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As Reported by the Senate Judiciary Committee
123rd General Assembly
Regular Session
1999-2000 | Am. Sub. H. B. No. 597 |
REPRESENTATIVES WOMER BENJAMIN-CALLENDER-SALERNO-MEAD-CATES-
SENATORS LATTA-FINGERHUT-HERINGTON
A BILL
To amend sections 1701.01, 1702.01, 1702.02, 1702.03, 1702.04, 1702.05,
1702.06, 1702.07, 1702.08, 1702.10, 1702.11, 1702.12, 1702.13, 1702.14,
1702.15, 1702.16, 1702.17, 1702.18, 1702.19, 1702.21, 1702.22,
1702.23, 1702.25, 1702.26, 1702.27, 1702.28, 1702.29, 1702.30,
1702.301, 1702.31, 1702.32, 1702.33, 1702.34, 1702.36, 1702.38,
1702.39, 1702.41, 1702.42, 1702.44, 1702.45, 1702.47, 1702.48,
1702.49, 1702.50, 1702.51, 1702.52, 1702.521, 1702.53, 1702.54,
1702.55, 1702.58, and 1702.59 of the Revised Code to modify the
Nonprofit Corporation Law, including creating two new types of
nonprofit corporate entities; changing references from trustees to
directors; modifying membership rights, notice and voting
provisions, and merger and consolidation provisions; and making related
changes.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 1701.01, 1702.01, 1702.02, 1702.03, 1702.04, 1702.05,
1702.06, 1702.07, 1702.08, 1702.10, 1702.11, 1702.12, 1702.13,
1702.14, 1702.15, 1702.16, 1702.17, 1702.18, 1702.19, 1702.21,
1702.22, 1702.23, 1702.25, 1702.26, 1702.27, 1702.28, 1702.29,
1702.30, 1702.301, 1702.31, 1702.32, 1702.33, 1702.34, 1702.36,
1702.38, 1702.39, 1702.41, 1702.42, 1702.44, 1702.45, 1702.47,
1702.48, 1702.49, 1702.50, 1702.51, 1702.52, 1702.521, 1702.53,
1702.54, 1702.55, 1702.58, and 1702.59 of the Revised Code be amended to read
as
follows:
Sec. 1701.01. As used in sections 1701.01 to 1701.98 of
the Revised Code, unless the context otherwise requires:
(A) "Corporation" or "domestic corporation" means a
corporation for profit formed under the laws of this state.
(B) "Foreign corporation" means a corporation for profit
formed under the laws of another state, and "foreign entity" means an entity
formed under the laws of another state.
(C) "State" means the United States; any state, territory,
insular possession, or other political subdivision of the United
States, including the District of Columbia; any foreign country
or nation; and any province, territory, or other political
subdivision of such foreign country or nation.
(D) "Articles" includes original articles of
incorporation,
certificates of reorganization, amended articles, and amendments
to any of these, and, in the case of a corporation created before
September 1, 1851, the special charter and any amendments to it
made by special act of the general assembly or pursuant to
general law.
(E) "Incorporator" means a person who signed the original
articles of incorporation.
(F) "Shareholder" means a person whose name appears on the
books of the corporation as the owner of shares of such
corporation. Unless the articles, the regulations, or the
contract of subscription otherwise provides, "shareholder"
includes a subscriber to shares, whether the subscription is
received by the incorporators or pursuant to authorization by the
directors, and such shares shall be deemed to be outstanding
shares.
(G) "Person" includes, without limitation, a natural person, a
corporation, whether nonprofit or for profit, a partnership, a limited
liability company, an unincorporated society or association, and two or more
persons having a joint or
common interest.
(H) The location of the "principal office" of a
corporation is the place named as the principal office in its articles.
(I) The "express terms" of shares of a class are the
statements expressed in the articles with respect to such shares.
(J) Shares of a class are "junior" to shares of another
class when any of their dividend or distribution rights are
subordinate to, or dependent or contingent upon, any right of, or
dividend on, or distribution to, shares of such other class.
(K) "Treasury shares" means shares belonging to the
corporation and not retired that have been either issued and
thereafter acquired by the corporation or paid as a dividend or
distribution in shares of the corporation on treasury shares of
the same class; such shares shall be deemed to be issued, but
they shall not be considered as an asset or a liability of the
corporation, or as outstanding for dividend or distribution,
quorum, voting, or other purposes, except, when authorized by the
directors, for dividends or distributions in authorized but
unissued shares of the corporation of the same class.
(L) To "retire" a share means to restore it to the status
of an authorized but unissued share.
(M) "Redemption price of shares" means the amount required
by the articles to be paid on redemption of shares.
(N) "Liquidation price" means the amount or portion of
assets required by the articles to be distributed to the holders
of shares of any class upon dissolution, liquidation, merger, or
consolidation of the corporation, or upon sale of all or
substantially all of its assets.
(O) "Insolvent" means that the corporation is unable to
pay its obligations as they become due in the usual course of its
affairs.
(P) "Parent corporation" or "parent" means a domestic or
foreign corporation that owns and holds of record shares
of
another corporation, domestic or foreign, entitling the holder of
the shares at the time to exercise a majority of the voting power
in the election of the directors of the other corporation without
regard to voting power that may thereafter exist upon a
default,
failure, or other contingency; "subsidiary corporation" or
"subsidiary" means a domestic or foreign corporation of which
another corporation, domestic or foreign, is the parent.
(Q) "Combination" means a transaction, other than a merger
or consolidation, wherein either of the following applies:
(1) Voting shares of a domestic corporation are issued or
transferred in consideration in whole or in part for the transfer
to itself or to one or more of its subsidiaries, domestic or
foreign, of all or substantially all the assets of one or more
corporations, domestic or foreign, with or without good will or
the assumption of liabilities;
(2) Voting shares of a foreign parent corporation are
issued or transferred in consideration in whole or in part for
the transfer of such assets to one or more of its domestic
subsidiaries.
"Transferee corporation" in a combination means the
corporation, domestic or foreign, to which the assets are
transferred, and "transferor corporation" in a combination means
the corporation, domestic or foreign, transferring such assets
and to which, or to the shareholders of which, the voting shares
of the domestic or foreign corporation are issued or transferred.
(R) "Majority share acquisition" means the acquisition of
shares of a corporation, domestic or foreign, entitling the
holder of the shares to exercise a majority of the voting power
in the election of directors of such corporation without regard
to voting power that may thereafter exist upon a default,
failure, or other contingency, by either of the following:
(1) A domestic corporation in consideration in whole or in
part, for the issuance or transfer of its voting shares;
(2) A domestic or foreign subsidiary in consideration in
whole or in part for the issuance or transfer of voting shares of
its domestic parent.
(S) "Acquiring corporation" in a combination means the
domestic corporation whose voting shares are issued or
transferred by it or its subsidiary or subsidiaries to the
transferor corporation or corporations or the shareholders of the
transferor corporation or corporations; and "acquiring
corporation" in a majority share acquisition means the domestic
corporation whose voting shares are issued or transferred by it
or its subsidiary in consideration for shares of a domestic or
foreign corporation entitling the holder of the shares to
exercise a majority of the voting power in the election of
directors of such corporation.
(T) When used in connection with a combination or a
majority share acquisition, "voting shares" means shares of a
corporation, domestic or foreign, entitling the holder of the
shares to vote at the time in the election of directors of such
corporation without regard to voting power which may thereafter
exist upon a default, failure, or other contingency.
(U) "An emergency" exists when the governor, or any other
person lawfully exercising the power and discharging the duties
of the office of governor, proclaims that an attack on the United
States or any nuclear, atomic, or other disaster has caused an
emergency for corporations, and such an emergency shall continue
until terminated by proclamation of the governor or any other
person lawfully exercising the powers and discharging the duties
of the office of governor.
(V) "Constituent corporation" means an existing
corporation merging into or into which is being merged one or
more other entities in a merger or an existing corporation
being consolidated with one or more other entities into a new
entity in a consolidation, whether any of the entities is
domestic or foreign, and "constituent entity" means any entity merging into or
into which is being merged one or more other entities in a merger, or an
existing entity being consolidated with one or more other entities into a new
entity in a consolidation, whether any of the entities is
domestic or foreign.
(W) "Surviving corporation" means the constituent
domestic or foreign corporation that is specified as the
corporation into which one or more other constituent entities
are to be or have been merged, and "surviving entity" means the constituent
domestic or foreign entity that is specified as the entity into which one or
more other constituent entities are to be or have been merged.
(X) "Close corporation agreement" means an agreement that
satisfies the three requirements of division (A) of section
1701.591 of the Revised Code.
(Y) "Issuing public corporation" means a domestic
corporation with fifty or more shareholders that has its
principal place of business, its principal executive offices,
assets having substantial value, or a substantial percentage of
its assets within this state, and as to which no valid close
corporation agreement exists under division (H) of section
1701.591 of the Revised Code.
(Z)(1) "Control share acquisition" means the acquisition,
directly or indirectly, by any person of shares of an issuing
public corporation that, when added to all other shares of the
issuing public corporation in respect of which such person may
exercise or direct the exercise of voting power as provided in
this division, would entitle such person, immediately after such
acquisition, directly or indirectly, alone or with others, to
exercise or direct the exercise of the voting power of the
issuing public corporation in the election of directors within
any of the following ranges of such voting power:
(a) One-fifth or more but less than one-third of such
voting power;
(b) One-third or more but less than a majority of such
voting power;
(c) A majority or more of such voting power.
A bank, broker, nominee, trustee, or other person who
acquires shares in the ordinary course of business for the
benefit of others in good faith and not for the purpose of
circumventing section 1701.831 of the Revised Code shall,
however, be deemed to have voting power only of shares in respect
of which such person would be able, without further instructions
from others, to exercise or direct the exercise of votes on a
proposed control share acquisition at a meeting of shareholders
called under section 1701.831 of the Revised Code.
(2) The acquisition by any person of any shares of an
issuing public corporation does not constitute a control share
acquisition for the purpose of section 1701.831 of the Revised
Code if the acquisition was or is consummated in, results from,
or is the consequence of any of the following circumstances:
(a) Prior to November 19, 1982;
(b) Pursuant to a contract existing prior to November 19,
1982;
(c) By bequest or inheritance, by operation of law upon
the death of an individual, or by any other transfer without
valuable consideration, including a gift, that is made in good
faith and not for the purpose of circumventing section 1701.831
of the Revised Code;
(d) Pursuant to the satisfaction of a pledge or other
security interest created in good faith and not for the purpose
of circumventing section 1701.831 of the Revised Code;
(e) Pursuant to a merger or consolidation adopted, or a
combination or majority share acquisition authorized, by
shareholder vote in compliance with section
1701.78, 1701.781, or 1701.83 of the Revised Code provided the issuing
public corporation is the surviving or new corporation in the
merger or consolidation or is the acquiring corporation in the
combination or majority share acquisition;
(f) The person's being entitled, immediately thereafter,
to exercise or direct the exercise of voting power of the issuing
public corporation in the election of directors within the same
range theretofore attained by that person either in compliance
with the provisions of section 1701.831 of the Revised Code or as
a result solely of the issuing public corporation's purchase of
shares issued by it.
The acquisition by any person of shares of an issuing
public corporation in a manner described under division (Z)(2) of
this section shall be deemed a control share acquisition
authorized pursuant to section 1701.831 of the Revised Code
within the range of voting power under division (Z)(1)(a), (b),
or (c) of this section that such person is entitled to exercise
after such acquisition, provided, in the case of an acquisition in
a manner described under division (Z)(2)(c) or (d) of this
section, the transferor of shares to such person had previously
obtained any authorization of shareholders required under section
1701.831 of the Revised Code in connection with such transferor's
acquisition of shares of the issuing public corporation.
(3) The acquisition of shares of an issuing public
corporation in good faith and not for the purpose of
circumventing section 1701.831 of the Revised Code from any
person whose control share acquisition previously had been
authorized by shareholders in compliance with section 1701.831 of
the Revised Code, or from any person whose previous acquisition
of shares of an issuing public corporation would have constituted
a control share acquisition but for division (Z)(2) or (3) of
this section, does not constitute a control share acquisition for
the purpose of section 1701.831 of the Revised Code unless such
acquisition entitles the person making the acquisition, directly
or indirectly, alone or with others, to exercise or direct the
exercise of voting power of the corporation in the election of
directors in excess of the range of such voting power authorized
pursuant to section 1701.831 of the Revised Code, or deemed to be
so authorized under division (Z)(2) of this section.
(AA) "Acquiring person" means any person who has delivered
an acquiring person statement to an issuing public corporation
pursuant to section 1701.831 of the Revised Code.
(BB) "Acquiring person statement" means a written
statement that complies with division (B) of section 1701.831 of
the Revised Code.
(CC)(1) "Interested shares" means the shares of an issuing
public corporation in respect of which any of the following
persons may exercise or direct the exercise of the voting power
of the corporation in the election of directors:
(a) An acquiring person;
(b) Any officer of the issuing public corporation elected
or appointed by the directors of the issuing public corporation;
(c) Any employee of the issuing public corporation who is
also a director of such corporation;
(d) Any person that acquires such shares for valuable
consideration
during the period beginning with the date of the
first public disclosure of a proposed control share acquisition
of the issuing public corporation or any proposed merger,
consolidation, or other transaction that would result in a
change in control of the corporation or all or substantially all
of its assets, and ending on the record date
established by the directors pursuant to section 1701.45 and division
(D) of section 1701.831 of the Revised Code, if either of the following
applies:
(i) The aggregate consideration paid or given by the
person who acquired the shares, and any other persons acting in
concert with the person, for all such shares exceeds two
hundred fifty thousand dollars;
(ii) The number of shares acquired by the person who
acquired the shares, and any other persons acting in concert with
the person, exceeds one-half of one per cent of the
outstanding shares
of the corporation entitled to vote in the election of directors.
(e) Any person that transfers such shares for valuable
consideration after the record date described in division
(CC)(1)(d) of this section as to shares so
transferred, if accompanied by the voting power in the form of a blank proxy,
an agreement to vote as instructed by the transferee, or otherwise.
(2) If any part of this division is held to be illegal or
invalid in application, the illegality or invalidity does not
affect any legal and valid application thereof or any other
provision or application of this division or section 1701.831 of
the Revised Code that can be given effect without the
invalid or
illegal provision, and the parts and applications of this
division are severable.
(DD) "Certificated security" and "uncertificated security"
have the same meanings as in section 1308.01 of the Revised Code.
(EE) "Entity" means any of the following:
(1) A for profit corporation existing under the laws of this state or any
other state;
(2) Any of the following organizations existing under the laws of this state,
the United States, or any other state:
(a) A business trust or association;
(b) A real estate investment trust;
(c) A common law trust;
(d) An unincorporated business or for profit organization, including a
general or limited partnership;
(e) A limited liability company;
(f) A NONPROFIT CORPORATION.
Sec. 1702.01. As used in this chapter, unless the context
otherwise requires:
(A) "Corporation" or "domestic corporation" means a
nonprofit corporation formed under the laws of this state, or a
BUSINESS corporation for profit formed under the laws of this
state that,
by amendment to its articles as provided by law, becomes a
nonprofit corporation.
(B) "Foreign corporation" means a nonprofit corporation
formed under the laws of another state.
(C) "Nonprofit corporation" means a DOMESTIC OR FOREIGN corporation
that is
not formed OTHERWISE THAN for the pecuniary gain or profit of,
and whose net
earnings or any part of them is not distributable to, its
members, trustees DIRECTORS, officers, or other private persons,
except
that the payment of reasonable compensation for services rendered
and the distribution of assets on dissolution as permitted by
section 1702.49 of the Revised Code is not pecuniary gain or
profit or distribution of net earnings. In a corporation all of
whose members are nonprofit corporations, distribution to members
does not deprive it of the status of a nonprofit corporation.
(D) "Charitable corporation" means a corporation organized
and operated exclusively for religious, charitable, scientific,
testing for public safety, literary, or educational purposes,
exclusively for the prevention of cruelty to children or animals,
or exclusively for a home for the aged, as defined in section
5701.13 of the Revised Code.
(E) "State" means the United States; any state, territory,
insular possession, or other political subdivision of the United
States, including the District of Columbia; any foreign country
or nation; and any province, territory, or other political
subdivision of a foreign country or nation.
(F)(E) "Articles" includes original articles of
incorporation, agreements of merger or consolidation IF AND ONLY TO THE
EXTENT THAT ARTICLES OF INCORPORATION ARE ADOPTED OR AMENDED IN THE
AGREEMENTS, amended
articles, and amendments to any of these, and, in the case of a
corporation created before September 1, 1851, the special charter
and any amendments to it made by special act of the General
Assembly or pursuant to general law.
(G)(F) "Incorporator" means a person who signed the original
articles of incorporation.
(H)(G) "Member" means one having membership rights and
privileges in a corporation in accordance with its articles or
regulations.
(I)(H) "Voting member" means a member possessing voting
rights, either generally or in respect of the particular question
involved, as the case may be.
(J)(I) "Person" includes, but is not limited to, a nonprofit
corporation, a BUSINESS corporation for profit), a partnership,
an unincorporated society or association, and two or more persons
having a joint or common interest.
(J)(K) The location of the "principal office" of a
corporation is the place named as such in its articles.
(L)(K) "Trustees DIRECTORS" means the
persons vested with the authority
to conduct the affairs of the corporation irrespective of the
name, SUCH AS TRUSTEES, by which they are designated.
(M)(L) "Insolvent" means that the corporation is unable to
pay its obligations as they become due in the usual course of its
affairs.
(N)(M)(1) Subject to division (N)(M)(2) of
this section, "volunteer" means a trustee DIRECTOR, officer, or
agent of a nonprofit
corporation, or another person associated with a nonprofit
corporation, who satisfies both of the following:
(a) Performs services for or on behalf of, and under the
authority or auspices of, that corporation;
(b) Does not receive compensation, either directly or
indirectly, for performing those services.
