Skip to Content
Main Content

Say Hello to Ohio's New LLC Act (O.R.C. 1706). Part 1: Overview of Significant Changes

This three-part series by Brandon Leal and Julie Vaccarelli provides a brief overview of some of the significant changes in the New LLC Act.

By Brandon J. Leal, Esq. and Julie A. Vaccarelli, Esq.

In 2021, Ohio passed the Ohio Revised Limited Liability Company Act (S.B. 276) (the “New LLC Act”), which completely replaced Ohio’s prior limited liability company (“LLC”) statutes.  The New LLC Act repealed Revised Code Chapter 1705, et seq. in full and implemented sweeping changes that modernize the governance of Ohio LLCs (codified in Revised Code Chapter 1706, et seq.).

The New LLC Act became effective on January 1, 2022.  LLCs formed prior to 2022 should become familiar with the New LLC Act to ensure they are prepared to take advantage of the changes.

Because of the slew of changes in the New LLC Act, we provide further detail and analysis in this three-part series.  Some of the principal changes include:

  • Penalties for Failing to Comply with the Operating Agreement (R.C. § 1706.08(B)) – An operating agreement may impose penalties (g., reducing a member’s interest) if a member fails to perform or comply with the operating agreement (e.g., failure to exercise a call option).
  • Expansion/Reduction of Fiduciary Duties (R.C. § 1706.08(B)) – Other than the implied duty of good faith and fair dealing, an operating agreement may expand or reduce the fiduciary duties owed between members.
  • Clarity on “Default” Rules (R.C. § 1706.08(C)) – Unlike the former statutes, this section makes clear that, other than the items listed in § 1706.08(C), all governing statutes in Chapter 1706 are default rules that the LLC’s operating agreement can modify.
  • Penalty for Failure to Maintain Statutory Agent (R.C. § 1706.09(L)) – If an LLC fails to update its statutory agent, the Ohio Secretary of State is directed to cancel the LLC’s articles after 30-days' notice and failure to correct.
  • Series LLCs (R.C. §§ 1706.76 to 7613) – An LLC operating agreement can now permit the creation of “series" LLCs, which creates a series of distinct LLCs under a single operating agreement – similar to using parent/subsidiary LLCs to separate assets (provided that the LLC's Articles of Organization contains certain language).
  • Elimination of Member/Manager Management Distinction (R.C. §§ 1706.18 to 19) – LLCs are no longer required to be either member or manager-managed; instead, LLCs are now governed by members, who can implement an appropriate governance structure (g., board of directors, officers, oversight committee, member/manager-managed, etc.).

The above is only a brief overview of some of the significant changes in the New LLC Act.  Part 2 provides further analysis on the ability to form "series" LLCs and the pros and cons of doing so.  Part 3 provides further analysis on other key provisions.  Contact a WHP attorney today to ensure that your operating agreement is updated and complies with the New LLC Act.


This article provides an overview and summary of the matters described therein. It is not intended to be and should not be construed as legal advice on the particular subject.

Return to News