ORC Sections 1706.76 – 1706.7613 of the new chapter authorize the formation of “series LLCs” and govern their operation. It was born out of the creative efforts of legal professionals responding to early LLC statutes and therefore can be cumbersome to organize since it was not originally contemplated by LLC laws. This structure can effectively shield different assets while allowing the business to operate as one entity. For example, if a lawsuit arises against one subsidiary LLC, typically the challenger can only look to the assets of that LLC and not any of the other properties of the parent LLC held in the names of its other subsidiaries. Similar to how a conventional LLC can be used to protect individual person-members from personal liability, by holding properties in this structure the parent LLC can operate a single business while protecting each of its properties as individual assets in the event one of its subsidiary LLCs faces legal liability. The parent LLC’s operating agreement can then be used to administer profits, liabilities and other obligations of the business regarding the operation of those properties. In this structure, one parent LLC is composed of different members – usually one management entity used to manage the business - and a collection of separate subsidiary LLCs each used to hold different properties in the names of those LLCs. In Ohio, the holding company structure is a common vehicle used by businesses whose primary purpose is centered around real estate.
![ohio business license llc vs inc ohio business license llc vs inc](https://c8.alamy.com/comp/CC1A00/graham-moffatt-moore-marriott-will-hay-oh-mr-potter!-1937-CC1A00.jpg)
One notable change, the addition of “series LLCs,” could affect how existing and new LLCs may wish to be organized, especially those formed primarily for real estate purposes. The new chapter preserves many concepts of the current chapter to prevent existing LLCs from needing to make significant changes in response to the new chapter going into effect, but introduces many new concepts. The new chapter will modernize Ohio’s LLC law similar to many other states and is based largely on the Prototype LLC Act developed by the LLCs, Partnerships and Unincorporated Entities Committee of the American Bar Association Section of Business Law. 1, 2022, to make way for the Ohio Revised Limited Liability Company Act (Ohio LLC Act) adopted earlier this year under Chapter 1706 of the ORC.
OHIO BUSINESS LICENSE LLC VS INC CODE
While other changes are also important to consider, series LLCs will provide a new flexible vehicle for Ohio companies that hold and invest in real property assets.Ĭhapter 1705, the current chapter of the Ohio Revised Code (ORC) governing limited liabilities companies will be repealed, effective Jan.
![ohio business license llc vs inc ohio business license llc vs inc](https://i.ebayimg.com/images/i/253799476741-0-1/s-l1000.jpg)
The introduction of series limited liability companies (LLCs) into the provisions governing LLCs under the Ohio Revised Code will be very important for Ohio companies operating for real estate purposes.