(2) For purposes of division (N)(M)(1) of this section,
"compensation" does not include any of the following:
(a) Actual and necessary expenses that are incurred by a
volunteer in connection with the services performed for a
nonprofit corporation, and that are reimbursed to the volunteer
or otherwise paid;
(b) Insurance premiums paid on behalf of a volunteer, and
amounts paid or reimbursed, pursuant to division (E) of section
1702.12 of the Revised Code;
(c) Modest perquisites.
(N) "BUSINESS CORPORATION" MEANS ANY ENTITY, AS DEFINED IN
SECTION 1701.01 of the Revised Code, OTHER THAN A PUBLIC BENEFIT CORPORATION OR A MUTUAL
BENEFIT CORPORATION, THAT IS ORGANIZED PURSUANT TO CHAPTER 1701.
of the Revised Code.
(O) "MUTUAL BENEFIT CORPORATION" MEANS ANY CORPORATION
ORGANIZED
UNDER THIS CHAPTER OTHER THAN A PUBLIC BENEFIT CORPORATION.
(P) "PUBLIC BENEFIT CORPORATION" MEANS A CORPORATION THAT
IS
RECOGNIZED AS EXEMPT FROM FEDERAL INCOME TAXATION UNDER SECTION
501(c)(3) OF THE "INTERNAL REVENUE
CODE OF 1986," 100 STAT.
2085, 26 U.S.C. 1, AS AMENDED, OR IS ORGANIZED FOR
A PUBLIC OR
CHARITABLE PURPOSE AND THAT UPON DISSOLUTION MUST DISTRIBUTE ITS ASSETS
TO A PUBLIC BENEFIT CORPORATION, THE UNITED STATES, A STATE
OR ANY POLITICAL SUBDIVISION OF A STATE, OR A PERSON THAT IS RECOGNIZED AS
EXEMPT FROM FEDERAL INCOME TAXATION UNDER SECTION
501(c)(3) OF THE
"INTERNAL
REVENUE
CODE OF 1986," AS AMENDED. "PUBLIC BENEFIT CORPORATION" DOES NOT
INCLUDE A NONPROFIT CORPORATION THAT IS ORGANIZED BY ONE OR MORE MUNICIPAL
CORPORATIONS TO FURTHER A PUBLIC PURPOSE THAT IS NOT A CHARITABLE PURPOSE.
Sec. 1702.02. (A) UNLESS ANOTHER FORM OF NOTICE IS REQUIRED BY
THE
ARTICLES,
THE REGULATIONS, THE BYLAWS, OR BY APPLICABLE LAW, ANY NOTICE REQUIRED BY THIS
CHAPTER
SHALL BE IN WRITING AND SHALL BE DELIVERED
PERSONALLY OR SENT BY TELEGRAM, TELECOPY, OR ELECTRONIC MAIL
TRANSMISSION OR BY UNITED STATES MAIL, EXPRESS MAIL, OR
COURIER
SERVICE, WITH POSTAGE OR FEES PREPAID.
(B) In computing the period of time for the giving of a notice
required or permitted under sections 1702.01 to 1702.58, inclusive, of the
Revised Code THIS CHAPTER, or under the articles, the regulations,
or the bylaws of a
corporation, or a resolution of its members or trustees
DIRECTORS, the day on which the
notice is given shall be excluded, and the day when the act for which notice
is given is to be done shall be included, unless the instrument calling for
the notice otherwise provides. If notice is permitted to be given by
PERSONAL DELIVERY OR TRANSMITTED BY TELEGRAM, TELECOPY, OR ELECTRONIC
mail,
the notice shall be deemed to have been given when DELIVERED OR
TRANSMITTED. IF NOTICE IS SENT BY UNITED STATES MAIL,
EXPRESS MAIL, OR COURIER SERVICE, THE NOTICE SHALL BE DEEMED TO HAVE BEEN
GIVEN WHEN deposited in the mail OR WITH THE COURIER SERVICE.
(C) A WRITTEN NOTICE OR REPORT DELIVERED AS PART OF A
NEWSLETTER,
MAGAZINE, OR OTHER PUBLICATION REGULARLY SENT TO MEMBERS SHALL
CONSTITUTE A WRITTEN NOTICE OR REPORT IF ADDRESSED OR DELIVERED TO
THE MEMBER'S ADDRESS SHOWN IN THE CORPORATION'S CURRENT LIST OF
MEMBERS, OR, IN THE CASE OF MEMBERS WHO ARE RESIDENTS OF THE SAME
HOUSEHOLD AND WHO HAVE THE SAME ADDRESS IN THE CORPORATION'S
CURRENT LIST OF MEMBERS, IF ADDRESSED OR DELIVERED TO ONE OF SUCH
MEMBERS AT THE ADDRESS APPEARING ON THE CORPORATION'S CURRENT LIST
OF MEMBERS.
Sec. 1702.03. A corporation may be formed UNDER THIS CHAPTER for any
purpose or purposes for
which natural persons lawfully may associate themselves, provided
EXCEPT that when
there is a special provision in the Revised Code for the formation thereunder
of a designated class of corporations, a corporation of such class shall be
formed thereunder.
Sec. 1702.04. (A) Any person, singly or jointly with
others, and without regard to residence, domicile, or state of
incorporation, may form a corporation by signing and filing with
the secretary of state articles of incorporation, which shall set
forth the following:
(1) The name of the corporation;
(2) The place in this state where the principal office of
the corporation is to be located;
(3) The purpose or purposes for which the corporation is
formed;
(4) The names and addresses of not less than three natural
persons who are to be initial trustees.
(B) The articles also may set forth the following:
(1) THE NAMES OF INDIVIDUALS WHO ARE TO SERVE AS THE INITIAL DIRECTORS;
(2) The names of any persons or the designation of any
group of persons who are to be the initial members;
(2)(3) Any qualification of membership and the classification
of members;
(3)(4) A provision to the effect that the corporation shall
be subordinate to and subject to the authority of any head or
national association, lodge, order, beneficial association,
fraternal or beneficial society, foundation, federation, or any
other nonprofit corporation, society, organization, or
association;
(4)(5) Any lawful provision for the purpose of defining,
limiting, or regulating the exercise of the authority of the
corporation, the incorporators, the trustees DIRECTORS, the
officers, the
members, or any class of members, or creating or defining rights
and privileges of the members among themselves or in the property
of the corporation, or governing the distribution of assets on
dissolution;
(5)(6) Any provision which THAT may be set
forth in the
regulations;
(6)(7) A provision specifying the period of existence of the
corporation if it is to be otherwise than perpetual;
(7)(8) Any additional provision permitted by this chapter.
(C) A written appointment of a statutory agent for the
purposes set forth in section 1702.06 of the Revised Code shall
be filed with the articles, unless the corporation belongs to one
of the classes mentioned in division (N) of that section.
(D) The legal existence of the corporation shall begin
upon the filing of the articles, and, unless the articles
otherwise provide, its period of existence shall be perpetual.
Sec. 1702.05. (A) Except as provided in this section and
in sections 1702.41 and 1702.45 of the Revised Code, the
secretary of state shall not accept for filing in the secretary
of state's office any
articles if the corporate name set forth in the articles is
not distinguishable upon the secretary of state's records from
any of the following:
(1) The name of any other corporation, whether A nonprofit
CORPORATION or for profit A BUSINESS CORPORATION and
whether that of a domestic or of a foreign corporation
authorized to do business in this state;
(2) The name of any limited liability company registered in the office of
the secretary of state pursuant to Chapter 1705. of the Revised Code, whether
domestic or foreign;
(3) The name of any limited liability partnership
registered in the office of the secretary of state pursuant to
Chapter 1775. of the
Revised Code, whether domestic or
foreign;
(4) The name of any limited partnership registered in the
office of the secretary of state pursuant to
Chapter 1782. of the
Revised Code, whether domestic or
foreign;
(5) Any trade name,
the exclusive right to which is at the time in question
registered in the office of the secretary of state pursuant to
Chapter 1329. of the Revised Code.
(B) The secretary of state shall determine for purposes of
this section whether a name is "distinguishable" from another
name upon the secretary of state's records. Without
excluding other names that may
not constitute distinguishable names in this state, a name is not
considered distinguishable from another name for purposes of this
section solely because it differs from the other name in only one
or more of the following manners:
(1) The use of the word "corporation," "company,"
"incorporated," "limited," or any abbreviation of any of
those
words;
(2) The use of any article, conjunction, contraction,
abbreviation, or punctuation;
(3) The use of a different tense or number of the same
word.
(C) A corporation may apply to the secretary of state for
authorization to use a name that is not distinguishable upon the
secretary of state's records from the name of any other
corporation, any limited liability company, limited liability
partnership, or limited partnership, or from a registered
trade name, if there also is
filed in the office of the secretary of state, on a form prescribed
by the secretary of state, the consent of the
other entity, or, in the case of a registered
trade name, the
person in whose name is registered the exclusive right
to use the name, which consent is evidenced in a writing signed by any
authorized officer or authorized
representative of the other entity or person.
(D) In case of judicial sale or judicial transfer, by sale
or transfer of good will or otherwise, of the right to use the
name of a nonprofit corporation or BUSINESS corporation for
profit,
whether that of a domestic corporation or of a foreign
corporation authorized to exercise its corporate privileges in
this state or to do business in this state, the secretary of
state, at the instance of the purchaser or transferee of such
right, shall accept for filing articles of a corporation with a
name the same as or similar to the name of such other
corporation, if there also is filed in the office of the
secretary of state a certified copy of the decree or order of
court confirming or otherwise evidencing the purchase or
transfer.
(E) Any person who wishes to reserve a name for a proposed
new corporation, or any corporation intending to change its name,
may submit to the secretary of state a written application, on a
form prescribed by the secretary of state, for the exclusive right
to use a specified name as the name of a
corporation. If the secretary of state finds that, under this
section, the specified name is available for such use, the
secretary of state shall
file such application, and, from
the date of such filing, such applicant shall have
the
exclusive right for sixty days to use the specified name as the
name of a corporation, counting the date of such
filing as
the first of the sixty days. The right so obtained may be
transferred by the applicant or other holder of the right by the
filing in the office of the secretary of state of a written
transfer, on a form prescribed by the secretary of state,
stating
the name and address of the transferee.
(F) For filing under this section any application or other
document, other than articles or a consent to the use of a name,
the secretary of state shall charge and collect a fee of five
dollars.
Sec. 1702.06. (A) Every corporation shall have and
maintain an agent, sometimes referred to as the "statutory
agent," upon whom any process, notice, or demand required or
permitted by statute to be served upon a corporation may be
served. The agent may be a natural person who is a resident of
this state, or may be a domestic OR FOREIGN BUSINESS corporation for
profit or a
foreign corporation for profit holding a license as such under
the laws of this state that is authorized by its articles
of incorporation to act as such agent, and that has a
business address in this state.
(B) The secretary of state shall not accept original
articles for filing unless there is filed with the articles a
written appointment of an agent signed by the incorporators of
the corporation or a majority of them and a written acceptance of
the appointment signed by the agent. In all other cases, the
corporation shall appoint the agent and shall file in the office
of the secretary of state a written appointment of the agent that
is signed by any authorized officer of the corporation and a
written acceptance of the appointment that is either the original
acceptance signed by the agent or a photocopy, facsimile,
or similar reproduction of the original acceptance signed by the
agent.
(C) The written appointment of an agent shall set forth
the name and address in this state of the agent, including the
street and number or other particular description, and shall
otherwise be in such form as the secretary of state prescribes. The secretary
of state shall keep a record of the names of
corporations and the names and addresses of their respective
agents.
(D) If any agent dies, removes from the state, or resigns,
the corporation shall forthwith appoint another agent and file
with the secretary of state, on a form prescribed by the secretary
of state, a written appointment of such THAT agent.
(E) If the agent changes the agent's address from that
appearing upon the record in the office of the secretary of
state, the corporation or the agent shall forthwith file with the
secretary of
state, on a form prescribed by the secretary of state, a
written statement setting forth the new address.
(F) An agent may resign by filing with the secretary of
state, on a form prescribed by the secretary of state, a
written notice to that effect that is signed by the agent
and by sending a copy of the notice to the corporation at the
current or last known address of its principal office on or prior
to the date that notice is filed with the secretary of state.
The notice shall set forth the name of the corporation, the name
and current address of the agent, the current or last known
address, including the street and number or other particular
description, of the corporation's principal office, the
resignation of the agent, and a statement that a copy of the
notice has been sent to the corporation within the time and in
the manner prescribed by this division. Upon the expiration of
sixty days after such filing, the authority of the agent shall
terminate.
(G) A corporation may revoke the appointment of an agent
by filing with the secretary of state, on a form prescribed by the
secretary of state, a written appointment of
another agent and a statement that the appointment of the former
agent is revoked.
(H) Any process, notice, or demand required or permitted
by statute to be served upon a corporation may be served upon the
corporation by delivering a copy of it to its agent, if a natural
person, or by delivering a copy of it at the address of its agent
in this state, as such address appears upon the record in the
office of the secretary of state. If (1) the agent cannot be
found, or (2) the agent no longer has that address, or (3) the
corporation has failed to maintain an agent as required by this
section, and if in any such case the party desiring that such
process, notice, or demand be served, or the agent or
representative of the party, shall have filed with the secretary
of state an affidavit stating that one of the foregoing
conditions exists and stating the most recent address of the
corporation which THAT the party after diligent search has been
able
to ascertain, then service of process, notice, or demand upon the
secretary of state, as the agent of the corporation, may be
initiated by delivering to the secretary of state or at
the secretary of state's office triplicate copies
of such process, notice, or demand and by paying to the
secretary of state a fee of
five dollars. The secretary of state shall forthwith give notice
of such delivery to the corporation at its principal office as
shown upon the record in the secretary of state's office and
also to the corporation
at any different address set forth in the above mentioned
affidavit, and shall forward to the corporation at each of said
THOSE
addresses, by certified mail, with request for return receipt, a
copy of such process, notice, or demand; and thereupon service
upon the corporation shall be deemed to have been made.
(I) The secretary of state shall keep a record of each
process, notice, and demand delivered to the secretary of
state or at the secretary of state's office
under this section or any other law of this state which THAT
authorizes service upon the secretary of state, and shall
record the time of such
delivery and the secretary of state's action thereafter with
respect thereto.
(J) This section does not limit or affect the right to
serve any process, notice, or demand upon a corporation in any
other manner permitted by law.
(K) Except when an original appointment of an agent is
filed with the original articles, a written appointment of an
agent or a written statement filed by a corporation with the
secretary of state shall be signed by any authorized officer of
the corporation or by the incorporators of the corporation or a
majority of them if no trustees DIRECTORS have been elected.
(L) For filing a written appointment of an agent other
than one filed with original articles, and for filing a statement
of change of address of an agent, the secretary of state shall
charge and collect a fee of three dollars.
(M) Upon the failure of any corporation to appoint another
agent or to file a statement of change of address of an agent,
the secretary of state shall give notice thereof by certified
mail to the corporation at the address set forth in the notice of
registration RESIGNATION or on the most recent statement of
continued
existence filed in this state by the corporation. Unless the
failure is cured within thirty days after the mailing by the
secretary of state of the notice or within any further period the
secretary of state grants, upon the expiration of that period
from the date of the mailing, the articles of the corporation
shall be canceled without further notice or action by the
secretary of state. The secretary of state shall make a notation
of the cancellation on the secretary of state's records. A
corporation whose articles
have been canceled may be reinstated by filing, on a form prescribed
by the secretary of state, an application for
reinstatement and the required appointment of agent or required
statement, and by paying a filing fee of ten dollars. The rights, privileges,
and franchises of a corporation whose articles have been reinstated are
subject to section 1702.60 of the Revised Code. The
secretary of state shall furnish the tax commissioner a monthly
list of all corporations canceled and reinstated under this
division.
(N) This section does not apply to banks, trust companies,
insurance companies, or any corporation defined under the laws of
this state as a public utility for taxation purposes.
Sec. 1702.07. (A) When articles of incorporation and other certificates
relating to the corporation are submitted to the
secretary of state,
the secretary of state shall,
after finding that they comply with the provisions
of sections 1702.01 to
1702.58 of the Revised Code THIS CHAPTER, accept the articles and
other
certificates for filing and make a copy of the articles and other
certificates by
microfilm or by any authorized photostatic or digitized process.
Evidence of the
filing shall be returned to the person filing
the articles or certificate.
(B) All persons shall have the opportunity of acquiring knowledge of the
contents of the articles and other certificates filed and recorded in the
office of the secretary of state, but no person dealing with the corporation
shall be charged with constructive notice of the contents of any such articles
or certificates by reason of such filing or recording.
Sec. 1702.08. (A) When an unincorporated society or association, organized
for any of the purposes for which a corporation could be formed under
sections
1702.01 to 1702.58, inclusive, of the Revised Code THIS CHAPTER,
authorizes the
incorporation of such society or association, by the same procedure and
affirmative vote of its voting members as the regulations, constitution, or
other fundamental agreement of such society or association requires for an
amendment to such fundamental agreement or, if no such vote is specified, by a
majority vote of the voting members present IN PERSON OR, IF PERMITTED, BY
MAIL OR BY PROXY, at a duly convened meeting the
purpose of which is stated in the notice of the meeting, then upon the filing
of the articles under section 1702.04 of the Revised Code setting forth such
facts and that such required vote has been obtained, such society or
association shall become a corporation and the members of such society or
association shall become members of such corporation in accordance with
provisions in the articles to that effect.
(B) All the rights, privileges, immunities, powers, franchises, and
authority,
and all the property and obligations of such unincorporated society or
association shall thereupon pass to, vest in, and (in the case of liabilities
and obligations) be obligations of the corporation so formed.
