CLIENT ALERT – Changes in Ohio Limited Liability Company Law
Ohio’s Limited Liability Company law, as it exists in Ohio Revised Code (“ORC”) Section 1705 (the “Original Act”), was originally enacted in 1994. On January 8, 2021, Governor Mike DeWine signed into law a new scheme of regulations governing limited liability companies (“LLCs”) in Ohio. The new scheme does not simply amend prior Section 1705, but it will completely replace it with ORC Section 1706 (the “Revised LLC Act”). The intent of the Revised LLC Act is to modernize aspects of the Original Act by using the regulations found in the American Bar Association’s Revised Prototype Limited Liability Company Act as a guide, while retaining some of the provisions and terms of the Original Act for convenience. Because of the retention of many of the key provisions and terms of the Original Act, LLCs existing before the application of the Revised LLC Act will continue to be recognized as valid, and LLCs’ documents will also continue to be valid and enforceable; however, many LLCs may benefit from taking advantage of the new rules contained in the Revised LLC Act, which may be accomplished by amending their current documentation once the Revised LLC Act becomes effective. The Revised LLC Act will become effective February 11, 2022. Please download the document below for a brief outline of some of the pertinent changes.