Resources

Client Alerts, News Articles, Blog Posts, & Multimedia

Everything you need to know about BMD and the industry.

Ohio Modernizes and Improves its Laws Governing Limited Liability Companies

Client Alert

Effective Feb. 11, 2022, the Ohio Revised Limited Liability Company Act (“Revised Act”) now governs all limited liability companies formed under Ohio law. The law updates and replaces the existing LLC Act and has important implications for business owners in Ohio. Passage of the Revised Act makes Ohio one of only 16 states that permits the formation of “Series” LLCs. The legislation is intended to be one of the most progressive LLC acts in the country, but retains the terminology used in Ohio’s current LLC act. A summary of important changes is provided below.

Governance of Ohio LLCs

The Revised Act grants LLC members more control over conducting the LLC’s affairs. The Revised Act eliminates the distinction between member-managed and manager-managed LLCs and allows members of an LLC to organize their business as they see fit. The LLC’s governance structure may be set forth in the operating agreement or by decision of the members in accordance with the operating agreement. Under the Revised Act, LLCs may implement a structure similar to for-profit corporation governance, such as a board of directors.

‘Series’ LLCs Permitted in the Revised Act

The Revised Act makes asset protection simpler and more flexible for Ohio investors. The Revised Act reduces shared liability among multiple properties or assets because of its acceptance of Series LLCs. A Series LLC creates one “parent” LLC and several "children" sub-LLCs among which to split assets. Practically, if one of the sub-series LLCs gets sued, the assets held by the other children sub-LLCs and the parent LLC are shielded from any shared liability. While investors obtain the same asset protection that comes with using multiple, traditional LLCs, in a Series LLC model, only one parent LLC is opened. Assets owned by one Series are shielded from the risk of liability of others within the same Series LLC. 

Practically, a Series LLC structure is useful in a limited set of circumstances.  Real estate investors are primary users of Series LLCs because of the ease and applicability of Series LLCs to investment property portfolios. Rather than creating multiple companies to own investment property, each Series LLC adds inherent investment protection by isolating one property from the others.

Cancellation for Failure to Maintain Statutory Agent

The Revised Act also imposes statutory penalties on LLCs that fail to maintain (or fail to update) their statutory agent’s name and address. The Revised Act directs the Secretary of State to cancel an LLC’s registration, after providing the LLC with notice and a 30-day opportunity to cure. The Revised Act provides for the ability to reinstate a cancelled LLC by submitting the appropriate form and paying a fee.

Cost and Tax Benefits

The Revised Act has strong cost and tax benefits, too. For example, investors will pay fewer registration fees for multiple LLCs when using the Series LLC model. Additionally, only one federal employer identification number is needed for a Series LLC and each sub-series is listed on one singular tax return.

The incorporation of Series LLCs into state law represents a noteworthy change in the law pertaining to limited liability companies in Ohio. To ensure compliance with the Revised Act, to examine how the Series LLC may benefit your business, or for strategic planning for your business, contact Brandon Pauley, btpauley@bmdllc.com or 614-246-7510 or any member of the BMD Business Law team.


Valley National Bank/Trulieve Loan: A Big Step Out of the Shadows

In a late December press release, Trulieve announced that it had secured a $71.5 million commercial bank loan. In addition to the amount of the loan, which may be the largest commercial bank loan to date to a cannabis company, the release prominently identified Valley Bank and featured both a quote from Valley’s Senior Vice President, John Myers, and a description of the Bank’s service platform and commitment to the cannabis industry.

The End of Non-Competes? The Impact It Will Have on the Healthcare Industry

On January 5, 2023, the Federal Trade Commission (“FTC”) announced a proposed rule that, if enacted, will ban employers from entering into non-compete clauses with workers (the “Rule”), and the Rule would void existing non-compete agreements. In their Notice, the FTC stated that if the Rule were to go into effect, they estimate the overall earnings of employees in the United States could increase by $250 billion to $296 billion per year. The Rule would also require employers to rescind non-competes that they had already entered into with their workers. For purposes of the Rule, the FTC has defined “worker” to also include any employees, interns, volunteers, and contractors.”

2022 Healthcare Recap and 2023 Healthcare Check-Up

As the country begins to return to a new “normal” following the COVID-19 pandemic, there are many healthcare rules changing on both the federal and state levels as a result. Thus, it is important for healthcare providers and their employers to be aware of these changing rules, and any implications they may have on their practice. Look back on healthcare in 2022 and find a checklist for 2023.

Direct Support Professional Retention Payments

On December 15, the Ohio Senate and House passed House Bill 45, which authorizes the Department of Developmental Disabilities (DODD), in conjunction with the county boards of developmental disabilities, to launch their initiative to issue retention payments to Direct Support Professionals (DSPs). These retention payments will be distributed quarterly to participating home and community-based waiver providers to address the workforce crisis in the direct provider sector. Governor DeWine needs to sign the Bill to begin the payments, but he is expected to do so by the end of 2022.

Real Estate Investors Position for 2023 Opportunities

Real estate investors weathered another year in a post-pandemic world, with the year closing with yet another interest rate increase coupled with both uncertainty and heightened interest carrying into 2023. Just last Wednesday, the Federal Reserve raised its benchmark interest rate 0.50 percentage points, shifting the target range to 4.25% to 4.50%. The new level is the highest the fed funds rate has been since December 2007 and marks the seventh rate hike this year. So what does this mean to investors, brokers, lenders, and others in the real estate world? Read a few perspectives below from stakeholders familiar with our BMD clients and the markets in which they do business.