Sec. 1702.10. After the articles have been filed and at any time prior to a
meeting of voting members, the incorporators or a majority of them, at a
meeting, may adopt regulations for the government of the corporation, the
conduct of its affairs, and the management of its property, consistent with
law and the articles; may elect trustees DIRECTORS in addition
to those ANY DIRECTORS named in the
articles; and may also elect members in addition to any named or provided for
in the articles. If the incorporators fail to adopt regulations as
herein
authorized BY THIS SECTION WITHIN NINETY DAYS AFTER THE DATE OF
INCORPORATION, regulations may be adopted at a meeting of voting members
by the affirmative vote of a majority of the voting members.
Sec. 1702.11. (A) Without limiting the generality of such
authority, the regulations, whether designated a constitution or
rules, or by some other term, may include provisions with respect
to the following:
(1) The time and place for holding, the manner of and
authority for calling, giving notice of, and conducting, and the
requirements of a quorum for, meetings of members, or their
elected representatives or delegates;
(2) The qualifications, admission, voluntary withdrawal,
censure, and suspension of members, and the termination of
membership;
(3) The fees and dues of members;
(4) The rights of members, or classes of members, or of
their elected representatives or delegates, to vote; the manner
of conducting votes of members on matters, INCLUDING ANY RIGHT TO
VOTE BY MAIL OR BY PROXY; the specification of
their THE relative rights and privileges among themselves
MEMBERS and in the
property of the corporation; and, in the case of charitable
corporations, limitations upon or regulations governing their
THE
right OF MEMBERS to examine the books and records of the corporation;
(5) The election of representatives or delegates OF MEMBERS and their
authority, rights, and privileges;
(6) The number, classification, manner of fixing or
changing the number, qualifications, term of office, voting
rights, compensation or manner of fixing compensation, and the
removal of trustees DIRECTORS;
(7) The time and place for holding, the manner of and
authority for calling, giving notice of, and conducting, and the
requirements of a quorum for, meetings of the trustees
DIRECTORS;
(8) The appointment of an executive and other committees
of the trustees DIRECTORS or of members, and their
authority, AND THE METHOD BY WHICH THEY TAKE ACTION;
(9) The titles, qualifications, duties, term of office,
compensation or manner of fixing compensation, and the removal,
of officers;
(10) Defining, limiting, or regulating the exercise of the
authority of the corporation, the trustees DIRECTORS, the
officers, the
members, or any class of members;
(11) The method by which voting members may change the
regulations.
(B) In the absence of provisions in the articles or the
regulations with respect to the method of changing the
regulations, the regulations may be amended, or new regulations
may be adopted, by the voting members at a meeting held for such
purpose, by the affirmative vote of a majority of the voting
members present IN PERSON OR, IF PERMITTED, BY MAIL OR BY PROXY, if a
quorum is present.
(C) The members of a nonprofit corporation may adopt or
authorize the trustees DIRECTORS to adopt, either before or
during an
emergency, as defined in division (U) of section 1701.01 of the
Revised Code, emergency regulations operative only during an
emergency. The emergency regulations may include such provisions
as are authorized to be included in regulations by divisions (A)
and (B) of this section. In addition, unless expressly
prohibited by the articles or regulations, and notwithstanding
any different provisions in this chapter and any different
provision in the articles or regulations which THAT are not
expressly
stated to be operative during an emergency, the emergency
regulations may make any provision that may be practical or
necessary with respect to meetings, committees, vacancies, and
temporary appointments of the trustees DIRECTORS, and the rank
and
succession of officers, the same as may be done by corporations
for profit under division (C) of section 1701.11 of the Revised
Code, reading "directors" as "trustees" where the context so
requires.
(D) Any change in the regulations made in accordance with
their provisions or pursuant to division (B) of this section
shall be binding on all members.
(E) If, pursuant to the regulations, such regulations are
amended or new regulations adopted without a meeting of the
voting members, the secretary of the corporation shall mail a
copy of the amendment or the new regulations to each voting
member who would have been entitled to vote on the amendment or
new regulations and did not participate in the adoption of the
amendment or new regulations.
(F) No person dealing with the corporation shall be
charged with constructive notice of the regulations.
(G) Unless expressly prohibited by the articles or
regulations, or unless otherwise provided by the emergency
regulations, and notwithstanding any different provision in this
chapter, the special rules provided for corporations for profit
under division (F) of section 1701.11 of the Revised Code are
applicable to a nonprofit corporation during an emergency, as
defined in division (U) of section 1701.01 of the Revised Code,
reading "directors" as "trustees" where the context so requires.
Sec. 1702.12. (A) A corporation may sue and be sued.
(B) A corporation may adopt and alter a corporate seal and
use it or a facsimile of it, but failure to affix the corporate
seal shall not affect the validity of any instrument.
(C) Unless otherwise provided in the articles, a
corporation may take property of any description, or any interest
in property, by gift, devise, or bequest.
(D) Subject to limitations prescribed by law or in its
articles, a corporation may make donations for the public
welfare, for religious, charitable, scientific, literary, or
educational purposes, or in furtherance of any of its purposes.
(E)(1) A corporation may indemnify or agree to indemnify
any person who was or is a party, or is threatened to be made a
party, to any threatened, pending, or completed civil, criminal,
administrative, or investigative action, suit, or proceeding,
other than an action by or in the right of the corporation, by
reason of the fact that he THE PERSON is or was a trustee
DIRECTOR,
officer,
employee, or agent of or a volunteer of the corporation, or is or
was serving at the request of the corporation as a trustee,
director, officer, employee, member, manager, or agent of or a volunteer of
another domestic or foreign nonprofit corporation or BUSINESS
corporation
for profit, a limited liability company, or a partnership, joint
venture,
trust, or other
enterprise, against expenses, including attorney's fees,
judgments, fines, and amounts paid in settlement actually and
reasonably incurred by him THE PERSON in connection with such
action, suit,
or proceeding, if he THE PERSON acted in good faith and in a
manner he THE PERSON
reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or
proceeding, if he THE PERSON had no reasonable cause to believe
his THE PERSON'S conduct
was unlawful. The termination of any action, suit, or proceeding
by judgment, order, settlement, or conviction, or upon a plea of
nolo contendere or its equivalent, shall not create, of itself, a
presumption that the person did not act in good faith and in a
manner he THE PERSON reasonably believed to be in or not opposed
to the best
interests of the corporation, and, with respect to any criminal
action or proceeding, a presumption that the person had
reasonable cause to believe that his THE PERSON'S conduct was
unlawful.
(2) A corporation may indemnify or agree to indemnify any
person who was or is a party, or is threatened to be made a
party, to any threatened, pending, or completed action or suit by
or in the right of the corporation to procure a judgment in its
favor, by reason of the fact that he THE PERSON is or was a
trustee DIRECTOR,
officer, employee, or agent of or a volunteer of the corporation,
or is or was serving at the request of the corporation as a
trustee, director, officer, employee, member, manager, or agent of or a
volunteer
of another domestic or foreign nonprofit corporation or
BUSINESS corporation for profit, a limited liability company, or
a partnership, joint
venture, trust,
or other enterprise against expenses, including attorney's fees,
actually and reasonably incurred by him THE PERSON in connection
with the
defense or settlement of such action or suit, if he THE PERSON
acted in good
faith and in a manner he THE PERSON reasonably believed to be in
or not
opposed to the best interests of the corporation, except that no
indemnification shall be made in respect of any of the following:
(a) Any claim, issue, or matter as to which such THE person is
adjudged to be liable for negligence or misconduct in the
performance of his THE PERSON'S duty to the corporation unless,
and only to
the extent that, the court of common pleas or the court in which
the action or suit was brought determines, upon application,
that, despite the adjudication of liability but in view of all
the circumstances of the case, such THE person is fairly and
reasonably entitled to indemnity for such expenses as the court
of common pleas or such other court considers proper;
(b) Any action or suit in which liability is asserted
against a trustee DIRECTOR and that liability is asserted only
pursuant to
section 1702.55 of the Revised Code.
(3) To the extent that a trustee, director, officer,
employee, member, manager, agent, or volunteer has been successful on the
merits
or otherwise in defense of any action, suit, or proceeding
referred to in division (E)(1) or (2) of this section, or in
defense of any claim, issue, or matter in such an action, suit,
or proceeding, he THE PERSON shall be indemnified against
expenses,
including attorney's fees, actually and reasonably incurred by
him THE PERSON in connection with that action, suit, or
proceeding.
(4) Unless ordered by a court and subject to division
(E)(3) of this section, any indemnification under division (E)(1)
or (2) of this section shall be made by the corporation only as
authorized in the specific case, upon a determination that
indemnification of the trustee, director, officer, employee,
member, manager, agent, or volunteer is proper in the circumstances because
he THE PERSON has
met the applicable standard of conduct set forth in division
(E)(1) or (2) of this section. Such determination shall be made
in any of the following manners:
(a) By a majority vote of a quorum consisting of trustees
DIRECTORS
of the indemnifying corporation who were not and are not parties
to or threatened with the action, suit, or proceeding referred to
in division (E)(1) or (2) of this section;
(b) Whether or not a quorum as described in division
(E)(4)(a) of this section is obtainable, and if a majority of a
quorum of disinterested trustees DIRECTORS so directs, in a
written opinion
by independent legal counsel other than an attorney, or a firm
having associated with it an attorney, who has been retained by
or who has performed services for the corporation or any person
to be indemnified within the past five years;
(c) By the members;
(d) By the court of common pleas or the court in which the
action, suit, or proceeding referred to in division (E)(1) or (2)
of this section was brought.
If an action or suit by or in the right of the corporation
is involved, any determination made by the disinterested trustees
DIRECTORS
under division (E)(4)(a) of this section or by independent legal
counsel under division (E)(4)(b) of this section shall be
communicated promptly to the person who threatened or brought the
action or suit under division (E)(2) of this section, and, within
ten days after receipt of such notification, such person shall
have the right to petition the court of common pleas or the court
in which such action or suit was brought to review the
reasonableness of such determination.
(5)(a)(i) Unless, at the time of a trustee's DIRECTOR'S or
volunteer's act or omission that is the subject of an action,
suit, or proceeding referred to in division (E)(1) or (2) of this
section, the articles or regulations of the corporation state, by
specific reference to this division, that its provisions do not
apply to the corporation, or unless the only liability asserted
against a trustee DIRECTOR in an action, suit, or proceeding
referred to
in division (E)(1) or (2) of this section is pursuant to section
1702.55 of the Revised Code, or unless division (E)(5)(a)(ii) of
this section applies, the expenses incurred by the trustee
DIRECTOR or
volunteer in defending the action, suit, or proceeding, including
attorney's fees, shall be paid by the corporation. Upon the
request of the trustee DIRECTOR or volunteer and in accordance
with
division (E)(5)(b) of this section, those expenses shall be paid
as they are incurred, in advance of the final disposition of the
action, suit, or proceeding.
(ii) Notwithstanding division (E)(5)(a)(i) of this
section, the expenses incurred by a trustee DIRECTOR or
volunteer in
defending an action, suit, or proceeding referred to in division
(E)(1) or (2) of this section, including attorney's fees, shall
not be paid by the corporation upon the final disposition of the
action, suit, or proceeding, or, if paid in advance of the final
disposition of the action, suit, or proceeding, shall be repaid
to the corporation by the trustee DIRECTOR or volunteer, if it
is proved,
by clear and convincing evidence, in a court with jurisdiction
that the act or omission of the trustee DIRECTOR or volunteer
was one
undertaken with a deliberate intent to cause injury to the
corporation or was one undertaken with a reckless disregard for
the best interests of the corporation.
(b) Expenses, including attorney's fees, incurred by a
trustee, director, officer, employee, member, manager, agent, or
volunteer in
defending any action, suit, or proceeding referred to in division
(E)(1) or (2) of this section may be paid by the corporation as
they are incurred, in advance of the final disposition of the
action, suit, or proceeding, as authorized by the trustees
DIRECTORS in the
specific case, upon receipt of an undertaking by or on behalf of
the trustee, director, officer, employee, member, manager, agent, or
volunteer
to repay the amount if it ultimately is determined that he THE
PERSON is not
entitled to be indemnified by the corporation.
(6) The indemnification authorized by this section is not
exclusive of, and shall be in addition to, any other rights
granted to those seeking indemnification, pursuant to the
articles, the regulations, any agreement, a vote of members or
disinterested trustees DIRECTORS, or otherwise, both as to
action in their
official capacities and as to action in another capacity while
holding their offices or positions, and shall continue as to a
person who has ceased to be a trustee, director, officer,
employee, member, manager, agent, or volunteer and shall inure to the benefit
of
the heirs, executors, and administrators of such a person.
(7) A corporation may purchase and maintain insurance, or
furnish similar protection, including, but not limited to, trust
funds, letters of credit, or self-insurance, for or on behalf of
any person who is or was a trustee DIRECTOR, officer, employee,
agent, or
volunteer of the corporation, or is or was serving at the request
of the corporation as a trustee, director, officer, employee,
member, manager, agent, or volunteer of another domestic or foreign nonprofit
corporation or BUSINESS corporation for profit, a limited
liability company, or a
partnership, joint
venture, trust, or other enterprise, against any liability
asserted against him THE PERSON and incurred by him
THE PERSON in any such capacity, or
arising out of his THE PERSON'S status as such, whether or not
the corporation
would have the power to indemnify him THE PERSON against that
liability
under this section. Insurance may be so purchased from or so
maintained with a person in which the corporation has a financial
interest.
(8) The authority of a corporation to indemnify persons
pursuant to division (E)(1) or (2) of this section does not limit
the payment of expenses as they are incurred, in advance of the
final disposition of an action, suit, or proceeding, pursuant to
division (E)(5) of this section or the payment of
indemnification, insurance, or other protection that may be
provided pursuant to division (E)(6) or (7) of this section.
Divisions (E)(1) and (2) of this section do not create
any obligation to repay or return payments made by a corporation
pursuant to division (E)(5), (6), or (7) of this section.
(9) As used in division (E) of this section, "corporation"
includes all constituent corporations in a consolidation or
merger, and the new or surviving corporation, so that any person
who is or was a trustee DIRECTOR, officer, employee, agent, or
volunteer
of a constituent corporation or is or was serving at the request
of a constituent corporation as a trustee, director, officer,
employee, member, manager, agent, or volunteer of another domestic or foreign
nonprofit corporation or BUSINESS corporation for profit, a
limited liability company,
or a
partnership, joint venture, trust, or other enterprise, shall
stand in the same position under this section with respect to the
new or surviving corporation as he THE PERSON would if he
THE PERSON had served the new
or surviving corporation in the same capacity.
(F) In carrying out the purposes stated in its articles
and subject to limitations prescribed by law or in its articles,
a corporation may do the following:
(1) Purchase or otherwise acquire, lease as lessee, invest
in, hold, use, lease as lessor, encumber, sell, exchange,
transfer, and dispose of property of any description or any
interest in property of any description;
(2) Make contracts;
(3) Form or acquire the control of other domestic or
foreign nonprofit corporations or BUSINESS corporations for
profit;
(4) Be a partner, member, associate, or participant in
other enterprises or ventures, whether profit or nonprofit;
(5) Borrow money, and issue, sell, and pledge its notes,
bonds, and other evidences of indebtedness, and secure any of its
obligations by mortgage, pledge, or deed of trust, of all or any
of its property, and guarantee or secure obligations of any
person;
(6) Become a member of another corporation;
(7) Conduct its affairs in this state and elsewhere;
(8) Resist a change or potential change in control of the
corporation, if the trustees DIRECTORS, by a majority vote of a
quorum,
determine that the change or potential change is opposed to or
not in the best interests of the corporation, upon consideration
of any of the matters set forth in division (E) of section
1702.30 of the Revised Code;
(9) Do all things permitted by law and exercise all
authority within the purposes stated in its articles or
incidental to those purposes.
(G) Irrespective of the purposes stated in its articles,
but subject to limitations or prohibitions stated in its
articles, a corporation, in addition to the authority conferred
by division (F) of this section, may invest its funds not
currently needed in carrying out its purposes in any shares or
other securities of another nonprofit corporation or BUSINESS
corporation
for profit, or another business or undertaking.
(H)(1) Notwithstanding any other provision of this section
to the contrary, no corporation that is a "private foundation,"
as defined in section 509 of the Internal Revenue Code, shall do
the following:
(a) Engage in any act of "self-dealing," as defined in
section 4941 (d) of the Internal Revenue Code, that would give
rise to any liability for any tax imposed by section 4941 of the
Internal Revenue Code;
(b) Retain any "excess business holdings," as defined in
section 4943 (c) of the Internal Revenue Code, that would give
rise to any liability for any tax imposed by section 4943 of the
Internal Revenue Code;
(c) Make any investment that would jeopardize the carrying
out of any of its exempt purposes, within the meaning of section
4944 of the Internal Revenue Code, so as to give rise to any
liability for any tax imposed by that section;
(d) Make any "taxable expenditures," as defined in section
4945 (d) of the Internal Revenue Code, that would give rise to
any liability for any tax imposed by section 4945 of the Internal
Revenue Code.
(2) Each corporation that is a "private foundation," as
defined in section 509 of the Internal Revenue Code, shall, for
the purposes specified in its articles, distribute at such time
and in such manner, for each taxable year, amounts at least
sufficient to avoid liability for any tax imposed by section 4942
of the Internal Revenue Code.
(3) Divisions (H)(1) and (2) of this section apply to all
corporations described in them, whether or not contrary to the
provisions of the articles or regulations of such a corporation,
except that divisions (H)(1) and (2) of this section do not apply
to a corporation in existence on September 17, 1971, to the
extent that such corporation provides to the contrary by
amendment to its articles adopted after that date.
(4) Violation of a provision of division (H)(1) or (2) of
this section by a corporation to which the provisions of those
divisions are applicable is not cause for cancellation of its
articles. No trustee DIRECTOR or officer of a corporation to
which the
provisions of division (H)(1) or (2) of this section are
applicable is personally liable for a violation of a prohibition
or requirement of those provisions, unless he THE DIRECTOR OR
OFFICER participated in
such violation knowing that it was a violation, and no such
trustee DIRECTOR or officer is personally liable if such violation
was not
willful and was due to reasonable cause, except that this
division does not exonerate a trustee DIRECTOR or officer from
any
responsibility or liability to which he THE DIRECTOR OR OFFICER
is subject under any
other rule of law, whether or not duplicated in division (H)(1)
or (2) of this section.
