 1968 |
available under section 1702.301 of the Revised Code. | 1969 |
| 1970 |
section, a director is liable in damages for any act that the | 1971 |
director takes or fails to take as director only if it is proved, | 1972 |
by clear and convincing evidence, in a court with jurisdiction | 1973 |
that the act or omission of the director was one undertaken with a | 1974 |
deliberate intent to cause injury to the corporation or was one | 1975 |
undertaken with a reckless disregard for the best interests of the | 1976 |
corporation. | 1977 |
(2) Division | 1978 |
liability of a director under section 1702.55 of the Revised Code. | 1979 |
(3) Subject to division | 1980 |
1981 | |
extent that, at the time of an act or omission of a director that | 1982 |
is the subject of complaint, the articles or the regulations of | 1983 |
the corporation state, by specific reference to that division, | 1984 |
that its provisions do not apply to the corporation. | 1985 |
| 1986 |
director reasonably believes to be in or not opposed to the best | 1987 |
interests of the corporation, a director shall consider the | 1988 |
purposes of the corporation and may consider any of the following: | 1989 |
(1) The interests of the employees, suppliers, creditors, and | 1990 |
customers of the corporation; | 1991 |
(2) The economy of this state and of the nation; | 1992 |
(3) Community and societal considerations; | 1993 |
(4) The long-term and short-term best interests of the | 1994 |
corporation, including, but not limited to, the possibility that | 1995 |
those interests may be best served by the continued independence | 1996 |
of the corporation. | 1997 |
| 1998 |
affect the duties of a director who acts in any capacity other | 1999 |
than in the capacity as a director. | 2000 |
Sec. 1705.61. (A) Absent an express agreement to the | 2001 |
contrary, a person providing goods to or performing services for a | 2002 |
limited liability company owes no duty to, incurs no liability or | 2003 |
obligation to, and is not in privity with the members or creditors | 2004 |
of the limited liability company by reason of providing goods to | 2005 |
or performing services for the limited liability company. | 2006 |
(B) Absent an express agreement to the contrary, a person | 2007 |
providing goods to or performing services for a member or group of | 2008 |
members of a limited liability company owes no duty to, incurs no | 2009 |
liability or obligation to, and is not in privity with the limited | 2010 |
liability company, any other members of the limited liability | 2011 |
company, or the creditors of the limited liability company by | 2012 |
reason of providing goods to or performing services for the member | 2013 |
or group of members of the limited liability company. | 2014 |
Section 2. That existing sections 1701.13, 1701.59, 1701.66, | 2015 |
1701.74, 1701.76, 1701.84, 1701.85, 1701.86, 1701.87, 1701.88, | 2016 |
1701.89, 1701.90, 1701.91, 1701.911, 1702.12, 1702.30, and 1705.61 | 2017 |
of the Revised Code are hereby repealed. | 2018 |