Senate Bill 98, effective October 24, 2024, amends the law regarding fraudulent filings, statutory agents, and reinstatement.
House Bill 301, effective October 24, 2024, amends the nonprofit corporation law regarding director qualifications and duties, director and officer liability, certificates of good standing, and amendments; and amends the corporation law regarding dissolution.
House Bill 276, effective February 11, 2022, enacts the Ohio Revised Limited Liability Company Act. The Revised Act governs all LLCs formed or registered to do business in Ohio on or after February 11, 2022 as well as all LLCs formed or registered before that date. The previous LLC Act is repealed on the effective date.
House Bill 110 delays the effective date of the Ohio Revised Limited Liability Company Act from January 1, 2022 to February 11, 2022. The new LLC law will now govern all domestic and foreign LLCs on February 11, 2022. (See amendment to Sec 1706.83)
Senate Bill 21, effective March 18, 2021, amends the Ohio corporation law to authorize benefit corporations. A benefit corporation is defined as a corporation that sets forth in its articles of incorporation one or more beneficial purposes among the purposes for which the corporation is formed. "Beneficial purpose" means seeking to have a bona fide positive effect or to reduce one or more bona fide negative effects of an artistic, charitable, cultural, economic, educational, environmental, literary, medical, religious, scientific, or technological nature for the benefit of persons, entities, communities, or interests other than shareholders in their capacity as shareholders.
An existing corporation can become a benefit corporation by amending its articles of incorporation. However a corporation that has issued and has outstanding shares listed on a national securities exchange or regularly quoted in an over-the-counter market by one or more members of a national or affiliated securities association cannot amend its articles to add a beneficial purpose.
Case summaries
Attorney-Client Privilege
In Re: FirstEnergy Corporation, No. 24-3654, decided October 3, 2025. The U.S. Court of Appeals, Sixth Circuit held that documents that were the fruits of internal corporate investigations were subject to the attorney-client privilege and work product doctrine. The case involved a corporation involved in a bribery scheme with Ohio’s former House Speaker. After the Justice Department unsealed the criminal complaint against the former House Speaker and issued subpoenas to the corporation, the corporation and its board of directors retained separate outside counsel to conduct internal investigations. Several lawsuits followed. The plaintiffs in this class brought a securities class action and sought access to the fruits of the internal investigations. The district court ordered production.
The Sixth Circuit, in vacating the production order, noted that the corporation and board hired the law firms to secure legal advice through the internal investigations into the corporation’s potential wrongdoing, and the attorney-client privilege applies when a corporation seeks legal advice to assess risks as to its civil and criminal liability. The district court had found that the attorney-client privilege didn’t apply because the corporation used the fruits of the investigation to make business decisions. However, the Sixth Circuit pointed out that what matters is that the corporation sought legal advice, not what it did with that advice.
The court also found that the work product doctrine, which applies to documents prepared in anticipation of litigation, applied here. After the criminal complaint was released and after the stock price dropped dramatically, the corporation anticipated, correctly, that it would face government investigations and civil and criminal proceedings. That expectation prompted the internal investigations.
What Constitutes Doing Business
ProMac Techs., LLC v. Fabrication Automation, LLC, 2021 Ohio 4272, decided December 8, 2021. The Ohio Court of Appeals held that a Florida LLC that exchanged numerous emails with an Ohio company that resulted in a contract in which the Florida LLC would procure the sales of products to Ohio customers was doing business in Ohio and therefore required to register to do business. The fact that the contract did not have an end date further indicated the permanent, continuous, and regular nature of the business relationship.
Suit by LLC Member
Blank v. Bluemile, Inc., 2021 Ohio 2002, decided June 15, 2021. The Ohio Court of Appeals held that the Ohio Supreme Court’s decision in Crosby v. Beam, in which the court held that a minority shareholder in a close corporation could bring a direct action against the directors for breach of fiduciary duty did not apply to a case in which an LLC member sought to bring a direct action for unjust enrichment against majority members. Therefore, the LLC member lacked to standing to bring a direct action.
Extension of Voluntarily Dissolved Corporation’s Existence
Cuyahoga County Case Management v. Clark Industrial Insulation Co., 2021 Ohio 1405, decided April 22, 2021. The Ohio Court of Appeals held that the trial court located in the county in which a voluntarily dissolved corporation’s principal office was located as set forth in its articles of incorporation lacked the authority to extend the period of time in which the corporation could continue for winding up purposes. Instead, it was the county listed in the corporation’s certificate of dissolution filed with the Secretary of State that had the authority to extend the period.
Business Judgment Rule
Reister v. Gardner, 2020 Ohio 5484, decided December 3, 2020. The Ohio Supreme Court ruled that the Court of Appeals erred when it held the litigation privilege shielded the business decisions made by directors regarding corporate litigation. The court distinguished the litigation privilege - which protects participants in litigation from suits over statements made during litigation, with the business judgment rule - which provides deference to decisions by the board while managing the corporation, including decisions regarding litigation.
Fictitious Name
Red Foot Racing Stables v. Brewer, 2020 Ohio 5201, decided November 5, 2020. The Ohio Court of Appeals upheld the dismissal of a lawsuit filed by a horse racing stable based on the Ohio statute stating that no person doing business under a fictitious name shall commence or maintain an action in the fictitious name or on account of any contracts made or transactions had in the fictitious name until it has registered the fictitious name with the Secretary of State. The court rejected the plaintiff’s argument that the registration requirement does not apply to horse racing stables.
Effect of Becoming Limited Liability Partnerships
810 Properties VIII LLP v. Sukenik, No. 108922, decided April 23, 2020. The Ohio Court of Appeals held that two limited liability partnerships had standing to enforce partnership agreements entered into before filing their statements of qualification to become limited liability partnerships. The filing of the statements of qualification did not create new partnerships. The partnerships continued to be the same entities as before the filings.
Other notices
There are no new notices at this time.