(5) Except as provided in division (H)(4) of this section,
nothing in division (H) of this section impairs the rights and
powers of the courts or the attorney general of this state with
respect to any corporation.
(6) As used in division (H) of this section, "Internal
Revenue Code" means the "Internal Revenue Code of 1986," 100
Stat. 2085, 26 U.S.C. 1, as amended.
(I)(1) No lack of, or limitation upon, the authority of a
corporation shall be asserted in any action except as follows:
(a) By the state in an action by it against the
corporation;
(b) By or on behalf of the corporation against a trustee
DIRECTOR,
an officer, or a member as such;
(c) By a member as such or by or on behalf of the members
against the corporation, a trustee DIRECTOR, an officer, or a
member as
such.
(2) Division (I)(1) of this section shall apply to any
action brought in this state upon any contract made in this state
by a foreign corporation.
Sec. 1702.13. (A) The corporation shall keep a membership
book MAINTAIN A RECORD OF ITS MEMBERS containing the name and
address of each member, the date of
his admission to membership, and, if members are classified, the
class to which he THE MEMBER belongs.
(B) A corporation may issue certificates evidencing
membership in it, but a corporation incorporated on or after June
9, 1927, shall not issue certificates for shares.
(C) Membership in a corporation may be terminated in the
manner provided by law, the articles, or the regulations, and
upon the termination of membership for any cause, such fact and
the date of termination shall be recorded in the CORPORATION'S
membership book RECORDS.
(D) Unless the articles or the regulations otherwise
provide, all the rights and privileges of a member in the
corporation and its property shall cease on termination of his
membership.
(E) If permitted by the articles or the regulations of a
corporation, another nonprofit corporation or, A BUSINESS
corporation for
profit, A LIMITED LIABILITY COMPANY, or a ANY
partnership, may become a member of the first
mentioned corporation.
(F) Whenever the number of members of a corporation that,
under the law, the articles, or the regulations, must have a
specified number of members, is reduced below the specified
number, the corporation shall not be required because of that
reduction to cease carrying on its activities, but the continuing
members, if two or more, may fill all vacancies.
(G) UNLESS OTHERWISE PROVIDED IN THE ARTICLES OR REGULATIONS OF A
CORPORATION, ALL MEMBERS HAVE THE SAME MEMBERSHIP RIGHTS AND PRIVILEGES.
Sec. 1702.14. Where neither the articles nor the regulations provide for
members thereof as such, or where a corporation has in fact no members other
than the trustees DIRECTORS, the trustees
DIRECTORS shall, for the purposes of any statute or rule
of law relating to corporations, be taken to be the members of such
corporation, and they shall have all the rights and privileges of members;
provided, EXCEPT that where the provisions in sections
1702.01 to 1702.58, inclusive,
of the Revised Code THIS CHAPTER relating to meetings of
trustees DIRECTORS differ, it shall be
sufficient to comply with the provisions relating to trustees
DIRECTORS.
Sec. 1702.15. Each corporation shall keep correct and complete books and
records of account, together with minutes of the proceedings of its
incorporators, members, trustees DIRECTORS, and committees of
the trustees DIRECTORS or members.
Subject to limitations prescribed in the articles or the regulations upon the
right of members of charitable corporations A CORPORATION to
examine the books and records,
all books and records of a corporation, including the membership book
RECORDS
prescribed by section 1702.13 of the Revised Code, may be examined by any
member or trustee DIRECTOR or the agent or attorney of either,
for any reasonable and
proper purpose and at any reasonable time.
Sec. 1702.16. An annual meeting of voting members for the election of
trustees DIRECTORS and the consideration of reports to be laid
before such meeting shall
be held on a date designated by or in the manner provided for in the articles
or the regulations. In the absence of such a designation, the annual meeting
shall be held on the first Monday of the fourth month following the close of
each fiscal year of the corporation. When the annual meeting is not held or
trustees DIRECTORS are not elected thereat, they may be elected
at a special meeting
called for that purpose.
Sec. 1702.17. (A) Meetings of voting members may be called by any of the
following:
(1) The chairman CHAIRPERSON of the board, the president, or,
in case of the president's
absence, death, or disability, the vice-president authorized to exercise the
authority of the president;
(2) The trustees DIRECTORS by action at a meeting, or a
majority of the trustees DIRECTORS acting
without a meeting;
(3) The lesser of (a) ten per cent of the voting members or (b) twenty-five
of such members, unless the articles or the regulations specify for such
purpose a smaller or larger proportion or number, but not in excess of fifty
per cent of such members;
(4) Such other officers or persons as the articles or the regulations
authorize to call such meetings.
(B) Meetings of voting members may be held either within or without this
state if so provided in the articles or the regulations. In the absence of
any such provision, all meetings shall be held at the principal office of the
corporation in this state.
Sec. 1702.18. Unless the articles or the regulations provide for notice of
meetings otherwise than as provided in this section, written notice stating
the time and place of a meeting of the voting members, and, in case of a
special meeting, the purpose or purposes for which the meeting is called,
shall be given either by personal delivery or by mail IN THE MANNER
DESCRIBED IN SECTION 1702.02 of the Revised Code not less than ten nor OR
NOT more than sixty days before the date of the meeting: (A) to each
member
entitled to notice of the meeting; (B) by or at the direction of the president
or the secretary or any other person required or permitted by the regulations
to give notice or the officers or persons calling the meeting. If mailed,
such notice shall be addressed to the member at his THE MEMBER'S
address as it appears on
the records of the corporation. Notice of adjournment of a meeting need not
be given if the time and place to which it is adjourned are fixed and
announced at such meeting.
Sec. 1702.19. Notice of the time, place, and purposes of any meeting of
voting members or trustees DIRECTORS, as the case may be,
whether required by law, the
articles, the regulations, or (in the case of trustees
DIRECTORS) the bylaws, may be
waived in writing, either before or after the holding of such meeting, by any
member, or by any trustee DIRECTOR, which writing shall be filed
with or entered upon
the records of the meeting. The attendance of any member or any
trustee DIRECTOR at
any such meeting without protesting, prior to or at the commencement of the
meeting, the lack of proper notice shall be deemed to be a waiver by
him THE MEMBER OR DIRECTOR of
notice of such meeting.
Sec. 1702.21. (A) When any domestic nonprofit corporation
or domestic BUSINESS corporation for profit holds membership in
a domestic
or foreign corporation, the chairman CHAIRPERSON of the board,
the president,
any vice-president, the secretary, or the treasurer of the
corporation OR BUSINESS CORPORATION holding such membership, and any
such officer or
cashier or trust officer of a banking or trust corporation
holding such membership, and any like officer of a foreign
nonprofit corporation or foreign BUSINESS corporation for
profit, or of a
foreign banking or trust corporation, holding membership in a
domestic corporation, shall conclusively be deemed to have
authority to vote on behalf of that corporation OR BUSINESS
CORPORATION, and to appoint
proxies and execute written consents, waivers, and releases on
its behalf, unless, before a vote is taken or a consent, waiver,
or release is acted upon, it appears by a certified copy of the
regulations, the bylaws, or a resolution of the trustees,
directors, or executive committee of that corporation OR BUSINESS
CORPORATION that such
authority does not exist or is vested in some other officer or
person.
(B) WHEN ANY DOMESTIC OR FOREIGN LIMITED LIABILITY COMPANY HOLDS
MEMBERSHIP IN A DOMESTIC OR FOREIGN CORPORATION, ANY MANAGER OR MEMBER
OF THE LIMITED LIABILITY COMPANY HOLDING THAT MEMBERSHIP
SHALL CONCLUSIVELY BE DEEMED TO HAVE AUTHORITY TO VOTE ON
BEHALF OF THAT LIMITED LIABILITY COMPANY AND TO APPOINT PROXIES
AND EXECUTE WRITTEN CONSENTS, WAIVERS, AND RELEASES ON ITS BEHALF,
UNLESS BEFORE A VOTE IS TAKEN OR A CONSENT, WAIVER, OR RELEASE IS
ACTED UPON, IT APPEARS BY A CERTIFIED COPY OF THE ARTICLES OF
ORGANIZATION, OPERATING AGREEMENT, OR A RESOLUTION OF THE MANAGERS
OR THE MEMBERS OF THAT LIMITED LIABILITY COMPANY THAT SUCH
AUTHORITY DOES NOT EXIST OR IS VESTED IN SOME OTHER REPRESENTATIVE
OR PERSON.
(C) For the purpose of this section, a person exercising
such authority as such AN officer,
REPRESENTATIVE, OR OTHER PERSON ENTITLED TO VOTE AND ACTING IN THAT
CAPACITY is prima-facie deemed to be duly
elected, qualified, and acting as such THAT officer,
REPRESENTATIVE, OR OTHER PERSON ENTITLED TO VOTE AND ACTING IN THAT
CAPACITY.
Sec. 1702.22. Unless the articles or the regulations otherwise provide:
(A) The voting members present IN PERSON OR, IF PERMITTED, BY MAIL OR BY
PROXY, at any meeting of voting members shall
constitute a quorum for such meeting, but. THE AFFIRMATIVE
VOTE OF A MAJORITY OF THE VOTING MEMBERS PRESENT AT A MEETING AT WHICH A
QUORUM IS PRESENT SHALL BE NECESSARY FOR THE AUTHORIZATION OR TAKING OF ANY
ACTION VOTED UPON BY THE MEMBERS, EXCEPT THAT no action required by law,
the
articles, or the regulations to be authorized or taken by a specified
proportion or number of the voting members or of any class of voting members
may be authorized or taken by a lesser proportion or number;.
(B) The affirmative vote of a majority of the voting members present at a
meeting at which a quorum is present shall be necessary for the authorization
or taking of any action voted upon by the members;
(C) A majority of the voting members present at a meeting, whether or
not a
quorum is present, may adjourn such meeting from time to time.
Sec. 1702.23. Whenever, with respect to the authorization or taking of
any
action by the members or the trustees DIRECTORS, the articles or
the regulations require
the vote, consent, waiver, or release of a greater proportion or number of the
members or the trustees DIRECTORS than that otherwise required
by law with respect
thereto, the provisions of the articles or the regulations shall control.
Sec. 1702.25. Unless the articles or the regulations prohibit the
authorization or taking of any action of the INCORPORATORS, THE
members, or of the trustees DIRECTORS
without a meeting, any action which THAT may be authorized or
taken at a meeting of
the INCORPORATORS, THE members, or of the trustees
DIRECTORS, as the case may be, may be authorized or taken
without a meeting with the affirmative vote or approval of, and in a writing
or writings signed by, all of the INCORPORATORS, ALL OF THE
members, or all of the trustees DIRECTORS, as the case
may be, who would be entitled to notice of a meeting for such purpose, or, in
the case of members, such other proportion or number of voting members, not
less than a majority, as the articles or the regulations permit. Any such
writing shall be filed with or entered upon the records of the corporation.
Any certificate with respect to the authorization or taking of any such action
which THAT is required to be filed in the office of the
secretary of state shall
recite that the authorization or taking of such action was in a writing or
writings approved and signed as specified in this section.
Sec. 1702.26. (A) At a meeting of members at which trustees
DIRECTORS are to be
elected, only persons nominated as candidates shall be eligible for election
as trustees DIRECTORS.
(B) At all elections of trustees DIRECTORS the candidates
receiving the greatest number
of votes shall be elected.
Sec. 1702.27. (A) Except as provided in division (B) of this section and
section 1702.521 of the Revised Code:
(1) The number of trustees DIRECTORS as fixed by the articles
or the regulations shall
be not less than three or, if not so fixed, the number shall be three,
EXCEPT THAT IF THERE ARE ONLY ONE OR TWO MEMBERS OF THE CORPORATION, THE
NUMBER OF DIRECTORS MAY BE LESS THAN THREE BUT NOT LESS THAN THE NUMBER OF
MEMBERS.
(2) Unless the articles or the regulations fix the number of trustees
DIRECTORS or
provide the manner in which such number may be fixed or changed by the voting
members, the number may be fixed or changed at a meeting of the voting members
called for the purpose of electing trustees DIRECTORS, by the
affirmative vote of a
majority of the voting members present IN PERSON OR, IF PERMITTED, BY MAIL
OR BY PROXY, if a quorum is present, but no
reduction in the number of trustees DIRECTORS shall of itself
have the effect of
shortening the term of any incumbent trustee DIRECTOR.
(3) The trustee DIRECTOR shall have such qualifications, if
any, as are stated in the
articles or the regulations.
(4) The articles or the regulations may provide that persons occupying
certain positions within or without the corporation shall be ex officio
trustees DIRECTORS, but, unless otherwise provided in the
articles or the regulations,
such ex officio trustees DIRECTORS shall not be considered for
quorum purposes and shall
have no vote.
(B) The court of common pleas of the county in which the corporation
maintains its principal office may, pursuant to division (A) of section
1702.521 of the Revised Code, order the appointment of a provisional
trustee DIRECTOR
for the corporation without regard to the number or qualifications of
trustees DIRECTORS
stated in the articles or regulations of the corporation.
Sec. 1702.28. (A) Unless the articles or the regulations provide for a
different term, each trustee DIRECTOR shall hold office until
the next annual meeting
of voting members and until his THE DIRECTOR'S successor is
elected, or until his THE DIRECTOR'S earlier
resignation, removal from office, or death.
(B) The articles or the regulations may provide for the classification of
trustees DIRECTORS into classes and that the terms of office of
the several classes need
not be uniform.
Sec. 1702.29. (A) The office of a trustee DIRECTOR becomes
vacant if he THE
DIRECTOR dies or
resigns, which resignation shall take effect immediately or at such other time
as the trustee DIRECTOR may specify.
(B) A trustee DIRECTOR may be removed from office pursuant to
any procedure therefor
provided in the articles or in the regulations and such removal shall create a
vacancy in the board.
(C) Unless the articles or the regulations otherwise provide, the remaining
trustees DIRECTORS, though less than a majority of the whole
authorized number of
trustees DIRECTORS, may, by the vote of a majority of their
number, fill any vacancy in
the board for the unexpired term. Within the meaning of this section, a
vacancy exists in case the voting members increase the authorized number of
trustees DIRECTORS but fail at the meeting at which such
increase is authorized, or an
adjournment thereof, to elect the additional trustees DIRECTORS
provided for, or in case
the voting members fail at any time to elect the whole authorized number of
trustees DIRECTORS.
Sec. 1702.30. (A) Except where the law, the articles, or
the regulations require that action be otherwise authorized or
taken, all of the authority of a corporation shall be exercised
by or under the direction of its trustees DIRECTORS. For their
own
government, the trustees DIRECTORS may adopt bylaws that are not
inconsistent with the articles or the regulations.
(B) A trustee DIRECTOR shall perform his THE
duties as OF a trustee DIRECTOR,
including his THE duties as a member of any committee of the
trustees DIRECTORS
upon which he THE DIRECTOR may serve, in good faith, in a manner
he THE DIRECTOR reasonably
believes to be in or not opposed to the best interests of the
corporation, and with the care that an ordinarily prudent person
in a like position would use under similar circumstances. In
performing his THE duties OF A DIRECTOR, a trustee
DIRECTOR is
entitled to rely on
information, opinions, reports, or statements, including
financial statements and other financial data, that are prepared
or presented by the following:
(1) One or more trustees DIRECTORS, officers, or employees of
the
corporation who the trustee DIRECTOR reasonably believes are
reliable and
competent in the matters prepared or presented;
(2) Counsel, public accountants, or other persons as to
matters that the trustee DIRECTOR reasonably believes are within
the
person's professional or expert competence;
(3) A committee of the trustees DIRECTORS upon which he
THE DIRECTOR does
not
serve, duly established in accordance with a provision of the
articles or the regulations, as to matters within its designated
authority, which committee the trustee DIRECTOR reasonably
believes to
merit confidence.
(C) For purposes of division (B) of this section:
(1) A trustee DIRECTOR shall not be found to have failed to
perform
his THE DIRECTOR'S duties in accordance with that division,
unless it is proved,
by clear and convincing evidence, in an action brought against
the trustee DIRECTOR that he THE DIRECTOR has not
acted in good faith, in
a manner he THE DIRECTOR
reasonably believes to be in or not opposed to the best interests
of the corporation, or with the care that an ordinarily prudent
person in a like position would use under similar circumstances.
Such an action includes, but is not limited to, an action that
involves or affects any of the following:
(a) A change or potential change in control of the
corporation;
(b) A termination or potential termination of his THE
DIRECTOR'S
service
to the corporation as a trustee DIRECTOR;
(c) His THE DIRECTOR'S service in any other position or
relationship with
the corporation.
(2) A trustee DIRECTOR shall not be considered to be acting in
good
faith if he THE DIRECTOR has knowledge concerning the matter in
question that
would cause reliance on information, opinions, reports, or
statements that are prepared or presented by the persons
described in divisions (B)(1) to (3) of this section, to be
unwarranted.
(3) The provisions of this division do not limit relief
available under section 1702.301 of the Revised Code.
(D)(1) Subject to divisions (D)(2) and (3) of this
section, a trustee DIRECTOR is liable in damages for any act
that he THE
DIRECTOR takes
or fails to take as trustee DIRECTOR only if it is proved, by
clear and
convincing evidence, in a court with jurisdiction that the act or
omission of the trustee DIRECTOR was one undertaken with a
deliberate
intent to cause injury to the corporation or was one undertaken
with a reckless disregard for the best interests of the
corporation.
(2) Division (D)(1) of this section does not affect the
liability of a trustee DIRECTOR under section 1702.55 of the
Revised Code.
