Ohio § 1702.12

§ 1702.12.

(A) A corporation may sue and be sued. (B) A corporation may adopt and alter a corporate seal and use it or a facsimile of it,

but failure to affix the corporate seal shall not affect the validity of any instrument. (C) Unless otherwise provided in the articles, a corporation may take property of any

description, or any interest in property, by gift, devise, or bequest. (D) Subject to limitations prescribed by law or in its articles, a corporation may make

donations for the public welfare, for religious, charitable, scientific, literary,

or educational purposes, or in furtherance of any of its purposes. (E)(1) A corporation may indemnify or agree to indemnify any person who was or is a party,

or is threatened to be made a party, to any threatened, pending, or completed civil,

criminal, administrative, or investigative action, suit, or proceeding, other than

an action by or in the right of the corporation, by reason of the fact that the person

is or was a director, officer, employee, or agent of or a volunteer of the corporation,

or is or was serving at the request of the corporation as a director, officer, employee,

member, manager, or agent of or a volunteer of another domestic or foreign nonprofit

corporation or business corporation, a limited liability company, or a partnership,

joint venture, trust, or other enterprise, against expenses, including attorney's

fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred

by the person in connection with such action, suit, or proceeding, if the person acted

in good faith and in a manner the person reasonably believed to be in or not opposed

to the best interests of the corporation, and, with respect to any criminal action

or proceeding, if the person had no reasonable cause to believe the person's conduct

was unlawful.  The termination of any action, suit, or proceeding by judgment, order, settlement,

or conviction, or upon a plea of nolo contendere or its equivalent, shall not create,

of itself, a presumption that the person did not act in good faith and in a manner

the person reasonably believed to be in or not opposed to the best interests of the

corporation, and, with respect to any criminal action or proceeding, a presumption

that the person had reasonable cause to believe that the person's conduct was unlawful. (2) A corporation may indemnify or agree to indemnify any person who was or is a party,

or is threatened to be made a party, to any threatened, pending, or completed action

or suit by or in the right of the corporation to procure a judgment in its favor,

by reason of the fact that the person is or was a director, officer, employee, or

agent of or a volunteer of the corporation, or is or was serving at the request of

the corporation as a director, officer, employee, member, manager, or agent of or

a volunteer of another domestic or foreign nonprofit corporation or business corporation,

a limited liability company, or a partnership, joint venture, trust, or other enterprise

against expenses, including attorney's fees, actually and reasonably incurred by the

person in connection with the defense or settlement of such action or suit, if the

person acted in good faith and in a manner the person reasonably believed to be in

or not opposed to the best interests of the corporation, except that no indemnification

shall be made in respect of any of the following: (a) Any claim, issue, or matter as to which the person is adjudged to be liable for negligence

or misconduct in the performance of the person's duty to the corporation unless, and

only to the extent that, the court of common pleas or the court in which the action

or suit was brought determines, upon application, that, despite the adjudication of

liability but in view of all the circumstances of the case, the person is fairly and

reasonably entitled to indemnity for such expenses as the court of common pleas or

such other court considers proper; (b) Any action or suit in which liability is asserted against a director and that liability

is asserted only pursuant to section 1702.55 of the Revised Code . (3) To the extent that a director, officer, employee, member, manager, agent, or volunteer

has been successful on the merits or otherwise in defense of any action, suit, or

proceeding referred to in division (E)(1) or (2) of this section, or in defense of

any claim, issue, or matter in such an action, suit, or proceeding, the person shall

be indemnified against expenses, including attorney's fees, actually and reasonably

incurred by the person in connection with that action, suit, or proceeding. (4) Unless ordered by a court and subject to division (E)(3) of this section, any indemnification

under division (E)(1) or (2) of this section shall be made by the corporation only

as authorized in the specific case, upon a determination that indemnification of the

director, officer, employee, member, manager, agent, or volunteer is proper in the

circumstances because the person has met the applicable standard of conduct set forth

in division (E)(1) or (2) of this section.  Such determination shall be made in any of the following manners: (a) By a majority vote of a quorum consisting of directors of the indemnifying corporation

who were not and are not parties to or threatened with the action, suit, or proceeding

referred to in division (E)(1) or (2) of this section; (b) Whether or not a quorum as described in division (E)(4)(a) of this section is obtainable,

and if a majority of a quorum of disinterested directors so directs, in a written

opinion by independent legal counsel other than an attorney, or a firm having associated

with it an attorney, who has been retained by or who has performed services for the

corporation or any person to be indemnified within the past five years; (c) By the members; (d) By the court of common pleas or the court in which the action, suit, or proceeding

referred to in division (E)(1) or (2) of this section was brought. If an action or suit by or in the right of the corporation is involved, any determination

made by the disinterested directors under division (E)(4)(a) of this section or by

independent legal counsel under division (E)(4)(b) of this section shall be communicated

promptly to the person who threatened or brought the action or suit under division

