Ohio House Bill HB301

Ohio 2023-2024 Regular Session

• Introduced: 10/18/23
• Report Pass: 2/7/24
• Engrossed: 4/24/24
• Report Pass: 6/26/24
• Enrolled: 6/26/24
• Passed: 7/24/24
• Passed: 10/24/24

Caption

Regards Nonprofit Corporation Law and dissolving corporations

Impact

The amendments proposed in HB301 provide a clearer structure for dissolving nonprofit organizations, aiming to streamline the process while protecting the interests of creditors and the public. By explicitly outlining the responsibilities and limitations of directors during the dissolution process, the bill seeks to foster accountability within nonprofit organizations. Additionally, the introduction of provisions that govern good standing and the liabilities incurred by directors may stabilize the operational environment for nonprofits in Ohio, clarifying the legal ramifications of their actions during and after dissolution.

Summary

House Bill 301 aims to amend several sections of the Ohio Revised Code related to nonprofit corporations and the procedures governing their dissolution. This bill makes substantive changes to the Nonprofit Corporation Law, specifically addressing how corporations can dissolve, manage their assets during dissolution, and clarify the responsibilities of directors and officers. It introduces new provisions regarding the liabilities of directors in the context of distributing assets and the dissolution process, providing a clearer legal framework for these organizations.

Sentiment

The sentiment around HB301 appears largely positive among proponents who argue that the bill modernizes Ohio's nonprofit laws. Supporters emphasize the clarity and improved governance standards it sets for nonprofit organizations. However, there may be dissent among stakeholders who fear that the changes could inadvertently create more obstacles for nonprofits in distress or complicate the dissolution process. As nonprofit organizations are essential pillars in many communities, their concern over potential liabilities and administrative burdens is notable.

Contention

A key point of contention in the discussions around HB301 centers on the balance between accountability and flexibility for nonprofit directors. Some critics express concern that the increased liabilities for directors could deter individuals from serving on nonprofit boards due to fear of personal responsibility in times of financial distress. Additionally, the complexities of the dissolution process remain a subject of debate, as stakeholders question whether the new regulations will effectively protect the interests of all parties involved, especially in situations where swift action may be necessary to preserve assets.