(3) Subject to division (D)(2) of this section, division
(D)(1) of this section does not apply if, and only to the extent
that, at the time of an act or omission of a trustee DIRECTOR
that is the
subject of complaint, the articles or the regulations of the
corporation state, by specific reference to that division, that
its provisions do not apply to the corporation.
(E) For purposes of this section, in determining what he A
DIRECTOR
reasonably believes to be in or not opposed to the best interests
of the corporation, a trustee DIRECTOR shall consider the
purposes of the
corporation and may consider any of the following:
(1) The interests of the employees, suppliers, creditors,
and customers of the corporation;
(2) The economy of this state and of the nation;
(3) Community and societal considerations;
(4) The long-term and short-term best interests of the
corporation, including, but not limited to, the possibility that
those interests may be best served by the continued independence
of the corporation.
(F) Divisions (C) and (D) of this section do not affect
the duties of a trustee DIRECTOR who acts in any capacity other
than in
his THE capacity as a trustee DIRECTOR.
Sec. 1702.301. (A) Unless otherwise provided in the
articles or the regulations:
(1) No contract, action, or transaction is void or
voidable with respect to a corporation because the contract,
action, or transaction is between or affects the corporation and
one or more of its trustees DIRECTORS or officers, or is between
or affects
the corporation and any other person in which one or more of the
corporation's trustees DIRECTORS or officers are directors,
trustees, or
officers, or in which one or more of the corporation's trustees
DIRECTORS
or officers have a financial or personal interest, or because one
or more interested trustees DIRECTORS or officers participate in
or vote at
the meeting of the trustees DIRECTORS or a committee of the
trustees
DIRECTORS that
authorizes the contract, action, or transaction, if any of the
following applies:
(a) The material facts as to his or their THE DIRECTOR'S
relationship or
interest and as to the contract, action, or transaction are
disclosed or are known to the trustees DIRECTORS or the
committee, and the
trustees DIRECTORS or committee, in good faith reasonably
justified by the
material facts, authorizes the contract, action, or transaction
by the affirmative vote of a majority of the disinterested
trustees DIRECTORS, even though the disinterested
trustees DIRECTORS constitute less
than a quorum of the trustees DIRECTORS or the committee;
(b) The material facts as to his or their THE DIRECTOR'S
relationship or
interest and as to the contract, action, or transaction are
disclosed or are known to the members entitled to vote on the
contract, action, or transaction, and the contract, action, or
transaction is specifically approved at a meeting of the members
held for the purpose of voting on the contract, action, or
transaction, by the affirmative vote of a majority of the voting
members of the corporation who are not interested in the
contract, action, or transaction;
(c) The contract, action, or transaction is fair as to the
corporation as of the time it is authorized or approved by the
trustees DIRECTORS, a committee of the trustees
DIRECTORS, or the members.
(2) Common or interested trustees DIRECTORS may be counted in
determining the presence of a quorum at a meeting of the
trustees DIRECTORS, or of a committee of the trustees
DIRECTORS, that authorizes such
a contract, action, or transaction.
(3) The trustees DIRECTORS, by the affirmative vote of a
majority of
those in office, and irrespective of any financial or personal
interest of any of the trustees DIRECTORS, shall have authority
to
establish reasonable compensation, which may include pension,
disability, and death benefits, for services to the corporation
by trustees DIRECTORS and officers, or to delegate that
authority to
establish reasonable compensation to one or more officers or
trustees DIRECTORS.
(B) Divisions (A)(1) and (2) of this section do not limit
or otherwise affect the liability of trustees DIRECTORS under
section
1702.55 of the Revised Code.
(C) For purposes of division (A) of this section, a
trustee DIRECTOR is not an interested trustee
DIRECTOR solely because the subject
of a contract, action, or transaction may involve or effect a
change in control of the corporation or his THE DIRECTOR'S
continuation in
office as a trustee DIRECTOR of the corporation.
(D) For purposes of this section, "action" means a
resolution that is adopted by the trustees DIRECTORS or a
committee of the
trustees DIRECTORS.
Sec. 1702.31. Unless otherwise provided in the articles,
regulations, or bylaws, and subject to the exceptions applicable
during an emergency for which provision is made in division (G)
of section 1702.11 of the Revised Code:
(A) Meetings of the trustees DIRECTORS may be called by the
chairman
CHAIRPERSON
of the board, the president, any vice-president, or any two
trustees DIRECTORS;
(B) Meetings of the trustees DIRECTORS may be held at any place
within or without the state and, unless the articles or
regulations prohibit participation by trustees DIRECTORS at a
meeting by
means of communications equipment, meetings of the trustees
DIRECTORS may
be held through any communications equipment if all persons
participating can hear each other and participation in a meeting
pursuant to this division shall constitute presence at such
meeting;
(C) Written notice of the time and place of each meeting
of the trustees DIRECTORS shall be given to each trustee
DIRECTOR either by personal
delivery or by mail, telegram, or cablegram at least two days
before the meeting, which notice need not specify the purposes of
the meeting;
(D) Notice of adjournment of a meeting need not be given
if the time and place to which it is adjourned are fixed and
announced at such meeting.
Sec. 1702.32. Unless the articles or the regulations otherwise provide, and
subject to the exceptions applicable during an emergency for which provision
is made in division (G) in OF section 1702.11 of the Revised
Code, a majority of
the whole authorized number of trustees DIRECTORS is necessary
to constitute a quorum
for a meeting of the trustees DIRECTORS, except that a majority
of the trustees DIRECTORS in
office constitutes a quorum for filling a vacancy in the board. The act of a
majority of the trustees DIRECTORS present at a meeting at which
a quorum is present is
the act of the board, unless the act of a greater number is required by the
articles, the regulations, or the bylaws.
Sec. 1702.33. (A) The regulations may provide for the
creation by the trustees DIRECTORS of an executive committee or
any other
committee of the trustees DIRECTORS, to consist of not less
than three
trustees ONE OR MORE DIRECTORS, and may authorize the delegation to
any such committee
of any of the authority of the trustees DIRECTORS, however
conferred.
(B) The trustees DIRECTORS may appoint one or more
trustees DIRECTORS as
alternate members of any such committee, who may take the place
of any absent member or members at any meeting of the particular
committee.
(C) Each such committee shall serve at the pleasure of the
trustees DIRECTORS, shall act only in the intervals between
meetings of the
trustees DIRECTORS, and shall be subject to the control and
direction of
the trustees DIRECTORS.
(D) Unless otherwise provided in the regulations or
ordered by the trustees DIRECTORS, any such committee may act by
a majority
of its members at a meeting or by a writing or writings signed by
all of its members.
(E) Unless participation by members of any such committee
at a meeting by means of communications equipment is prohibited
by the articles, the regulations, or an order of the trustees
DIRECTORS,
meetings of the particular committee may be held through any
communications equipment if all persons participating can hear
each other. Participation in a meeting pursuant to this division
constitutes presence at the meeting.
(F) An act or authorization of an act by any such
committee within the authority delegated to it shall be as
effective for all purposes as the act or authorization of the
trustees DIRECTORS.
Sec. 1702.34. (A) The officers of a corporation shall
consist of a president, a secretary, a treasurer, and, if
desired, a chairman CHAIRPERSON of the board, one or more
vice-presidents,
and such other officers and assistant officers as may be deemed
necessary, each of whom may be designated by such other titles as
may be provided in the articles, the regulations, the bylaws, or
resolutions of the trustees DIRECTORS. Unless the articles or
the
regulations otherwise provide, none of the officers need be a
trustee DIRECTOR. Any two or more offices may be held by the
same person.
The officers shall be elected or appointed at such time, in such
manner, and for such terms as may be prescribed in the articles
or the regulations. In the absence of any such provision, all
officers shall be elected annually by the trustees DIRECTORS.
(B) Unless the articles or the regulations otherwise
provide, and subject to the exceptions applicable during an
emergency for which provision is made in division (G) of section
1702.11 of the Revised Code:
(1) All officers, as between themselves and the
corporation, shall respectively have such authority and perform
such duties as are determined by the persons authorized to elect
or appoint them;
(2) Any officer may be removed, with or without cause, by
the persons authorized to elect or appoint him THE OFFICER
without prejudice
to the contract rights of such officer. The election or
appointment of an officer for a given term, or a general
provision in the articles, the regulations, or the bylaws with
respect to term of office, shall not be deemed to create contract
rights;
(3) The persons authorized to elect or appoint officers
may fill any vacancy in any office occurring from whatever
reason.
Sec. 1702.36. The trustees DIRECTORS may authorize any
mortgage, pledge, or deed of
trust of all or any of the property of the corporation of any description, or
any interest therein, for the purpose of securing the payment or performance
of any obligation or contract. Unless the articles or the regulations, or the
terms of any trust on which the corporation holds any particular property,
otherwise provide, no vote or consent of members or authorization from the
court under section 1715.39 of the Revised Code is necessary for such action.
Sec. 1702.38. (A) The articles may be amended from time
to time in any respect if the articles as amended set forth all
such provisions as are required in, and only such provisions as
may properly be in, original articles filed at the time of
adopting the amendment, other than with respect to the initial
trustees; provided DIRECTORS, EXCEPT that a charitable
PUBLIC BENEFIT corporation shall not amend
its articles in such manner that it will cease to be a charitable
PUBLIC BENEFIT corporation.
(B) Without limiting the generality of such authority, the
articles may be amended to:
(1) Change the name of the corporation;
(2) Change the place in this state where its principal
office is to be located;
(3) Change, enlarge, or diminish its purpose or purposes;
(4) Change any provision of the articles or add any
provision that may properly be included therein.
(C) The voting members PRESENT IN PERSON OR, IF PERMITTED, BY MAIL OR BY
PROXY, at a meeting held for such purpose
may adopt an amendment by the affirmative vote of a majority of
the voting members present if a quorum is present, or, if the
articles or the regulations provide or permit, by the affirmative
vote of a greater or lesser proportion or number of the voting
members, and by such affirmative vote of the voting members of
any particular class as is required by the articles or the
regulations.
(D) In addition to or in lieu of adopting an amendment to
the articles, the voting members may adopt amended articles by
the same action or vote as that required to adopt the amendment.
(E) The trustees DIRECTORS may adopt amended articles to
consolidate
the original articles and all previously adopted amendments to
the articles that are in force at the time, or the voting members
at a meeting held for such purpose may adopt such amended
articles by the same vote as that required to adopt an amendment.
(F) Amended articles shall set forth all such provisions
as are required in, and only such provisions as may properly be
in, original articles filed at the time of adopting the amended
articles, other than with respect to the initial trustees
DIRECTORS, and
shall contain a statement that they supersede the existing
articles.
(G) Upon the adoption of any amendment or amended
articles, a certificate containing a copy of the resolution
adopting the amendment or amended articles, a statement of the
manner of its adoption, and, in the case of adoption of the
resolution by the trustees DIRECTORS, a statement of the basis
for such
adoption, shall be filed with the secretary of state, and
thereupon the articles shall be amended accordingly, and the
amended articles shall supersede the existing articles. The
certificate shall be signed by any authorized officer of the
corporation.
(H) A copy of an amendment or amended articles changing
the name of a corporation or its principal office in this state,
certified by the secretary of state, may be filed for record in
the office of the county recorder of any county in this state,
and for such recording the county recorder shall charge and
collect the same fee as provided for in division (A) of section
317.32 of the Revised Code. Such copy shall be recorded in the
records of deeds.
Sec. 1702.39. (A) Unless the articles or the regulations, or the terms of
any trust on which the corporation holds any particular property, otherwise
provide, a lease, sale, exchange, transfer, or other disposition of any assets
of a MUTUAL BENEFIT corporation may be made without the necessity of
procuring authorization
from the court under section 1715.39 of the Revised Code, upon such terms and
for such consideration, which may consist, in whole or in part, of money or
other property, including shares or other securities or promissory obligations
of any BUSINESS corporation for profit, domestic or foreign, as
may be authorized by
the trustees; provided DIRECTORS, EXCEPT that a lease, sale,
exchange, transfer, or other
disposition of all, or substantially all, the assets may be made only when
such transaction is also authorized (either before or after authorization by
the trustees DIRECTORS) by the voting members PRESENT IN
PERSON OR, IF PERMITTED, BY PROXY, at a meeting held for such
purpose, by the
affirmative vote of a majority of the voting members present if a quorum is
present, or, if the articles or the regulations provide or permit, by the
affirmative vote of a greater or lesser proportion or number of the voting
members, and by such affirmative vote of the voting members of any particular
class as is required by the articles or the regulations. Notice of the
meeting of the members shall be given to all members whether or not
entitled
to vote thereat. Such notice shall be accompanied by a copy or summary of the
terms of such transaction.
(B)(1) A PUBLIC BENEFIT CORPORATION MAY NOT
DISPOSE OF ITS ASSETS WITH VALUE EQUAL TO MORE THAN
FIFTY PER CENT OF THE FAIR MARKET VALUE OF THE NET TANGIBLE AND
INTANGIBLE ASSETS, INCLUDING GOODWILL, OF THE CORPORATION OVER A
PERIOD OF THIRTY-SIX CONSECUTIVE MONTHS IN A TRANSACTION OR
SERIES OF TRANSACTIONS,
INCLUDING THE LEASE,
SALE, EXCHANGE, TRANSFER, OR OTHER DISPOSITION OF THOSE ASSETS,
THAT ARE OUTSIDE THE ORDINARY COURSE OF ITS
BUSINESS OR THAT ARE NOT IN ACCORDANCE WITH THE PURPOSE OR PURPOSES FOR WHICH
THE
CORPORATION WAS ORGANIZED, AS SET FORTH IN ITS ARTICLES OR THE
TERMS OF ANY TRUST ON WHICH THE CORPORATION HOLDS SUCH ASSETS,
UNLESS ONE OR MORE OF THE FOLLOWING APPLY:
(a) THE TRANSACTION HAS RECEIVED THE PRIOR APPROVAL OF THE COURT
OF COMMON PLEAS OF THE COUNTY IN THIS STATE IN WHICH THE
PRINCIPAL OFFICE OF THE CORPORATION IS LOCATED, IN A PROCEEDING OF
WHICH THE ATTORNEY GENERAL'S CHARITABLE LAW SECTION HAS BEEN GIVEN WRITTEN
NOTICE
BY CERTIFIED MAIL WITHIN THREE DAYS OF THE INITIATION OF THE PROCEEDING,
AND IN WHICH PROCEEDING THE ATTORNEY GENERAL MAY
INTERVENE AS OF RIGHT.
(b) THE CORPORATION HAS PROVIDED WRITTEN NOTICE OF THE PROPOSED
TRANSACTION, INCLUDING A COPY OR SUMMARY OF THE TERMS OF SUCH TRANSACTION,
AT LEAST TWENTY DAYS BEFORE CONSUMMATION OF THE LEASE, SALE, EXCHANGE,
TRANSFER, OR OTHER DISPOSITION OF THE ASSETS, TO THE ATTORNEY
GENERAL'S CHARITABLE LAW SECTION AND TO THE MEMBERS OF THE CORPORATION, AND
THE PROPOSED
TRANSACTION HAS BEEN APPROVED BY THE VOTING MEMBERS PRESENT IN
PERSON OR, IF PERMITTED, BY PROXY, AT A MEETING HELD FOR SUCH
PURPOSE, BY THE
AFFIRMATIVE VOTE OF A MAJORITY OF THE VOTING MEMBERS PRESENT IF A
QUORUM IS PRESENT, OR, IF THE ARTICLES OR REGULATIONS PROVIDE OR
PERMIT, BY THE AFFIRMATIVE VOTE OF A GREATER OR LESSER PROPORTION OR NUMBER OF
THE VOTING MEMBERS, AND IF THE ARTICLES OR REGULATIONS
REQUIRE, BY THE AFFIRMATIVE
VOTE OF THE VOTING MEMBERS OF ANY PARTICULAR CLASS.
(c) THE TRANSACTION IS IN ACCORDANCE WITH THE PURPOSE OR
PURPOSES FOR WHICH THE CORPORATION WAS ORGANIZED, AS SET FORTH IN ITS
ARTICLES OR THE TERMS OF ANY TRUST ON WHICH THE CORPORATION HOLDS
THE ASSETS, AND THE LESSEE, PURCHASER, OR TRANSFEREE OF THE
ASSETS IS ALSO A PUBLIC BENEFIT CORPORATION OR A FOREIGN
CORPORATION THAT WOULD QUALIFY UNDER THE REVISED CODE AS A
PUBLIC
BENEFIT CORPORATION.
(2) THE ATTORNEY GENERAL MAY REQUIRE, PURSUANT TO SECTION 109.24
OF THE REVISED CODE, THE PRODUCTION OF THE DOCUMENTS
NECESSARY FOR
REVIEW OF A PROPOSED TRANSACTION UNDER DIVISION (B)(1) OF THIS
SECTION. THE ATTORNEY GENERAL MAY RETAIN, AT THE EXPENSE OF THE PUBLIC
BENEFIT CORPORATION, ONE OR
MORE EXPERTS, INCLUDING AN INVESTMENT BANKER, ACTUARY, APPRAISER, CERTIFIED
PUBLIC ACCOUNTANT, OR
OTHER EXPERT, THAT THE ATTORNEY GENERAL CONSIDERS REASONABLY
NECESSARY TO PROVIDE ASSISTANCE IN REVIEWING A PROPOSED TRANSACTION UNDER
DIVISION (B)(1) OF THIS SECTION.
(C) THE ATTORNEY GENERAL MAY INSTITUTE A CIVIL ACTION TO ENFORCE
THE REQUIREMENTS OF DIVISION (B)(1) OF THIS SECTION IN THE COURT OF
COMMON PLEAS OF THE COUNTY IN THIS STATE IN WHICH THE PRINCIPAL OFFICE OF THE
CORPORATION IS
LOCATED OR IN THE FRANKLIN
COUNTY
COURT OF
COMMON
PLEAS. IN ADDITION TO ANY CIVIL
REMEDIES THAT MAY EXIST UNDER COMMON LAW OR THE REVISED
CODE, A
COURT MAY RESCIND THE TRANSACTION OR GRANT INJUNCTIVE RELIEF OR
IMPOSE ANY COMBINATION OF THESE REMEDIES.
