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  • Home
  • Who We Serve
  • Practice Areas and Fees
    • General Counsel Service
    • Business Law >
      • LLC Formation
      • LLC Operating Agreements
      • Close Corporation Formation
      • Corporate Bylaws
      • Close Corporation Agreements
      • Other Business Law Services
    • Business Contracts >
      • B2B Service Agreements
      • Contract Review and Advice
      • Customer Agreements
      • Financial Agreements
      • Joint Venture Agreements
      • Lease Agreements
      • Noncompete Agreements
      • Nondisclosure Agreements
      • Waiver and Release Agreements
      • Website Privacy Policies
      • Website Terms of Service
    • Business Sales >
      • Business Purchases and Sales
      • Letter of Intent
      • Purchase Agreements
      • Buy-Sell Agreements
      • Membership Interest Transfer Agreements
      • Business Succession & Disaster Planning
      • Business Dissolutions
    • Raising Money From Investors >
      • Private Placement Memorandums
      • Investment Agreements
    • Franchising and Business Opportunities >
      • Franchise Disclosure Documents
      • Franchise Agreements
      • Ohio Business Opportunity Plans
    • Nonprofit Law >
      • Nonprofit Formation
      • Co-op Formation
      • Tax Exempt Status
      • Nonprofit Governance
      • Nonprofit MOUs and Agreements
      • Nonprofit General Counsel Service
    • Intellectual Property >
      • Trademark Search
      • Trademark Registration
      • Trademark Maintenance
      • Copyright Registration
      • Work For Hire Agreement
      • Licensing Intellectual Property
      • Assigning Intellectual Property
      • Proprietary Information and Invention Assignment Agreements
      • Confidentiality Agreements
      • Intellectual Property Audit
    • Employment Law >
      • Employment Contracts
      • Employee Handbooks
      • Employment Policies
      • Independent Contractors
  • Adding Value
    • Legal Audit Checklist
    • Legal Dictionary
    • 7 Common Legal Mistakes
    • Succession and Emergency Planning Worksheet
    • Business Contracts: Review Checklist
    • Webinars >
      • HR 101: Managing the Growing Pains That Come With Growing Your Business
      • Hiring Independent Contractors
      • Legal Audit and Risk Assessment
      • Structuring a Social Enterprise
  • Bio
  • Blog
  • Scheduling
    • Prospective Client Scheduling
    • Existing and Former Client Scheduling
    • Networking Scheduling

Close Corporation Formation

Close Corporation Formation

Business Formation
LLC Formation
LLC Operating Agreements
S Corps
Close Corporation 
   Formation
Corporate Bylaws
Close Corporation 
   Agreements

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What is an Ohio Close Corporation?
Because of the corporate formalities that corporations are required to observe, it’s not unusual for businesses with relatively few shareholders to elect to be treated as “close” corporations. When set up correctly, a close corporation can greatly simplify both how the corporation is run and how the relationships among the various shareholders is managed. For example, a close corporation can eliminate the board of directors and dispense with having an annual shareholders’ meeting. Instead, the shareholders act in place of a board of directors and run the corporation much like a partnership or LLC.

How Does an Ohio Corporation Become a Close Corporation?
To form a close corporation in Ohio:
  • All of the shareholders must agree in writing to adopt a close corporation agreement that is governed by ORC Section 1701.591. [Amendments to the close corporation agreement are usually unanimous, though the agreement itself may reduce this threshold to 80% of the outstanding shares.]
  • The shares in a close corporation must be represented by stock certificates that conspicuously note the existence of the close corporation agreement. [The shares also cannot be listed on one of the national stock exchanges or registered under securities laws.]

What should a close corporation agreement include?
A close corporation agreement often replaces corporate regulations or bylaws and will look much like an LLC operating agreement or partnership agreement. The close corporation agreement should address:
  • How will the business and affairs of the corporation be managed? 
  • What might trigger a dissolution of the corporation? 
  • Who will serve as officers of the corporation? What authority does each officer position have?
  • Will the corporation eliminate the board of directors? If not, what authority will directors have? 
  • Will any of the officers be employees of the corporation? If so, under what conditions? 
  • How will dividends be declared and paid? How will profits be distributed or divided? 
  • Can the corporation issue or sell additional shares? 
  • How will deadlocks or tie votes be addressed? 
  • Will the corporation dispense with the formality of an annual meeting? [The close corporation must still issue annual financial statements to its shareholders.]
SCHEDULE A CONSULTATION

Corporation Formation includes:
  • Legal advice related to selecting and forming the business entity;
  • Preparing and filing the Articles of Incorporation with the Ohio Secretary of State;
  • Preparing the corporate bylaws or close corporation agreement;
  • Preparing initial corporate resolutions related to the formation of the new entity; and
  • Obtaining the tax identification number.
Single Shareholder or Spouses in a Close Corporation: $950

Multiple Shareholders: $2,450

​Complex Formations: $4,950
Complex formations typically involve multiple classes of shares, vesting restrictions, investors, etc.)
​

+ $99 Minimum Secretary of State Fee


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