Section 1701.591 of the Ohio Revised Code is Ohio's close corporation law. It provides, through the use of a "close corporation agreement," the mechanism, first, for implementing unprecedented informality in the functioning of a close corporation and, second, for establishing a legal relationship among the shareholders that is essentially the same as that provided by law for members of a partnership. The new law will have the major impact it deserves only as the result of initiative taken by Ohio attorneys engaged in the formation and ongoing representation of close corporations. It is hoped that this article will help motivate Ohio lawyers to provide that indispensable initiative. The emphasis of this paper will be its treatment of 591. However, a broader focus will be the legal status of the Ohio close corporation, in terms of where it has been, where it is now, and where it should be going. Dealing more specifically with what follows; the article will treat 591 in depth, including its text and background. To provide perspective, the development of close corporation legislation generally and in other jurisdictions will be briefly discussed. To fill out the contours of the Ohio law, the article will summarize other provisions of the Ohio General Corporation Law having a special effect on the close corporation. Finally, the writer will consider and recommend improvements to Ohio's laws pertaining to close corporations, consisting principally of legislation to provide self-executing relief from shareholder oppression.
Forrest B. Weinberg,
The Close Corporation under Ohio Law,
35 Clev. St. L. Rev.
available at http://engagedscholarship.csuohio.edu/clevstlrev/vol35/iss1/9