(D) The corporation by its trustees DIRECTORS may
abandon the proposed lease,
sale,
exchange, transfer, or other disposition of all or substantially all of
the
assets of the corporation PURSUANT TO DIVISION (A) OR (B)
OF THIS SECTION, subject to the contract rights of other persons, if
such power of abandonment is conferred upon the trustees
DIRECTORS either by the terms
of the transaction or by the same vote of voting members and at the same
meeting of members as that referred to in division (A) OR (B)
of this section, AS APPLICABLE, or at
any subsequent meeting.
(C)(E) An action to set aside a conveyance by a corporation,
on the ground that
any section of the Revised Code applicable to the lease, sale, exchange,
transfer, or other disposition of all or substantially all the assets
of such
corporation has not been complied with, shall be brought within ninety
days ONE YEAR
after such transaction, or such THE action shall be forever
barred.
Sec. 1702.41. (A)(1) Any two or more corporations may merge
into a single corporation which shall be one of the constituent
corporations, or may consolidate into a single corporation which
shall be a new corporation to be formed by the consolidation;
except that a charitable corporation may merge into or may
consolidate with other charitable corporations only, and the
surviving or new corporation, as the case may be, must be a
charitable corporation.
(B)(2) To effect such merger or consolidation, the
trustees DIRECTORS
of each constituent corporation shall approve an agreement of
merger or consolidation to be signed by the chairman CHAIRPERSON
of the
board, THE president, or a vice-president, and by the secretary
or an
assistant secretary, which agreement shall set forth:
(1)(a) That the named constituent corporations have agreed to
merge into a specified constituent corporation, herein designated
the surviving corporation, or that the named constituent
corporations have agreed to consolidate into a new corporation to
be formed by the consolidation, herein designated the new
corporation;
(2)(b) The name of the surviving or new corporation, which
may be the same as or similar to that of any constituent
corporation;
(3)(c) The place in this state where the principal office of
the surviving or new corporation is to be located;
(4) The purpose or purposes of the surviving or new
corporation which, in case the constituent corporations are
charitable corporations, must be such that the surviving or new
corporation will also be a charitable corporation;
(5)(d) The names and addresses of the first trustees
DIRECTORS and
officers of the surviving or new corporation, and, if desired,
their term or terms of office;
(6)(e) The name and address of the statutory agent upon whom
any process, notice, or demand against any constituent
corporation or the surviving or new corporation may be served;
(7)(f) The terms of the merger or consolidation and the mode
of carrying the same into effect;
(8)(g) The regulations of the surviving or new corporation or
a provision to the effect that the regulations of one of the
constituent corporations shall be the regulations of the
surviving or new corporation or to the effect that the voting
members or the trustees DIRECTORS of the surviving or new
corporation may
adopt regulations, or any combination thereof.
(C)(3) The agreement may also set forth:
(1)(a) The specification of a date, which may be the date of
the filing of the agreement or a date subsequent thereto, upon
which the merger or consolidation shall become effective;
(2)(b) A provision conferring upon the trustees
DIRECTORS of one or
more of the constituent corporations the power to abandon the
merger or consolidation prior to the filing of the agreement;
(3)(c) Any additional provision permitted to be included in
the articles of a newly formed corporation;
(4)(d) Any additional provision deemed necessary or desirable
with respect to the proposed merger or consolidation.
(B)(1) WITHOUT THE PRIOR APPROVAL OF THE COURT OF COMMON PLEAS OF
THE COUNTY IN THIS STATE IN WHICH THE PRINCIPAL OFFICE OF THE CORPORATION IS
LOCATED, IN A PROCEEDING OF WHICH THE ATTORNEY GENERAL'S CHARITABLE LAW
SECTION HAS BEEN GIVEN WRITTEN
NOTICE
BY CERTIFIED MAIL WITHIN THREE DAYS OF THE INITIATION OF THE PROCEEDING, AND
IN WHICH PROCEEDING THE ATTORNEY GENERAL MAY INTERVENE AS OF RIGHT, A PUBLIC
BENEFIT CORPORATION MAY MERGE OR CONSOLIDATE ONLY WITH ANY OF
THE FOLLOWING:
(a) A PUBLIC BENEFIT CORPORATION;
(b) A FOREIGN CORPORATION THAT WOULD QUALIFY UNDER THE
REVISED CODE AS A PUBLIC BENEFIT CORPORATION;
(c) A MUTUAL BENEFIT CORPORATION OR A BUSINESS CORPORATION,
PROVIDED THAT THE PUBLIC BENEFIT CORPORATION IS THE SURVIVING CORPORATION IN
THE CASE OF A MERGER AND CONTINUES TO BE A PUBLIC BENEFIT CORPORATION OR THAT
A PUBLIC BENEFIT CORPORATION IS THE NEW CORPORATION IN THE CASE OF A
CONSOLIDATION;
(d) A BUSINESS CORPORATION OR MUTUAL BENEFIT CORPORATION,
PROVIDED THAT ALL OF THE FOLLOWING APPLY:
(i) ON OR PRIOR TO THE EFFECTIVE DATE OF THE MERGER OR
CONSOLIDATION, ASSETS WITH
A VALUE EQUAL TO THE GREATER OF THE FAIR MARKET VALUE OF THE NET TANGIBLE AND
INTANGIBLE ASSETS, INCLUDING GOODWILL, OF THE PUBLIC BENEFIT CORPORATION OR
THE FAIR MARKET VALUE OF THE PUBLIC BENEFIT CORPORATION IF IT IS TO BE
OPERATED AS A BUSINESS CONCERN, ARE TRANSFERRED OR CONVEYED TO ONE OR MORE
PERSONS THAT WOULD HAVE RECEIVED ITS ASSETS UNDER SECTION 1702.49 of the Revised Code HAD IT
VOLUNTARILY DISSOLVED.
(ii) IT RETURNS, TRANSFERS, OR CONVEYS ANY ASSETS HELD BY IT UPON
A CONDITION REQUIRING RETURN, TRANSFER, OR CONVEYANCE, WHICH CONDITION OCCURS
BY REASON OF THE MERGER OR CONSOLIDATION, IN ACCORDANCE WITH THAT CONDITION.
(iii) THE MERGER OR CONSOLIDATION IS APPROVED BY A MAJORITY OF
DIRECTORS OF THE
PUBLIC BENEFIT CORPORATION WHO WILL NOT RECEIVE ANY FINANCIAL OR OTHER
BENEFIT, DIRECTLY OR INDIRECTLY, AS A RESULT OF THE MERGER OR CONSOLIDATION OR
BY AGREEMENT,
AND WHO ARE NOT AND WILL NOT AS A RESULT OF THE MERGER OR CONSOLIDATION BECOME
MEMBERS OF,
SHAREHOLDERS IN, OR OFFICERS, EMPLOYEES, AGENTS, OR CONSULTANTS OF THE
SURVIVING OR NEW BUSINESS CORPORATION OR MUTUAL BENEFIT CORPORATION.
(2) AT LEAST TWENTY DAYS BEFORE CONSUMMATION OF ANY MERGER OR
CONSOLIDATION OF A PUBLIC BENEFIT CORPORATION PURSUANT TO DIVISION
(B)(1)(d) OF THIS SECTION, WRITTEN NOTICE, INCLUDING A
COPY OF
THE PROPOSED PLAN OF MERGER OR CONSOLIDATION, SHALL BE DELIVERED TO THE
ATTORNEY GENERAL'S CHARITABLE LAW SECTION. THE ATTORNEY GENERAL'S CHARITABLE
LAW SECTION MAY REVIEW A PROPOSED MERGER OR
CONSOLIDATION OF A PUBLIC BENEFIT CORPORATION UNDER DIVISION (B) (1)(d)OF THIS SECTION. THE ATTORNEY GENERAL MAY REQUIRE, PURSUANT
TO
SECTION
109.24 of the Revised Code, THE PRODUCTION OF THE DOCUMENTS NECESSARY FOR REVIEW OF A
PROPOSED MERGER OR CONSOLIDATION UNDER DIVISION
(B)(1)(d) OF THIS SECTION. THE ATTORNEY GENERAL MAY
RETAIN, AT THE EXPENSE OF THE PUBLIC BENEFIT CORPORATION, ONE OR MORE EXPERTS,
INCLUDING AN INVESTMENT BANKER, ACTUARY, APPRAISER, CERTIFIED PUBLIC
ACCOUNTANT, OR OTHER EXPERT, THAT THE ATTORNEY GENERAL CONSIDERS REASONABLY
NECESSARY TO PROVIDE ASSISTANCE IN REVIEWING A PROPOSED MERGER OR
CONSOLIDATION UNDER DIVISION (B)(1)(d) OF THIS
SECTION. THE ATTORNEY GENERAL MAY EXTEND THE DATE OF ANY MERGER OR
CONSOLIDATION OF A PUBLIC BENEFIT CORPORATION UNDER DIVISION (B) (1)(d)OF THIS SECTION FOR A PERIOD NOT TO EXCEED SIXTY DAYS AND
SHALL
PROVIDE NOTICE OF THAT EXTENSION TO THE PUBLIC BENEFIT CORPORATION. THE
NOTICE SHALL SET FORTH THE REASONS NECESSITATING THE EXTENSION.
(3) WITHOUT THE PRIOR WRITTEN CONSENT OF THE ATTORNEY GENERAL OR OF THE
COURT OF COMMON PLEAS OF THE COUNTY IN THIS STATE IN WHICH THE PRINCIPAL
OFFICE OF THE CORPORATION IS LOCATED, IN A PROCEEDING IN WHICH THE ATTORNEY
GENERAL'S CHARITABLE LAW SECTION HAS BEEN GIVEN WRITTEN NOTICE
BY CERTIFIED MAIL WITHIN THREE DAYS OF THE INITIATION OF THE PROCEEDING, AND
IN WHICH PROCEEDING THE ATTORNEY GENERAL MAY INTERVENE AS OF RIGHT, NO MEMBER
OR DIRECTOR OF A PUBLIC BENEFIT
CORPORATION IN
THAT PERSON'S CAPACITY AS A MEMBER OR DIRECTOR MAY RECEIVE OR KEEP ANYTHING AS
A RESULT OF
A MERGER OF CONSOLIDATION OTHER THAN MEMBERSHIP OR DIRECTORSHIP IN THE
SURVIVING OR NEW PUBLIC
BENEFIT CORPORATION.
THE COURT SHALL APPROVE THE TRANSACTION IF IT IS IN THE PUBLIC INTEREST.
(4) THE ATTORNEY GENERAL MAY INSTITUTE A CIVIL ACTION TO ENFORCE THE
REQUIREMENTS OF DIVISIONS (B)(1), (2), AND (3) OF THIS SECTION IN THE
COURT
OF COMMON PLEAS OF THE COUNTY IN THIS STATE IN WHICH THE PRINCIPAL OFFICE OF
THE CORPORATION IS LOCATED OR IN THE FRANKLIN COUNTY COURT OF COMMON
PLEAS. IN ADDITION TO ANY CIVIL REMEDIES THAT MAY EXIST UNDER COMMON LAW OR
THE REVISED CODE, A COURT MAY RESCIND THE TRANSACTION OR
GRANT INJUNCTIVE RELIEF OR IMPOSE ANY COMBINATION OF THESE REMEDIES.
(C) A CORPORATION MAY BE THE SURVIVING OR NEW ENTITY IN A MERGER
OR
CONSOLIDATION WITH ONE OR MORE BUSINESS CORPORATIONS, OR A CORPORATION MAY
MERGE OR CONSOLIDATE INTO ONE OR MORE BUSINESS
CORPORATIONS WITH A BUSINESS CORPORATION, A MUTUAL BENEFIT CORPORATION, OR A
FOREIGN CORPORATION AS THE SURVIVING OR NEW ENTITY,
PROVIDED THAT THE CORPORATION COMPLIES WITH THE PROVISIONS OF THIS
SECTION AND SECTIONS 1702.42 AND 1702.43 OF THE REVISED
CODE, AS
APPLICABLE TO THE CORPORATION, AND THAT THE BUSINESS CORPORATION
COMPLIES WITH THE PROVISIONS OF SECTION 1701.781 OR 1701.791 OF
THE REVISED CODE, AS APPLICABLE TO THE BUSINESS
CORPORATION.
Sec. 1702.42. (A) The trustees DIRECTORS of each constituent
corporation, upon
approving such AN agreement of merger or consolidation, shall
direct that the
agreement be submitted to the voting members entitled to vote on it at a
meeting of voting members of such corporation held for such THAT
purpose, and
notice of such meeting shall be given to all members of such constituent
corporation whether or not entitled to vote thereat. The notice shall
be
accompanied by a copy or summary of the agreement.
(B) At each such meeting, a vote of the members shall be taken on the
proposed agreement. In order to be adopted, the agreement (including any
amendments or additions thereto proposed at each such meeting) must receive
the affirmative vote of a majority of the voting members of each constituent
corporation present IN PERSON OR, IF PERMITTED, BY MAIL OR BY
PROXY, at each such meeting if a quorum is present, or, if the
articles or the regulations of such corporation provide or permit, the
affirmative vote of a greater or lesser proportion or number of the voting
members, and such affirmative vote of the voting members of any particular
class as is required by the articles or the regulations of such corporation.
If the agreement would authorize any particular corporate action which
THAT, under
any applicable provision of law or under the existing articles of one or more
of the constituent corporations, could be authorized only by or pursuant to a
specified vote of voting members, such agreement (including any amendments or
additions thereto proposed at each such meeting) in order to be adopted must
receive the affirmative vote so specified.
(C) At any time prior to the filing of the agreement, the merger or
consolidation may be abandoned by the trustees DIRECTORS of one
or more of the
constituent corporations, if such THE power of abandonment is
conferred upon such
trustees DIRECTORS either by the agreement or by the same vote
of voting members of each
of the constituent corporations and at the same meetings as those referred to
in division (B) of this section or at subsequent meetings.
Sec. 1702.44. When such merger or consolidation becomes
effective:
(A) The separate existence of all the constituent
corporations, except the surviving or new corporation, shall
cease, except that, whenever a conveyance, assignment, transfer,
deed, or other instrument, or act, is necessary to vest property
or rights in the surviving or new corporation, the officers of
the respective constituent corporation shall execute,
acknowledge, and deliver such instruments, and do such acts, and
for such purposes the existence of the constituent corporations
and the authority of their respective officers and trustees
DIRECTORS shall
be deemed continued notwithstanding the merger or consolidation;
(B) The constitutent CONSTITUENT corporations shall become
a single corporation which, in the case of a merger, shall be
that one of the constituent corporations designated in the
agreement of merger as the surviving corporation and, in the case
of a consolidation, shall be the new corporation provided for in
the agreement of consolidation;
(C) The surviving or new corporation shall have all the
rights, privileges, immunities, powers, franchises, and authority
and shall be subject to all the obligations of a corporation
formed under sections 1702.01 to 1702.58 of the Revised Code THIS
CHAPTER;
(D) The surviving or new corporation shall thereupon and
thereafter possess all the rights, privileges, immunities,
powers, franchises, and authority, as well of a public as of a
private nature, of each of the constituent corporations; and all
property of every description, and every interest therein, and
all obligations, of or belonging to or due to each of the
constituent corporations, shall thereafter be taken and deemed to
be transferred to and vested in the surviving or new corporation
without further act or deed; and any right or interest in respect
to any past or future devise, bequest, conditional gift, or
trust, property, or fund restricted to particular uses, when
vested in or claimed by such surviving or new corporation as a
result of such merger or consolidation, shall belong to it as a
continuation without interruption of the existence and identity
of the constituent organization originally named as taker or
beneficiary; and title to any real estate, or any interest
therein, vested in any of the constituent corporations shall not
revert or in any way be impaired by reason of such merger or
consolidation;
(E) To the extent permitted by the laws of any other state
in which any constituent corporation has property, the provisions
of division (D) of this section apply in such state;
(F) The surviving or new corporation shall thenceforth be
liable for all the obligations of each of the constituent
corporations; and any claim existing or action or proceeding
pending by or against any of the constituent corporations may be
prosecuted to judgment, with right of appeal as in other cases,
as if such merger or consolidation had not taken place, or the
surviving or new corporation may be substituted in its place;
(G) All the rights of creditors of each constituent
corporation shall be preserved unimpaired, and all liens upon the
property of any of the constituent corporations shall be
preserved unimpaired, limited in lien to the property affected by
such liens immediately prior to the effective date of the merger
or consolidation;
(H) The agreement shall operate as amended articles in the
case of a merger and as original articles in the case of
consolidation.
Sec. 1702.45. One or more domestic corporations may merge or consolidate with
one or more foreign corporations in the following manner, if such merger or
consolidation is permitted by the laws of each state under the laws of which
any constituent foreign corporation exists:
(A) Each domestic corporation shall comply with the provisions of sections
1702.41, 1702.42, and 1702.43 of the Revised Code, and each foreign
corporation shall comply with the applicable provisions of the laws of the
state under which it exists, except that the agreement of merger or
consolidation, by whatever name designated, shall comply with divisions (B)
and (C) of this section, and except that a charitable corporation may merge
into or may consolidate with other charitable corporations only, and the
surviving or new corporation, as the case may be, must be a charitable
corporation ANY MERGER OR CONSOLIDATION OF A PUBLIC BENEFIT
CORPORATION, WHETHER DOMESTIC OR FOREIGN, SHALL COMPLY WITH DIVISION
(B) OF SECTION 1702.41 of the Revised Code;
(B) The agreement shall set forth all statements and matters required by
section 1702.41 of the Revised Code, except that the statement of the place in
this state where the principal office of the surviving or new corporation is
to be located and the statement with respect to the appointment of the
statutory agent shall be set forth only if the surviving or new corporation is
to be a domestic corporation. In addition, the agreement shall set forth:
(1) The names of the states under the laws of which each constituent
corporation exists;
(2) All statements and matters required to be set forth in agreements of
merger or consolidation by the laws of each state under the laws of which any
constituent foreign corporation exists;
(3) If the surviving or new corporation is to be a foreign corporation:
(a) the place where the principal office of the surviving or new corporation
is to be located in the state under the laws of which the surviving or new
corporations is to exist;
(b) the consent by the surviving or new corporation that it may be sued and
served with process in this state in any proceeding for the enforcement of any
obligation of any constituent domestic corporation;
(c) the irrevocable appointment of the secretary of state of this state as
its agent to accept service of process in any such proceeding;
(d) if it is desired that the surviving or new corporation exercise its
corporate privileges in this state as a foreign corporation in a continual
course of transactions, a statement to that effect and a statement with
respect to the appointment of the statutory agent and with respect to the
consent to service of any process, notice, or demand upon such statutory agent
or the secretary of state, as required when a foreign corporation applies for
a certificate authorizing it to do so;
(C) The agreement may also set forth any additional provision permitted by
the laws of any state under the laws of which any constituent corporation
exists, to the extent not inconsistent with the laws of the state under the
laws of which the surviving or new corporation is to exist.
