Ohio Revised Limited Liability Act: Effective February 11, 2022

Submitted by UCS on February 8, 2022

From the Desk of the Ohio Secretary of State:

The Ohio Revised Limited Liability Company Act (LLC Act) will be applicable to all Ohio limited liability companies on February 11, 2022. The LLC Act replaces the existing Chapter 1705 of the Ohio Revised Code with Chapter 1706 of the Ohio Revised Code.

Due to the changes in the law, the Secretary of State’s office has drafted new filing forms and will be updating the Ohio Business Central filing system. For example, the business services office began designating limited liability companies as for profit or nonprofit back in 2008. The new LLC Act clarifies that limited liability companies may be formed for either purpose, but the office will now designate all entities as limited liability companies without an additional designation to indicate the purpose. These new forms cannot be submitted for filing until February 11, 2022.

Business owners may review the LLC Act(opens in a new window) and/or seek legal counsel to consider any impact on their organization from changes including, but not limited to:

Cancellation for the Failure to Maintain a Statutory Agent
The new LLC Act requires the limited liability company to maintain a statutory agent in Ohio. Upon failure of a limited liability company to continuously maintain a statutory agent or file a change of name or address of a statutory agent, our office must notify the entity of this failure. If the agent information is not updated within 30 days, then our office will cancel the limited liability company’s registration. The entity may file a reinstatement and appointment of agent (Form 525A) to return to an active status.

Transacting Business without Registration
Under the current law, an unregistered limited liability company does not owe a penalty for failing to register with the Ohio Secretary of State, but the entity is prevented from maintaining a lawsuit in Ohio. The new LLC Act now imposes a fine if the limited liability company fails to properly register with the Secretary of State. Further, the new LLC Act grants the Ohio Attorney General the authority to bring action against a limited liability company for failure to register and the action may result in an injunction against the entity, court costs, and interest due.

Formation of Series LLCs
The new LLC Act permits the formation of Series LLCs in Ohio. Articles of Organization may specifically allow for series. Each series, in its own name, may enter into contracts; sue or be sued; hold and convey title to assets of the series, including real property, personal property, and intangible property; grant liens and security interests in assets of the series. This structure provides liability protection to each series, as assets owned by one series are shielded from the risk of liability of others within the same series LLC.

Management Structure and Authority
The new LLC Act eliminates the distinction between member-managed and manager-managed limited liability companies. A person’s ability to act as an agent, and bind the limited liability company, can be authorized by either the operating agreement; decisions of members in accordance with the operating agreement; a Statement of Authority (Form 613) filed with the secretary of state’s office; or the LLC Act’s default rules.

Filing Form Changes
The current filing forms used by limited liability companies (Articles of Organization 533A, Registration of a Foreign LLC 533B, Certificate of Amendment/Restatement 543A, Certificate of Correction 543B and Dissolution/Cancellation 562) will not be accepted by the Secretary of State on or after February 11, 2022. The new forms will be required to be used for LLC formation and updates.