(E)(2) of this section, and, within ten days after receipt of that notification, the

person shall have the right to petition the court of common pleas or the court in

which the action or suit was brought to review the reasonableness of that determination. (5)(a)(i) Unless, at the time of a director's or volunteer's act or omission that is the subject

of an action, suit, or proceeding referred to in division (E)(1) or (2) of this section,

the articles or regulations of the corporation state, by specific reference to this

division, that its provisions do not apply to the corporation, or unless the only

liability asserted against a director in an action, suit, or proceeding referred to

in division (E)(1) or (2) of this section is pursuant to section 1702.55 of the Revised Code , or unless division (E)(5)(a)(ii) of this section applies, the expenses incurred

by the director or volunteer in defending the action, suit, or proceeding, including

attorney's fees, shall be paid by the corporation.  Upon the request of the director or volunteer and in accordance with division (E)(5)(b)

of this section, those expenses shall be paid as they are incurred, in advance of

the final disposition of the action, suit, or proceeding. (ii) Notwithstanding division (E)(5)(a)(i) of this section, the expenses incurred by a

director or volunteer in defending an action, suit, or proceeding referred to in division

(E)(1) or (2) of this section, including attorney's fees, shall not be paid by the

corporation upon the final disposition of the action, suit, or proceeding, or, if

paid in advance of the final disposition of the action, suit, or proceeding, shall

be repaid to the corporation by the director or volunteer, if it is proved, by clear

and convincing evidence, in a court with jurisdiction that the act or omission of

the director or volunteer was one undertaken with a deliberate intent to cause injury

to the corporation or was one undertaken with a reckless disregard for the best interests

of the corporation. (b) Expenses, including attorney's fees, incurred by a director, officer, employee, member,

manager, agent, or volunteer in defending any action, suit, or proceeding referred

to in division (E)(1) or (2) of this section may be paid by the corporation as they

are incurred, in advance of the final disposition of the action, suit, or proceeding,

as authorized by the directors in the specific case, upon receipt of an undertaking

by or on behalf of the director, officer, employee, member, manager, agent, or volunteer

to repay the amount if it ultimately is determined that the person is not entitled

to be indemnified by the corporation. (6) The indemnification or advancement of expenses authorized by this section is not

exclusive of, and shall be in addition to, any other rights granted to those seeking

indemnification or advancement of expenses, pursuant to the articles, the regulations,

any agreement, a vote of members or disinterested directors, or otherwise, both as

to action in their official capacities and as to action in another capacity while

holding their offices or positions, and shall continue as to a person who has ceased

to be a director, officer, employee, member, manager, agent, or volunteer and shall

inure to the benefit of the heirs, executors, and administrators of that person.  A right to indemnification or to advancement of expenses arising under a provision

of the articles or the regulations shall not be eliminated or impaired by an amendment

to that provision after the occurrence of the act or omission that becomes the subject

of the civil, criminal, administrative, or investigative action, suit, or proceeding

for which the indemnification or advancement of expenses is sought, unless the provision

in effect at the time of that act or omission explicitly authorizes that elimination

or impairment after the act or omission has occurred. (7) A corporation may purchase and maintain insurance, or furnish similar protection,

including, but not limited to, trust funds, letters of credit, or self-insurance,

for or on behalf of any person who is or was a director, officer, employee, agent,

or volunteer of the corporation, or is or was serving at the request of the corporation

as a director, officer, employee, member, manager, agent, or volunteer of another

domestic or foreign nonprofit corporation or business corporation, a limited liability

company, or a partnership, joint venture, trust, or other enterprise, against any

liability asserted against the person and incurred by the person in any such capacity,

or arising out of the person's status as such, whether or not the corporation would

have the power to indemnify the person against that liability under this section.  Insurance may be so purchased from or so maintained with a person in which the corporation

has a financial interest. (8) The authority of a corporation to indemnify persons pursuant to division (E)(1) or

(2) of this section does not limit the payment of expenses as they are incurred, in

advance of the final disposition of an action, suit, or proceeding, pursuant to division

(E)(5) of this section or the payment of indemnification, insurance, or other protection

that may be provided pursuant to division (E)(6) or (7) of this section.  Divisions (E)(1) and (2) of this section do not create any obligation to repay or

return payments made by a corporation pursuant to division (E)(5), (6), or (7) of

this section. (9) As used in division (E) of this section, “ corporation ” includes all constituent corporations in a consolidation or merger, and the new

or surviving corporation, so that any person who is or was a director, officer, employee,

agent, or volunteer of a constituent corporation or is or was serving at the request

of a constituent corporation as a director, officer, employee, member, manager, agent,

or volunteer of another domestic or foreign nonprofit corporation or business corporation,

a limited liability company, or a partnership, joint venture, trust, or other enterprise,

