Issue link: http://viewer.e-digitaledition.com/i/748338
OHIO SENATE BILL 181 ("SB 181"), executed April 5, 2016 a nd effective July 5, 2016 ma kes several substantive changes to the Ohio Revised Code, Chapters 1701 (Ohio Corporation Law) a nd 1705 (Ohio Limited Liability Law). SB 181 attempts to eliminate ambig uity regarding the f iducia r y duties of corporate off icers for Ohio Cor porations a nd ma na gers, members, a nd off icers of Ohio Limited Liability Compa nies. The Ohio legislatures una nimously passed SB 181 as it establishes a more conducive statutory fra mework for conducting business in Ohio. OHIO CORPORATION L AW Corporate Off icers' f iducia r y duties a nd f idu- cia r y liabilit y sta nda rds now mirror those of the directors. Newly added Section 1701.641 provides that a n off icer must perform his or her duties "in good fa ith, in a ma nner the off icer reasonably believes to be in or not opposed to the best interests of the corporation, a nd with the ca re that a n ordina rily prudent per son i n a l i ke posit ion wou ld u se u nder simila r circumsta nces." OHIO LIMITED LIABILIT Y L AW There were three distinct cha nges to Chapter 1705 under the Ohio Revised Code: (1) acknowl- ed g ment t hat L LCs may have of f icers a nd t hat t hey have t he sa me f iducia r y duties a s corporate off icers; (2) remova l of the default rule requiring a member to not compete with the LLC; (3) provide the ma ximum effect to the freedom of contract a nd the enforceabilit y of operating ag reements by a llowing operating agreement to "modif y, wa ive, or eliminate the dut y of loya lt y, dut y of ca re or both for one or more members, ma nagers, or off icers." Ohio business ow ners should rev isit their gover n i ng docu ment s to ensu re t hat t hese ag reements a re best suited for owners. NOT E: T hi s ge n e ral s umm ar y of th e law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice. Lucas Murray is an attorney with the law firm of Krugliak, Wilkins, G riffiths & Dougherty Co., LPA , in Canton , OH. ■ LEGISLATIVE UPDATES to the Ohio Corporation Law and Limited Liability Act BY LUCAS W. MURRAY, ESQ. 2 4 2 4❱❱❱❱❱ L E G A Lœ E A S E