Business Lawyers in Columbus, Ohio
By Andrew D. Randol - November 9, 2019 - Corporate & Business
If your business is a corporation, you should be aware of the requirements that the Ohio Revised Code imposes upon the structure of your business. In this latest thinking post, our business attorney in Columbus Ohio outlines whether your corporation needs a board of directors, a president, a treasurer, and a secretary. After discussing these general requirements, our Columbus corporate lawyer will explain how your corporation can get around some of these requirements with a close corporation agreement, which many small businesses prefer to do.
Ohio Revised Code 1701.56 requires that your corporation has at least one director. However, you can opt to have as many as you want. The number of directors your corporation chooses to have must be stated in the articles of incorporation or the corporate regulations. Generally, directors are to be elected by the shareholders, and in turn, directors elect and appoint officers of the corporation.
In terms of officers, Ohio Revised Code 1701.64 requires a corporation to have a president, a secretary, and a treasurer. In addition, one or more vice-presidents can be named, but none are required. The people named as officers can also be directors. Small businesses can take solace in the fact that one person can hold two or more offices. Thus, one person can simultaneously serve as a director, president, secretary, and treasurer of the corporation. However, absent a close corporation agreement, if one person does hold two or more offices, this person cannot execute, acknowledge, and verify any instrument in more than one capacity if such instrument is required by law, the articles, or regulations to be executed, acknowledged, or verified by two or more officers.
For small businesses, the idea of electing directors who then elect officers may seem like an unnecessary hassle. The good news is your corporation can dispense of some of these basic corporate governance requirements in a close corporation agreement.
Ohio Revised Code 1701.591 allows a corporation to adopt a close corporation agreement which may eliminate the requirement that your corporation have a board of directors. Rather than have a board of directors that elects the officers, the officers can simply be listed in the close corporation agreement. If one person is named as present, secretary, and treasurer, the close corporation can provide that this one person can execute, acknowledge, and verify any instrument in more than one capacity. The close corporation agreement can also dispense with other formalities that are often a nuisance to small businesses, such as dispensing with the annual shareholder meeting.
A close corporation agreement must be signed by all of the shareholders of the corporation and must be included in either the articles of incorporation or the regulations. If the close corporation agreement is not included in the articles or regulations, then it must be entered into the record of minutes of proceedings of shareholders.
Because many small corporations are owned by one or a handful of people, our Columbus business law lawyer recommends that small businesses opt to adopt a close corporation agreement and dispense with having a board of directors and annual shareholder meetings. Our Columbus business attorney is experienced in representing businesses of all sizes and understands your needs as a small business.
Please contact our business law attorney in Columbus, Ohio to find out how we can help you with your business needs.