State Senator Larry Obhof (R-Medina) recently introduced Senate Bill 181, legislation which will improve Ohio’s corporate law and eliminate current ambiguities by defining the responsibilities of corporate officers. The bi-partisan bill is jointly sponsored with Senate Minority Leader Joe Schiavoni (D-Boardman).
“Current law is ambiguous and fails to define the duties of corporate officers,” Obhof said. “This bill will bring clarity to the corporate code and will set forth the duties and responsibilities of the officers who make important business decisions for Ohio companies.”
SB 181 creates a new section within the Ohio Revised Code to outline the default fiduciary duties of corporate officers. The responsibilities of corporate directors are already defined in existing law, but no criteria are currently established for officers. If enacted, the legislation would establish identical responsibilities for officers to those already outlined for directors.
Among other things, the bill would require corporate and limited liability company officers to act in good faith and act with care in the performance of their duties. SB 181 would also declare that it is the policy of Ohio’s Limited Liability Company Law to give maximum effect to freedom of contract. Senate Bill 181 received its first hearing in June and received positive support from the Ohio State Bar Association.
“Senate Bill 181 will be a good step forward,” Obhof said. “The bill’s emphasis on providing for maximum freedom of contract will make Ohio a more attractive place to do business.”