shall stand in the same position under this section with respect to the new or surviving

corporation as the person would if the person had served the new or surviving corporation

in the same capacity. (F) In carrying out the purposes stated in its articles and subject to limitations prescribed

by law or in its articles, a corporation may do the following: (1) Purchase or otherwise acquire, lease as lessee, invest in, hold, use, lease as lessor,

encumber, sell, exchange, transfer, and dispose of property of any description or

any interest in property of any description; (2) Make contracts; (3) Form or acquire the control of other domestic or foreign nonprofit corporations or

business corporations; (4) Be a partner, member, associate, or participant in other enterprises or ventures,

whether profit or nonprofit; (5) Borrow money, and issue, sell, and pledge its notes, bonds, and other evidences of

indebtedness, and secure any of its obligations by mortgage, pledge, or deed of trust,

of all or any of its property, and guarantee or secure obligations of any person; (6) Become a member of another corporation; (7) Conduct its affairs in this state and elsewhere; (8) Resist a change or potential change in control of the corporation, if the directors,

by a majority vote of a quorum, determine that the change or potential change is opposed

to or not in the best interests of the corporation, upon consideration of any of the

matters set forth in division (F) of section 1702.30 of the Revised Code ; (9) Do all things permitted by law and exercise all authority within the purposes stated

in its articles or incidental to those purposes. (G) Irrespective of the purposes stated in its articles, but subject to limitations or

prohibitions stated in its articles, a corporation, in addition to the authority conferred

by division (F) of this section, may invest its funds not currently needed in carrying

out its purposes in any shares or other securities of another nonprofit corporation

or business corporation, or another business or undertaking. (H)(1) Notwithstanding any other provision of this section to the contrary, no corporation

that is a “private foundation,” as defined in section 509 of the Internal Revenue Code 1 , shall do the following: (a) Engage in any act of “self-dealing,” as defined in section 4941 (d) of the Internal Revenue Code 2 , that would give rise to any liability for any tax imposed by section 4941 of the Internal Revenue Code ; (b) Retain any “excess business holdings,” as defined in section 4943 (c) of the Internal Revenue Code 3 , that would give rise to any liability for any tax imposed by section 4943 of the Internal Revenue Code ; (c) Make any investment that would jeopardize the carrying out of any of its exempt purposes,

within the meaning of section 4944 of the Internal Revenue Code 4 , so as to give rise to any liability for any tax imposed by that section; (d) Make any “taxable expenditures,” as defined in section 4945 (d) of the Internal Revenue Code 5 , that would give rise to any liability for any tax imposed by section 4945 of the Internal Revenue Code . (2) Each corporation that is a “private foundation,” as defined in section 509 of the Internal Revenue Code , shall, for the purposes specified in its articles, distribute at such time and in

such manner, for each taxable year, amounts at least sufficient to avoid liability

for any tax imposed by section 4942 of the Internal Revenue Code . (3) Divisions (H)(1) and (2) of this section apply to all corporations described in them,

whether or not contrary to the provisions of the articles or regulations of such a

corporation, except that divisions (H)(1) and (2) of this section do not apply to

a corporation in existence on September 17, 1971, to the extent that such corporation

provides to the contrary by amendment to its articles adopted after that date. (4) Violation of a provision of division (H)(1) or (2) of this section by a corporation

to which the provisions of those divisions are applicable is not cause for cancellation

of its articles.  No director or officer of a corporation to which the provisions of division (H)(1)

or (2) of this section are applicable is personally liable for a violation of a prohibition

or requirement of those provisions, unless the director or officer participated in

such violation knowing that it was a violation, and no director or officer is personally

liable if such violation was not willful and was due to reasonable cause, except that

this division does not exonerate a director or officer from any responsibility or

liability to which the director or officer is subject under any other rule of law,

whether or not duplicated in division (H)(1) or (2) of this section. (5) Except as provided in division (H)(4) of this section, nothing in division (H) of

this section impairs the rights and powers of the courts or the attorney general of

this state with respect to any corporation. (6) As used in division (H) of this section, “ Internal Revenue Code ” means the “Internal Revenue Code of 1986,” 100 Stat. 2085, 26 U.S.C. 1 , as amended. (I)(1) No lack of, or limitation upon, the authority of a corporation shall be asserted

in any action except as follows: (a) By the state in an action by it against the corporation; (b) By or on behalf of the corporation against a director, an officer, or a member as

such; (c) By a member as such or by or on behalf of the members against the corporation, a

director, an officer, or a member as such. (2) Division (I)(1) of this section shall apply to any action brought in this state upon

any contract made in this state by a foreign corporation. 1

 26 U.S.C.A. § 509. 2

 26 U.S.C.A. § 4941(d). 3

 26 U.S.C.A. § 4943(c). 4

 26 U.S.C.A. § 4944. 5

 26 U.S.C.A. § 4945(d).