Legislation developed and recommended by the OSBA Corporation Law Committee was recently introduced in the Ohio Senate.
(R-Chagrin Falls) would provide a new option for incorporating a business in Ohio that will appeal to those not only seeking to make a profit, but also looking to make a difference in society.
Unlike a traditional for-profit corporation, a benefit corporation would indicate in its articles of incorporation a goal to pursue one or more beneficial purposes in addition to the other legal purposes for which it was formed. This could include any purpose -- artistic, charitable, cultural, economic, educational, environmental, literary, medical, religious, scientific or technological (you name it!) -- having a beneficial effect on people, entities, communities, or interests other than shareholders in their capacity as shareholders.
In claiming a beneficial purpose in its organizational documents, a benefit corporation and its directors would be protected from liability to potential beneficiaries -- in other words, a benefit corporation would not obtain extra legal protections, but would certainly not be subject to extra liabilities for seeking to do good. It's important to note that as for-profit corporations, benefit corporations would not receive any special government incentives to operate for a beneficial purpose, such as the special tax treatment non-profits enjoy.
More than 30 other states allow for this option, with many others considering it; however the Corporation Law Committee designed Ohio's legislation to provide more flexibility -- adaptable to any size of corporation, form of business model or type of socially and/or environmentally beneficial purpose. Where some state laws require each benefit corporation to produce an annual report describing how and to what extent the corporation has accomplished its beneficial purpose, SB 205 would allow shareholders to determine what, if any, public reporting they would like to engage in (perhaps as a means of attracting investors to whom the cause is important). As with other corporations, benefit corporations would be required to produce annual financial statements for shareholders, and shareholders would still be entitled to examine the books and records of the corporation.
SB 205 will be among the OSBA priority bills to track in the weeks ahead and we look forward to working with Senator Dolan to see it passed into law. We'll keep you posted on its progress.Secretary of State Releases Ohio Electronic and Online Notarization Standards
You may not have heard a lot about it, but a provision inserted in the state budget bill (HB 49
) would allow for online or electronic notarization in Ohio. The provision took effect on Sept. 29, but don’t get too comfortable with this language. Although, e-notarization is expected to be available in Ohio, this provision is likely to get repealed in the very near future in favor of a more comprehensive notary reform bill. In the meantime, the Ohio Secretary of State's office has provided some guidance on its website: Ohio Electronic and Online Notarization Standards
. Specific questions can be directed to OSBA Director of Policy and Government Affairs Todd Book (firstname.lastname@example.org
) or to the Secretary of State's office
. We'll keep you posted on any related legislative developments.Tracking OSBA Legislation
As always, track OSBA priority bills via the Legislative
section at www.OhioBar.org
The House and Senate both have scheduled voting sessions for Oct. 11 and the Senate has an "if needed" day slated for Oct. 10.
In addition, the House Ways and Means Committee is expected to hold a second hearing on House Bill 292
, OSBA priority legislation conceived by the Taxation Law Committee and sponsored by Representative Gary Scherer (R-Circleville) that would bring much-needed clarity back to Ohio's bright-line residency test for tax purposes. You can read more about HB 292 in a previous weekly report
. The OSBA will be testifying as a proponent.