Sec. 1702.47. (A) A corporation may be dissolved
voluntarily in the manner provided in this section.
(B) A resolution of dissolution for a corporation shall
set forth:
(1) That the corporation elects to be dissolved;
(2) Any additional provision deemed necessary with respect
to the proposed dissolution and winding up.
(C) The trustees DIRECTORS may adopt a resolution of
dissolution in
the following cases:
(1) When the corporation has been adjudged bankrupt or has
made a general assignment for the benefit of creditors;
(2) By leave of the court, when a receiver has been
appointed in a general creditors' suit or in any suit in which
the affairs of the corporation are to be wound up;
(3) When substantially all of the assets have been sold at
judicial sale or otherwise;
(4) When the period of existence of the corporation
specified in its articles has expired.
(D) The voting members at a meeting held for such purpose
may adopt a resolution of dissolution by the affirmative vote of
a majority of the voting members present IN PERSON OR, IF PERMITTED, BY
MAIL OR BY PROXY, if a quorum is present
or, if the articles or the regulations provide or permit, by the
affirmative vote of a greater or lesser proportion or number of
the voting members, and by such affirmative vote of the voting
members of any particular class as is required by the articles or
the regulations. Notice of the meeting of the members shall be
given to all the members whether or not entitled to vote thereat.
(E) Upon the adoption of a resolution of dissolution, a
certificate shall be prepared, on a form prescribed by the secretary
of state, setting forth the following:
(1) The name of the corporation;
(2) A statement that a resolution of dissolution has been
adopted;
(3) A statement of the manner of adoption of such
resolution, and, in the case of its adoption by the trustees
DIRECTORS, a
statement of the basis for such adoption;
(4) The place in this state where its principal office is
or is to be located;
(5) The names and addresses of its trustees DIRECTORS and
officers;
(6) The name and address of its statutory agent.
(F) Such certificate shall be signed by any authorized officer, unless
the officer fails to execute and file such
certificate within thirty days after the
adoption of the resolution, or upon any date specified in the
resolution as the date upon which such certificate is to be
filed, or upon the expiration of any period specified in the
resolution as the period within which such certificate is to be
filed, whichever is latest, in which event the certificate of
dissolution may be signed by any three voting members and shall
set forth a statement that the persons signing the certificate
are voting members and are filing the certificate because of the
failure of the officers to do so.
(G) A certificate of dissolution, filed with the secretary
of state, shall be accompanied by:
(1) An affidavit of one or more of the persons executing
the certificate of dissolution or of an officer of the
corporation containing a statement of the counties, if any, in
this state in which the corporation has personal property subject
to personal property taxes or a statement that the corporation is
of a type required to pay personal property taxes to state
authorities only;
(2) A receipt, certificate, or other evidence showing the
payment of all personal property taxes accruing up to the date of
such filing, unless the affidavit provided for in division (G)(1) of this
section states that the corporation has in this state
no personal property subject to personal property taxes;
(3) A receipt, certificate, or other evidence from the
director of job and family
services showing that all contributions due
from the corporation as an employer have been paid, or that such
payment has been adequately guaranteed, or that the corporation
is not subject to such contributions;
(4) A receipt, certificate, or other evidence showing the
payment of all sales, use, and highway use taxes accruing up to
the date of such filing, or that such payment has been adequately
guaranteed;
(5) In lieu of the receipt, certificate, or other evidence
described in division (G)(2), (3), or (4) of this section, an
affidavit of one or more of the persons executing the certificate
of dissolution or of an officer of the corporation containing a
statement of the date upon which the particular department,
agency, or authority was advised in writing of the scheduled date
of the filing of the certificate of dissolution and was advised
in writing of the acknowledgement by the corporation of the
applicability of section 1702.55 of the Revised Code.
(H) Upon the filing of a certificate of dissolution and
such accompanying documents, the corporation shall be dissolved.
Sec. 1702.48. Following the filing of the certificate of dissolution, the
trustees DIRECTORS shall forthwith cause a notice of voluntary
dissolution to be
published once a week on the same day of each week for two successive weeks,
in a newspaper published and of general circulation in the county in which the
principal office of the corporation was to be or is located, and shall
forthwith cause written notice of dissolution to be given either personally or
by mail to all known creditors of, and to all known claimants against, the
dissolved corporation.
Sec. 1702.49. (A) When a corporation is dissolved
voluntarily or when the articles of a corporation have been
canceled or when the period of existence of a corporation
specified in its articles has expired, the corporation shall
cease to carry on its activities and shall do only such acts as
are required to wind up its affairs, or to obtain reinstatement
of the articles in accordance with section 1702.06, 1702.59, or
1724.06 of the Revised Code, or are permitted upon reinstatement
by division (C) of section 1702.60 of the Revised Code, and for
such purposes it shall continue as a corporation.
(B) Any claim existing or action or proceding PROCEEDING
pending by
or against the corporation or which THAT would have accrued
against it
may be prosecuted to judgment, with right of appeal as in other
cases, but any proceeding, execution, or process, or the
satisfaction or performance of any order, judgment, or decree,
may be stayed as provided in section 1702.50 of the Revised Code.
(C) Any process, notice, or demand against the corporation
may be served by delivering a copy to an officer, trustee
DIRECTOR,
liquidator, or person having charge of its assets or, if no such
person can be found, to the statutory agent.
(D) The trustees DIRECTORS of the corporation and their
survivors or
successors shall act as a board of trustees DIRECTORS in
accordance with
the regulations and bylaws until the affairs of the corporation
are completely wound up. Subject to the orders of courts of this
state having jurisdiction over the corporation, the trustees
DIRECTORS
shall proceed as speedily as is practicable to a complete winding
up of the affairs of the corporation and, to the extent necessary
or expedient to that end, shall exercise all the authority of the
corporation. Without limiting the generality of such authority,
they may fill vacancies, elect officers, carry out contracts of
the corporation, make new contracts, borrow money, mortgage or
pledge the property of the corporation as security, sell its
assets at public or private sale, make conveyances in the
corporate name, lease real estate for any term, including
ninety-nine years renewable forever, settle or compromise claims
in favor of or against the corporation, employ one or more
persons as liquidators to wind up the affairs of the corporation
with such authority as the trustees DIRECTORS see fit to grant,
cause the
title to any of the assets of the corporation to be conveyed to
such liquidators for that purpose, apply assets to the payment of
obligations, perform all other acts necessary or expedient to the
winding up of the affairs of the corporation, and, after paying
or adequately providing for the payment of all known obligations
of the corporation, distribute the remainder of the assets as
follows:
(1) Assets held upon condition requiring return, transfer,
or conveyance, which condition shall have occurred by reason of
the dissolution or otherwise, shall be returned, transferred, or
conveyed in accordance with such requirements;
(2) In the case of a charitable PUBLIC BENEFIT corporation:
(a) assets
held by it in trust for specified purposes shall be applied so
far as is feasible in accordance with the terms of the trust;,
(b) the remaining assets not held in trust shall be applied so far as
is feasible towards carrying out the purposes stated in its
articles;, (c) in the event and to the extent that, in the
judgment of the trustees DIRECTORS, it is not feasible to apply
the assets
as provided in above clauses (a) and (b), the assets shall be
applied as may be directed by the court of common pleas of the
county in this state in which the principal office of the
corporation is located, in an action brought for that purpose by
the corporation or by the trustees DIRECTORS or any thereof, to
which
action the attorney general of the state shall be a party, or in
an action brought by the attorney general in a court of competent
jurisdiction, or in an action brought as provided in section
1702.50 of the Revised Code for the purpose of winding up the
affairs of the corporation under the supervision of the court;
(3) In the case of a MUTUAL BENEFIT corporation other than a
charitable
corporation, any remaining assets shall be distributed in
accordance with the applicable provisions of the articles or the
regulations or, to the extent that no such provision is made, the
assets shall be distributed pursuant to a plan of distribution
adopted by the voting members at a meeting held for the purpose
of voting on dissolution, or any adjournment thereof, by the same
affirmative vote as that required for the adoption of a
resolution of dissolution. If no plan of distribution is so
adopted by the voting members, then said remaining assets shall
be distributed pursuant to a plan of distribution adopted by the
trustees DIRECTORS. IF NO PLAN OF DISTRIBUTION IS SO ADOPTED BY THE
VOTING MEMBERS OR DIRECTORS, THEN THE REMAINING ASSETS SHALL BE APPLIED AS MAY
BE DIRECTED BY THE COURT OF COMMON PLEAS OF THE COUNTY IN THIS STATE IN WHICH
THE PRINCIPAL OFFICE OF THE CORPORATION IS LOCATED, IN AN ACTION BROUGHT FOR
THAT PURPOSE BY THE MUTUAL BENEFIT CORPORATION OR BY THE DIRECTORS OR ANY
THEREOF, OR BY THE ATTORNEY GENERAL IN A COURT OF COMPETENT JURISDICTION, OR
IN AN ACTION BROUGHT AS PROVIDED IN SECTION 1702.50 of the Revised Code FOR THE PURPOSE OF
WINDING UP THE AFFAIRS OF THE CORPORATION UNDER THE SUPERVISION OF THE COURT.
(E) Without limiting the authority of the trustees DIRECTORS,
any
action within the purview of this section which THAT is
authorized or
approved by the voting members at a meeting held for such
purpose, by the same affirmative vote as that required for the
adoption of a resolution of dissolution, shall be conclusive for
all purposes upon all members of the corporation, except that
nothing herein set forth shall impair the jurisdiction of courts
of competent jurisdiction to enforce the duties of a charitable
PUBLIC BENEFIT
corporation in respect of the application of its assets towards
ITS PUBLIC OR charitable purposes, or impair the power of the state,
acting
through the attorney general, to require such assets to be
applied, as nearly as may be, towards ITS PUBLIC OR charitable
purposes.
(F) All deeds and other instruments of the corporation
shall be in the name of the corporation and shall be executed,
acknowledged, and delivered by the officers appointed by the
trustees DIRECTORS.
(G) At any time during the winding up of its affairs, the
corporation by its trustees DIRECTORS may make application to
the court of
common pleas of the county in this state in which the principal
office of the corporation is located to have the winding up
continued under supervision of the court, as provided in section
1702.50 of the Revised Code.
Sec. 1702.50. (A) Without limiting the generality of its
authority, the court of common pleas of the county in this state
in which is located the principal office of a voluntarily
dissolved corporation or of a corporation whose articles have
been canceled or whose period of existence has expired, upon the
complaint of the corporation, a majority of the trustees
DIRECTORS, or a
creditor or member, and upon such notice to all the trustees
DIRECTORS and
such other persons interested as the court considers proper, at
any time may order and adjudge in respect to the following
matters:
(1) The presentation and proof of all claims and demands
against the corporation and of all rights, interests, or liens in
or on any of its property; the fixing of the time within which
and the manner in which such proof shall be made and the person
to whom such presentation shall be made; and the barring from
participation in any distribution of assets of all persons
failing to make and present proofs as required by the order of
the court;
(2) The stay of the prosecution of any proceeding against
the corporation or involving any of its property, and the
requirement that the parties to it present and prove their
claims, demands, rights, interests, or liens at the time and in
the manner required of creditors or others; or the grant of leave
to bring or maintain an independent proceeding to enforce liens;
(3) The settlement or determination of all claims of every
nature against the corporation or any of its property; the
determination of the assets required to be retained to pay or
provide for the payment of such claims or any claim; the
determination of the assets available for distribution among
members and others; and the making of new parties to the
proceeding so far as the court considers proper for the
determination of all matters;
(4) The determination of the rights of members or others
in and to the assets of the corporation;
(5) The presentation and the filing of intermediate and
final accounts of the trustees DIRECTORS or of the liquidators
and hearings
on them; the allowance, disallowance, or settlement of such
accounts; and the discharge of the trustees DIRECTORS, the
liquidators, or
any of them from their duties and liabilities;
(6) The appointment of a special master commissioner to
hear and determine any such matters with such authority as the
court considers proper;
(7) The filling of any vacancies in the number of trustees
DIRECTORS
or liquidators when the trustees DIRECTORS are unable to act on
the
vacancies for want of a quorum or for any other reason;
(8) The appointment of a receiver, in accordance with the
usages of a court in equitable matters, to wind up the affairs of
the corporation, to take custody of any of its property, or for
any other purpose;
(9) The issuance or entry of any injunction or any other
order which THAT the court considers proper in the
administration of
the trust involved in the winding up of the affairs of the
corporation and the giving of notice of it;
(10) The allowance and payment of compensation to the
trustees DIRECTORS or any of them, to liquidators, to a
receiver, to the
attorney for the complainant, or to any person properly rendering
services beneficial to the corporation or to those interested in
it;
(11) The entry of a judgment or decree which THAT, if it so
provides, may operate as the deed or other instrument ordered to
be executed, or the appointment of a master to execute such deed
or instrument in the name of the corporation with the same effect
as if executed by an authorized officer pursuant to authority
conferred by the trustees DIRECTORS or the voting members of the
corporation, whenever there is no officer or agent competent to
execute such deed or instrument, whenever the corporation or its
officers do not perform or comply with a judgment or decree of
court, or whenever the court considers it proper.
(B) A judicial proceeding under this section concerning
the winding up of the affairs of a corporation is a special
proceeding, and final orders in the proceeding may be vacated,
modified, or reversed on appeal pursuant to the Rules of
Appellate Procedure and, to the extent not in conflict with those
rules, Chapter 2505. of the Revised Code.
Sec. 1702.51. (A) Whenever, after a corporation is dissolved voluntarily or
the articles of a corporation have been canceled or the the period of
existence of a corporation has expired, a receiver is appointed to wind up the
affairs of the corporation, all the claims, demands, rights, interests, or
liens of creditors, claimants, and members shall be determined as of the day
on which the receiver was appointed. Unless it is otherwise ordered, such
appointment vests in the receiver and his THE RECEIVER'S
successors the right to the
immediate possession of all the property of the corporation, which shall, if
so
ordered, execute and deliver conveyances of such property to the receiver or
his THE RECEIVER'S nominee.
(B) Any officer, trustee DIRECTOR, member, or other person,
whether a resident of the
state or a non-resident NONRESIDENT and however interested, may
be appointed as receiver.
(C) The receiver shall have all the authority vested in the trustees
DIRECTORS and
officers of the corporation, shall exercise such authority subject to such
orders as are made by the court, and may be required to qualify by giving bond
to the state in such amount as the court fixes, with surety to the
satisfaction of the clerk of the court, conditioned for the faithful discharge
of his THE RECEIVER'S duties and for a due accounting for all
money or property received by him THE RECEIVER.
Sec. 1702.52. (A) A corporation may be dissolved
judicially and its affairs wound up:
(1) By an order of the supreme court or of a court of
appeals in an action in quo warranto brought as provided by
sections 2733.02 to 2733.39 of the Revised Code, in which event
the court may order the affairs of the corporation to be wound up
by its trustees DIRECTORS as in the case of voluntary
dissolution, or by
proceedings in, and under the order of, the court of common pleas
of the county in this state in which the corporation has its
principal office;
(2) By an order of the court of common pleas of the county
in this state in which such corporation has its principal office,
in an action brought by voting members entitled to dissolve the
corporation voluntarily, when it is established:
(a) That its articles have been canceled or its period of
existence has expired and that it is necessary in order to
protect the members that the corporation be judicially dissolved;
(b) That the corporation is insolvent or is unable to
afford reasonable security to those who may deal with it and that
it is necessary in order to protect the creditors of the
corporation that the corporation be judicially dissolved;
(c) That the objects of the corporation have wholly failed
or are entirely abandoned or that their accomplishment is
impracticable;
(3) By an order of the court of common pleas of the county
in this state in which the corporation has its principal office,
in an action brought by a majority of the voting members, or such
lesser proportion or number of voting members as are entitled by
the articles to dissolve the corporation voluntarily, when it is
established that it is beneficial to the members that the
corporation be judicially dissolved;
(4) By an order of the court of common pleas of the county
in this state in which the corporation has its principal office,
in an action brought by one-half of the trustees DIRECTORS when
there is an
even number of trustees DIRECTORS or by one-half of the voting
members,
when it is established that the corporation has an even number of
trustees DIRECTORS who are deadlocked in the management of the
corporate
affairs and the voting members are unable to break the deadlock,
or when it is established that the corporation has an uneven
number of trustees DIRECTORS and that the voting members are
deadlocked in
voting power and unable to agree upon or vote for the election of
trustees DIRECTORS as successors to trustees
DIRECTORS whose terms normally would
expire upon the election of their successors.
(B) A complaint for judicial dissolution shall be verified
by any of the complainants and shall set forth facts showing that
the case is one of those specified in this section. Unless the
complainants set forth in the complaint that they are unable to
annex a list of members, a schedule shall be annexed to the
complaint setting forth the name of each member and his THE
MEMBER'S address if it is known.
