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Ohio Modernizes and Improves its Laws Governing Limited Liability Companies

Client Alert
February 17, 2022

Effective Feb. 11, 2022, the Ohio Revised Limited Liability Company Act (“Revised Act”) now governs all limited liability companies formed under Ohio law. The law updates and replaces the existing LLC Act and has important implications for business owners in Ohio. Passage of the Revised Act makes Ohio one of only 16 states that permits the formation of “Series” LLCs. The legislation is intended to be one of the most progressive LLC acts in the country, but retains the terminology used in Ohio’s current LLC act. A summary of important changes is provided below.

Governance of Ohio LLCs

The Revised Act grants LLC members more control over conducting the LLC’s affairs. The Revised Act eliminates the distinction between member-managed and manager-managed LLCs and allows members of an LLC to organize their business as they see fit. The LLC’s governance structure may be set forth in the operating agreement or by decision of the members in accordance with the operating agreement. Under the Revised Act, LLCs may implement a structure similar to for-profit corporation governance, such as a board of directors.

‘Series’ LLCs Permitted in the Revised Act

The Revised Act makes asset protection simpler and more flexible for Ohio investors. The Revised Act reduces shared liability among multiple properties or assets because of its acceptance of Series LLCs. A Series LLC creates one “parent” LLC and several "children" sub-LLCs among which to split assets. Practically, if one of the sub-series LLCs gets sued, the assets held by the other children sub-LLCs and the parent LLC are shielded from any shared liability. While investors obtain the same asset protection that comes with using multiple, traditional LLCs, in a Series LLC model, only one parent LLC is opened. Assets owned by one Series are shielded from the risk of liability of others within the same Series LLC. 

Practically, a Series LLC structure is useful in a limited set of circumstances.  Real estate investors are primary users of Series LLCs because of the ease and applicability of Series LLCs to investment property portfolios. Rather than creating multiple companies to own investment property, each Series LLC adds inherent investment protection by isolating one property from the others.

Cancellation for Failure to Maintain Statutory Agent

The Revised Act also imposes statutory penalties on LLCs that fail to maintain (or fail to update) their statutory agent’s name and address. The Revised Act directs the Secretary of State to cancel an LLC’s registration, after providing the LLC with notice and a 30-day opportunity to cure. The Revised Act provides for the ability to reinstate a cancelled LLC by submitting the appropriate form and paying a fee.

Cost and Tax Benefits

The Revised Act has strong cost and tax benefits, too. For example, investors will pay fewer registration fees for multiple LLCs when using the Series LLC model. Additionally, only one federal employer identification number is needed for a Series LLC and each sub-series is listed on one singular tax return.

The incorporation of Series LLCs into state law represents a noteworthy change in the law pertaining to limited liability companies in Ohio. To ensure compliance with the Revised Act, to examine how the Series LLC may benefit your business, or for strategic planning for your business, contact Brandon Pauley, btpauley@bmdllc.com or 614-246-7510 or any member of the BMD Business Law team.

Ohio Revised Limited Liability Company Actllcsohiorevised actBrandon Pauley
Client Alert

The Masks Are Back: New OSHA Regulations for Healthcare Employers

June 11, 2021Employment Law After Hours is back with a News Break Episode. Yesterday, OSHA published new rules for healthcare facilities, including hospitals, home health employers, nursing homes, ambulance companies, and assisted living facilities. These new rules are very cumbersome, requiring mask wearing for all employees, even those that are vaccinated. The only exception is for fully vaccinated employees (2 weeks post final dose) who are in a "well-defined" area where there is no reasonable expectation that any person with suspected or confirmed COVID-19 will be present.Client Alert

New OSHA Guidance for Workplaces Not Covered by the Healthcare Emergency Temporary Standard

June 11, 2021On June 10, 2021, OSHA issued an Emergency Temporary Standard (ETS) for occupational exposure to COVID-19, but it applies only to healthcare and healthcare support service workers. For a detailed summary of the ETS applicable to the healthcare industry, please visit https://youtu.be/vPyXmKwOzsk. All employers not subject to the ETS should review OSHA’s contemporaneously released, updated Guidance on Mitigating and Preventing the Spread of COVID-19 in the Workplace. The new Guidance essentially leaves intact OSHA’s earlier guidance, but only for unvaccinated and otherwise at-risk workers (“at-risk” meaning vaccinated or unvaccinated workers with immunocompromising conditions). For fully vaccinated workers, OSHA defers to CDC Guidance for Fully Vaccinated People, which advises that most fully vaccinated people can resume activities without wearing masks or physically distancing, except where required by federal, state, or local laws or individual business policies.Client Alert

Employer Liability for COVID-19 Vaccine Side Effects

June 9, 2021As employers encourage or require employees to obtain a COVID-19 vaccine, they should be aware of OSHA recording obligations and potential workers’ compensation liability. Though OSHA has yet to revise its COVID-19 guidance in response to the latest CDC recommendations, OSHA has revised its position regarding the recording of injury or illness resulting from the vaccine. Until now, OSHA required an employer to record an adverse reaction when the vaccine was required for employees and the injury or illness otherwise met the recording criteria (work-related, a new case, and meets one or more of the general recording criteria). OSHA has reversed course and announced that it will not require recording adverse reactions until at least May 2022, irrespective of whether the employer requires the vaccine as a condition of employment. In its revised COVID-19 FAQs, OSHA states:Client Alert

The New Rule 1.510 - Radical Change for Summary Judgement Procedure in Florida

June 8, 2021In civil litigation, where both sides participate actively, trial is usually required at the end of a long, expensive case to determine a winner and a loser. In federal and most state courts, however, there are a few procedural shortcuts by which parties can seek to prevail in advance of trial, saving time, money and annoyance. The most common of these is the “motion for summary judgment”: a request to the court by one side for judgment before trial, generally on the basis that the evidence available reflects that a win for that party is legally inevitable and thus required. Effective May 1, 2021, summary judgment procedure in Florida has radically changed.Client Alert

Vacating, Modifying or Correcting an Arbitration Award Under R.C. 2711.13: Three-Month Limitation Maximum; Not Guaranteed Amount of Time

June 8, 2021In a recent decision, the Supreme Court of Ohio held that neither R.C. 2711.09 nor R.C. 2711.13 requires a court to wait three months after an arbitration award is issued before confirming the award. R.C. 2711.13 provides that “after an award in an arbitration proceeding is made, any party to the arbitration may file a motion in the court of common pleas for an order vacating, modifying, or correcting the award.” Any such motion to vacate, modify, or correct an award “must be served upon the adverse party or his attorney within three months after the award is delivered to the parties in interest.” In BST Ohio Corporation et al. v. Wolgang, the Court held the three-month period set forth in R.C. 2711.13 is not a guaranteed time period in which to file a motion to vacate, modify, or correct an arbitration award. 2021-Ohio-1785.
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