“O-H!” “I-N-C!”
Consider incorporating in the Buckeye State - the home of championship college football teams and sensible, business friendly corporate laws.
Recent developments have called into question the prevailing wisdom of choosing Delaware as the default state to incorporate a business. A series of newsworthy decisions by its highly touted Court of Chancery and a bitter partisan fight over proposed amendments to its corporate law have led to several well-known companies seeking to reincorporate in places like Texas or Nevada- neither of which has won a college football championship in decades. If you are considering where to form a new business you should consider Ohio- whether you like college football or not.
Ohio’s corporate law offers many attractive features for business formation. For starters, you can incorporate with a simple online filing for as little as $99. For an extra fee of only $300 you can ensure that the filing is processed within 4 hours. These simple processes and low fees hold true as well for other popular entity formations such as limited liability companies. After incorporation, Ohio for profit corporations do not have to file annual reports. Additionally, Ohio’s companies can obtain proof of their existence and good standing online for a fee of only $5. This can come in quite handy when a business needs to close on a loan or engage in a transaction.
Ohio’s corporate laws also offer wide latitude to determine the type of governance structures and practices that best suit business needs. Ohio has a close corporation statute that allows its corporations to alter many default governance provisions such as acting without a board of directors, or allowing a sole proprietor to hold multiple offices. Similarly, Ohio’s limited liability company statute acts as a set of default provisions that can be altered by an Ohio LLC’s operating agreement to create a governance regime and set of membership rights that suit its needs and those of its investors. In other words, you can run the option or call an audible.
While Delaware’s Court of Chancery seems to be in flux, Ohio recently reinvigorated its Commercial Docket. Now Ohio’s business courts may not have the tenure or experience of Delaware’s, but Ohio’s courts have still managed to make sensible business decisions to respect the corporate entity, limit tort liability, enforce the choice of arbitration in contracts, and respect the business judgment rule.
Unsurprisingly, Ohio’s corporate law contains a common-sense balance of protecting shareholder value while still allowing corporate boards leeway to consider the needs of other stakeholders such as employees, customers and local communities. Maybe this is why powerhouse Ohio corporations are incorporated in their home state- companies such as The Procter & Gamble Company, The Kroger Co., Fifth Third Bancorp, FirstEnergy Corp., The Progressive Corporation, Cleveland-Cliffs Inc. and The Goodyear Tire & Rubber Company.
Incorporating in Ohio has another benefit for businesses that operate in Ohio: namely, they do not have to register as a foreign corporation in Ohio the way that businesses that are incorporated in other states like Delaware, Texas or Nevada do. Talk about a homefield advantage!
If you have any questions or are ready to form your corporation or LLC in Ohio, reach out to the professionals in Bricker Graydon’s Corporate Services Practice Group. They can help you get in the game!