(C) Upon the filing of a complaint for judicial
dissolution, the court with which it is filed shall have power to
issue injunctions, to appoint a receiver with such authority and
duties as the court from time to time may direct, to take such
other proceedings as may be necessary to protect the property or
the rights of the complainants or of the persons interested, and
to carry on the activities of the corporation until a full
hearing can be had. Upon or after the filing of a complaint for
judicial dissolution, the court, by injunction or order, may stay
the prosecution of any proceeding against the corporation or
involving any of its property and require the parties to it to
present and prove their claims, demands, rights, interests, or
liens, at the time and in the manner required of creditors or
others. The court may refer the complaint to a special master
commissioner.
(D) After a hearing had upon such notice as the court may
direct to be given to all parties to the proceeding and to any
other parties in interest designated by the court, a final order
based either upon the evidence, or upon the report of the special
master commissioner if one has been appointed, shall be made
dissolving the corporation or dismissing the complaint. An order
or judgment for the judicial dissolution of a corporation shall
contain a concise statement of the proceedings leading up to the
order or judgment; the name of the corporation; the place in this
state where its principal office is located; the names and
addresses of its trustees DIRECTORS and officers; the name and
address of a
statutory agent; and, if desired, such other provisions with
respect to the judicial dissolution and winding up as are
considered necessary or desirable. A certified copy of such
order forthwith shall be filed in the office of the secretary of
state, whereupon the corporation shall be dissolved. To the
extent consistent with orders entered in such proceeding, the
effect of such judicial dissolution shall be the same as in the
case of voluntary dissolution, and the provisions of sections
1702.49, 1702.50, and 1702.51 of the Revised Code relating to the
authority and duties of trustees DIRECTORS during the winding up
of the
affairs of a corporation dissolved voluntarily, with respect to
the jurisdiction of courts over the winding up of the affairs of
a corporation, and with respect to receivers for winding up the
affairs of a corporation shall be applicable to corporations
judicially dissolved.
(E) A judicial proceeding under this section concerning
the judicial dissolution of a corporation is a special
proceeding, and final orders in the proceeding may be vacated,
modified, or reversed on appeal pursuant to the Rules of
Appellate Procedure or the Rules of Practice of the Supreme
Court, whichever are applicable, and, to the extent not in
conflict with those rules, Chapter 2505. of the Revised Code.
Sec. 1702.521. (A) Upon the complaint of not less than
one-fourth of the trustees DIRECTORS of the corporation, the
court of
common pleas of the county in which the corporation maintains its
principal office may order the appointment of a provisional
trustee DIRECTOR for that corporation if the articles or
regulations of
the corporation expressly provide for such an appointment. No
appointment shall be made until a hearing is held by the court.
Notice of the hearing shall be given to each trustee DIRECTOR
and the
secretary of the corporation in any manner that the court
directs. The complainants shall establish at the hearing that,
because of irreconcilable differences among the existing
trustees DIRECTORS, the continued operation of the corporation
has been
substantially impeded or made impossible.
(B) A provisional trustee DIRECTOR shall have the same rights
and
duties as other trustees DIRECTORS and shall serve until removed
by the
appointing court or by the members of the corporation entitled to
exercise a majority of the voting power of the corporation in the
election of trustees DIRECTORS or until his THE
PROVISIONAL DIRECTOR'S
earlier resignation or death.
If the provisional trustee DIRECTOR dies or resigns, the court,
pursuant
to division (A) of this section, may appoint a replacement
provisional trustee DIRECTOR, upon its own motion and without
the filing
of a complaint for the appointment of a provisional trustee
DIRECTOR. If
the appointing court finds that the irreconcilable differences no
longer exist, it shall order the removal of the provisional
trustee DIRECTOR.
(C) No person shall be appointed as a provisional trustee
DIRECTOR
unless he THE PERSON is generally conversant with corporate
affairs, has no
legal or equitable interest in the obligations of the corporation
of which he THE PERSON is to be appointed a trustee
DIRECTOR, and is not
indebted to
such corporation. The compensation of a provisional trustee
DIRECTOR
shall be determined by agreement with the corporation for which
he THE PROVISIONAL DIRECTOR is serving, subject to the approval
of the appointing court,
except that the appointing court may fix his THE PROVISIONAL
DIRECTOR'S compensation in the
absence of agreement or in the event of disagreement between the
provisional trustee DIRECTOR and the corporation.
(D) A proceeding concerning the appointment of a
provisional trustee DIRECTOR of a corporation is a special
proceeding, and
final orders issued in the proceeding may be vacated, modified,
or reversed on appeal pursuant to the Rules of Appellate
Procedure and, to the extent not in conflict with those rules,
Chapter 2505. of the Revised Code.
Sec. 1702.53. (A) A copy of the articles or amended articles filed in the
office of the secretary of state, certified by the secretary of state, shall
be conclusive evidence, except as against the state, that the corporation has
been incorporated under the laws of this state; and a copy duly certified by
the secretary of state of any certificate of amendment or other certificate
filed in his THE SECRETARY OF STATE'S office shall be
prima-facie evidence of such amendment or
of the
facts stated in any such certificate, and of the observance and performance of
all antecedent conditions necessary to the action which such certificate
purports to evidence.
(B) A copy of amended articles filed in the office of the secretary of state,
certified by the secretary of state, shall be accepted in this state and other
jurisdictions in lieu of the original articles, amendments thereto, and prior
amended articles.
(C) The original or a copy of the record of minutes of the proceedings of the
incorporators of a corporation, or of the proceedings or meetings of the
members or any class of members, or of the trustees DIRECTORS,
or of any committee
thereof, including any written consent, waiver, release, or agreement entered
in such record or minutes, or the original or a copy of a statement that no
specified proceeding was had or that no specified consent, waiver, release, or
agreement exists, shall, when certified to be true by the secretary or an
assistant secretary of a corporation, be received in the courts as prima-facie
evidence of the facts stated therein. Every meeting referred to in such
certified original or copy shall be deemed duly called and held, and all
motions and resolutions adopted and proceedings had at such meeting shall be
deemed duly adopted and had, and all elections of trustees
DIRECTORS and all elections
or appointments of officers chosen at such meeting shall be deemed valid,
until the contrary is proved; and whenever a person who is not a member of a
corporation has acted in good faith in reliance upon any such certified
original or copy, it is conclusive in his THE PERSON'S favor.
Sec. 1702.54. (A) No officer, trustee DIRECTOR, employee, or
agent of a corporation
shall, either alone or with another or others, with intent to deceive:
(1) Make, issue, deliver, transmit by mail, or publish any prospectus,
report, circular, certificate, statement, balance sheet, exhibit, or document,
respecting membership rights in, or the activities, assets, liabilities,
earnings, or accounts of, a corporation, which THAT is false in
any material
respect, knowing the same to be false;
(2) Having charge of any books, minutes, records, or accounts of a
corporation, make therein any entry which THAT is false in any
material respect,
knowing such entry to be false, or remove, erase, alter, or cancel any entry
therein, knowing that the entries resulting therefrom will be false.
(B) Whoever violates this section shall be personally liable, jointly and
severally, with all other persons participating with him THE
PERSON in any such act, to
any person for any damage actually suffered and proximately resulting from
such act.
(C) No action to enforce a liability under this section shall be brought
after four years from the time of the act complained of.
(D) Remedies under this section are not exclusive of other remedies at common
law or under other statutes.
Sec. 1702.55. (A) The members, the trustees DIRECTORS, and the
officers of a corporation shall not be personally liable for any
obligation of the corporation.
(B) Trustees DIRECTORS who vote for or assent to:
(1) A distribution of assets to members contrary to law or
the articles;
(2) A distribution of assets to persons other than
creditors during the winding up of the affairs of the
corporation, on dissolution or otherwise, without the payment of
all known obligations of the corporation, or without making
adequate provision therefor;
(3) The making of loans, other than in the usual conduct
of its affairs or in accordance with provisions therefor in the
articles, to an officer, trustee DIRECTOR, or member of the
corporation;
shall be jointly and severally liable to the corporation as
follows: in cases under division (B)(1) of this section up to
the amount of such distribution in excess of the amount that
could have been distributed without violation of law or the
articles, but not in excess of the amount that would inure to the
benefit of the creditors of the corporation if it was insolvent
at the time of the distribution or there was reasonable ground to
believe that by such action it would be rendered insolvent, or to
the benefit of the members other than members of the class in
respect of which the distribution was made; and in cases under
division (B)(2) of this section, to the extent that such
obligations (not otherwise barred by statute) are not paid, or
for the payment of which adequate provision has not been made;
and in cases under division (B)(3) of this section, for the
amount of the loan with interest thereon at the rate of six per
cent per annum until such amount has been paid, provided, EXCEPT
that a
trustee DIRECTOR shall not be liable under division (B)(1) or
(2) of this
section if in determining the amount available for any such
distribution, he THE DIRECTOR in good faith relied on a
financial
statement of
the corporation prepared by an officer or employee of the
corporation in charge of its accounts or certified by a public
accountant or firm of public accountants, or in good faith he THE
DIRECTOR
considered the assets to be of their book value, or he THE
DIRECTOR followed
what he THE DIRECTOR believed to be sound accounting and
business
practice.
(C) A trustee DIRECTOR who is present at a meeting of the
trustees DIRECTORS
or a committee thereof at which action on any matter is
authorized or taken and who has not voted for or against such
action shall be presumed to have voted for the action unless his THE
DIRECTOR'S
written dissent therefrom is filed either during the meeting or
within a reasonable time after the adjournment thereof, with the
person acting as secretary of the meeting or with the secretary
of the corporation.
(D) A member who knowingly receives any distribution made
contrary to law or the articles shall be liable to the
corporation for the amount received by him which THE MEMBER THAT
is
in excess of
the amount which THAT could have been distributed without
violation of
law or the articles.
(E) A trustee DIRECTOR against whom a claim is asserted under
or
pursuant to this section and who is held liable thereon shall be
entitled to contribution, on equitable principles, from other
trustees DIRECTORS who also are liable; and in addition, any
trustee DIRECTOR
against whom a claim is asserted under or pursuant to this
section or who is held liable shall have a right of contribution
from the members who knowingly received any distribution made
contrary to law or the articles, and such members as among
themselves shall also be entitled to contribution in proportion
to the amounts received by them respectively.
(F) No action shall be brought by or on behalf of a
corporation upon any cause of action arising under division
(B)(1) or (2) of this section at any time after two years from
the day on which the violation occurs; provided that no such
action shall be barred by this division (F) prior to January 1,
1956.
(G) Nothing contained in this section shall preclude any
creditor whose claim is unpaid from exercising such rights as he THE
CREDITOR
otherwise would have by law to enforce his THE CREDITOR'S claim
against assets
of the corporation distributed to members or other persons.
Sec. 1702.58. (A) Except as provided in sections 1702.01 to 1702.58,
inclusive, of the Revised Code, the provisions of said THOSE
sections shall
apply
only to domestic corporations, and except as otherwise provided in this
section, the provisions of said THOSE sections shall apply to
all domestic
corporations, whether formed under said THOSE sections or under
previous laws of
this state.
(B) Special provisions in the Revised Code for the organization, conduct, or
government of designated classes of corporations shall govern to the exclusion
of the provisions of sections 1702.01 to 1702.58, inclusive, of the
Revised
Code, on the same subject, except where it clearly appears that a
special
provision is cumulative, in which case it THAT PROVISION and the
provisions of said THOSE sections
on the same subject shall apply.
(C) A corporation incorporated prior to June 9, 1927, with authority to issue
shares may continue to issue and re-issue REISSUE shares in
accordance with its
articles, but shall be without authority to amend its articles in order to
increase the authorized number of shares.
(D) A corporation created before September 1, 1851, which THAT
(1) has expressly
elected to be governed by the laws passed since that date, (2) subsequent to
that date has taken such action under laws then in effect as to make it
subject, as a matter of law, to the Constitution of 1851 and laws passed
thereunder, or (3) subsequent to October 1, 1955, takes any action under
sections 1702.01 to 1702.58, inclusive, of the Revised Code, or any of
them,
which THAT but for said THOSE sections it would
not be authorized to take, shall be
deemed to be a corporation exercising its corporate privileges under the
Constitution of this state and the laws passed in pursuance thereof, and not
otherwise.
(E) A corporation created before September 1, 1851, and actually carrying on
its activities in this state, and which prior to October 11, 1955, has
not
taken action described in division (D) of this section, may accept the
provisions of sections 1702.01 to 1702.58, inclusive, of the Revised
Code, at
a meeting of voting members held for such purpose, by a resolution to that
effect adopted by the affirmative vote of a majority of the voting members
present IN PERSON OR, IF PERMITTED, BY MAIL OR BY PROXY, if a
quorum is present, and by filing in the office of the secretary
of
state a copy of said THE resolution certified by the
president or a vice-president
and the secretary or an assistant secretary ANY AUTHORIZED OFFICER
of the corporation, for which
filing the secretary of state shall charge and collect a fee of five dollars.
Thereafter said THE corporation shall be deemed to exercise its
corporat
CORPORATE privileges under the Constitution of this state and the laws
passed
in
pursuance thereof, and not otherwise.
(F) Except as provided in divisions (D) and (E) of this section, a
corporation created before September 1, 1851, shall be governed by the laws
in force on that date as modified since that date.
(G) A domestic BUSINESS corporation for profit, upon compliance
with the provision of
the Revised Code as in effect from time to time relating to such
BUSINESS corporation's
becoming a nonprofit corporation upon amendment to its articles or upon
adoption of amended articles, as provided by law, shall, upon filing the
prescribed certificate in the office of the secretary of state, become a
corporation subject to the provisions of, and entitled to all the rights,
privileges, immunities, powers, franchises, and authority granted by,
sections
1702.01 to 1702.58, inclusive, of the Revised Code THIS CHAPTER.
Sec. 1702.59. (A) Every nonprofit corporation, incorporated
under the general corporation laws of this state, or previous
laws, or under special provisions of the Revised Code, or created
before September 1, 1851, which corporation has expressedly or
impliedly elected to be governed by the laws passed since that
date, and whose articles or other documents are filed with the
secretary of state, shall file with the secretary of state a
verified statement of continued existence, signed by a trustee
DIRECTOR,
officer, or three members in good standing, setting forth the
corporate name, the place where the principal office of the
corporation is located, the date of incorporation, the fact that
the corporation is still actively engaged in exercising its
corporate privileges, and the name and address of its agent
appointed pursuant to section 1702.06 of the Revised Code.
(B) Each corporation required to file
a statement of continued existence shall file it
with the secretary of state within each five years after the date of
incorporation or of the last corporate filing. For filing such statements of
continued existence, the secretary of state shall charge and collect a fee of
five dollars.
(C) Corporations specifically exempted by division (N) of
section 1702.06 of the Revised Code, or whose activities are
regulated or supervised by another state official, agency,
bureau, department, or commission are exempted from this section.
(D) The secretary of state shall give notice in writing and
provide a form for compliance with this section to each
corporation required by this section to file the statement of
continued existence, such notice and form to be mailed to the
last known address of the corporation as it appears on the
records of the secretary of state or which the secretary of
state may ascertain upon
a reasonable search.
(E) In the event any nonprofit corporation required by this
section to file a statement of continued existence fails to file
the statement required every fifth year, then the secretary
of state shall cancel the articles of such corporation, make a
notation of the cancellation on the records, and mail to the
corporation a certificate of the action so taken.
(F) A corporation whose articles have been canceled may be
reinstated by filing an application for reinstatement and paying
to the secretary of state a fee of ten dollars. The name of a corporation
whose articles have been canceled shall be reserved for a period of one year
after the date of cancellation. If the
reinstatement is not made within one year from the date of the
cancellation of its articles of incorporation and it appears that
a corporate name, limited liability company
name, limited liability partnership name, limited partnership name, or trade
name has been filed, the name of which is not distinguishable
upon the record as provided in section 1702.06 of the Revised Code, the applicant
for reinstatement shall
be required by the secretary of state, as a condition
prerequisite to such reinstatement, to amend its articles by
changing its name. A certificate of reinstatement may be filed
in the recorder's office of any county in the state, for which
the recorder shall charge and collect a fee of one dollar. The rights,
privileges, and franchises of a corporation whose articles have been
reinstated are subject to section 1702.60 of the Revised Code.
(G) The secretary of state shall furnish the tax commissioner a
list of all corporations failing to file the required statement of
continued existence.
Section 2. That existing sections 1701.01, 1702.01, 1702.02, 1702.03,
1702.04, 1702.05, 1702.06, 1702.07, 1702.08, 1702.10, 1702.11, 1702.12,
1702.13, 1702.14, 1702.15, 1702.16, 1702.17, 1702.18, 1702.19,
1702.21, 1702.22, 1702.23, 1702.25, 1702.26, 1702.27, 1702.28,
1702.29, 1702.30, 1702.301, 1702.31, 1702.32, 1702.33, 1702.34,
1702.36, 1702.38, 1702.39, 1702.41, 1702.42, 1702.44, 1702.45,
1702.47, 1702.48, 1702.49, 1702.50, 1702.51, 1702.52, 1702.521,
1702.53, 1702.54, 1702.55, 1702.58, and 1702.59 of the Revised
Code are hereby repealed.
Section 3. Any trustee of a nonprofit corporation that was organized prior to
the effective date of this act shall be considered a director, as defined in
division (K) of section 1702.01 of the Revised Code as amended by this act, of
the nonprofit corporation and shall have the rights, privileges, and
responsibilities of a director of a nonprofit corporation under Chapter 1702.
of the Revised Code. A nonprofit corporation that was organized prior to the
effective date of this act is not required to take any action to convey these
rights, privileges, and responsibilities of directors to the trustees of the
nonprofit corporation.
Section 4. The General Assembly hereby declares that the General Assembly, by
enacting any provision of this act, does not intend to repeal any provision
of sections 109.34, 109.35, and 109.99 of the Revised Code.
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