Chapter 1746: BUSINESS TRUSTS

1746.01 Business trust definitions.

As used in Chapter 1746. of the Revised Code, unless the context otherwise requires:

(A) "Business trust" means an unincorporated business association which is created by a trust instrument, pursuant to common law or enabling legislation, under which property is held, managed, administered, controlled, invested, reinvested, and operated, or under which business or professional activities, as permitted by the laws governing any profession, for profit are carried on, by a trustee or trustees for the benefit and profit of such person or persons as are or may become the holders of transferable shares of beneficial interest in the trust estate. A business trust shall not be construed to include, and this chapter does not apply to, real estate investment trusts as defined in Chapter 1747. of the Revised Code and trusts engaged solely in exercising the voting rights pertaining to corporate shares or other securities in accordance with the terms of a written instrument.

(B) "Foreign business trust" means a business trust organized under the laws of a state or jurisdiction other than this state.

(C) "Trust instrument" means the written instrument creating a business trust, including any amendments to it.

Effective Date: 03-18-1983

1746.02 Status of business trusts.

A business trust is hereby declared to be a permitted form of association for the conduct of business in this state. A business trust is a separate unincorporated legal entity, not a partnership, joint venture, joint-stock association, agency, or any other form of entity.

Effective Date: 03-18-1983

1746.03 Compliance with chapter.

No business trust shall be authorized to transact business in this state unless it complies with section 1746.04 of the Revised Code, except that a business trust that is transacting business in this state on the effective date of this section may continue to transact business in this state without complying with this chapter and, if it makes the filings described in section 1746.04 of the Revised Code, shall be deemed to have elected to operate under this chapter. A business trust shall be deemed to be transacting business in this state for purposes of this chapter only if such business trust maintains a place of business in this state from which it regularly engages on its own behalf in activities permitted by its trust instrument and permitted under this chapter, provided that nothing contained in this chapter shall prohibit any business trust that does not transact business within the meaning set forth in this section from voluntarily complying with the provisions of this chapter.

Effective Date: 03-18-1983

1746.04 Filing with secretary of state before transacting business.

(A) Except as set forth in section 1746.03 of the Revised Code, before transacting business in this state, a business trust shall file in the office of the secretary of state, on forms prescribed by the secretary of state, a report containing the following information:

(1) A list of the names and addresses of its trustees;

(2) The address of its principal office;

(3) In the case of a foreign business trust, the address of its principal office within this state, if any;

(4) The business names of the business trust, including any fictitious or assumed names;

(5) The name and address within this state of a designated agent upon whom process against the business trust may be served;

(6) The irrevocable consent of the business trust to service of process upon its designated agent and to service of process upon the secretary of state if, without the registration of another agent with the secretary of state, its designated agent has died, resigned, lost authority, dissolved, become disqualified, or has removed from this state, or if its designated agent cannot, with due diligence, be found.

Such report shall have attached as an exhibit an executed copy of the trust instrument or a true and correct copy of it, certified to be such by a trustee before an official authorized to administer oaths or by a public official in another state in whose office an executed copy is on file.

(B) Not more than ninety days after the occurrence of any event causing any filing, including exhibits, made pursuant to division (A) of this section, or any previous filing made pursuant to this division, to be inaccurate or incomplete, there shall be filed in the office of the secretary of state all information necessary to maintain the accuracy and completeness of such filing.

(C) The secretary of state shall charge and collect the fees specified in division (T) of section 111.16 of the Revised Code for each filing made under division (A) or (B) of this section, except for filings under division (B) of this section pertaining solely to division (A)(5) of this section, for which the secretary of state shall charge and collect the fee specified in division (R) of section 111.16 of the Revised Code.

(D) The trust instrument and other information filed in the office of the secretary of state are matters of public record, and persons dealing with a business trust are charged with constructive notice of the contents of any such instrument or information by reason of such filing.

(E) A copy of a trust instrument or other information filed in the office of the secretary of state shall be accepted as prima-facie evidence of the existence of the instrument or other information and of its contents, and conclusive evidence of the existence of such record.

(F) The agent designated pursuant to division (A)(5) of this section shall be one of the following:

(1) A natural person who is a resident of this state;

(2) A domestic or foreign corporation, nonprofit corporation, limited liability company, partnership, limited partnership, limited liability partnership, limited partnership association, professional association, business trust, or unincorporated nonprofit association that has a business address in this state. If the agent is an entity other than a domestic corporation, the agent shall meet the requirements of Title XVII of the Revised Code for an entity of the agent's type to transact business or exercise privileges in this state.

Amended by 130th General Assembly File No. 62, SB 98, §1, eff. 2/18/2014.

Effective Date: 06-06-2001

1746.05 Contents of trust agreement forming establishing business trust.

(A) Any person, singly or jointly with others, and without regard to residence or domicile, may form a business trust by signing a trust instrument which shall set forth:

(1) The name of the business trust;

(2) The place where the principal office of the business trust is to be located;

(3) The purpose or purposes for which the business trust is formed, which may consist of a statement that the purpose, either alone or with other specified purposes, is to engage in any lawful act or activity for which business trusts may be formed under this chapter. By such statement, all lawful acts and activities of the business trust conforming to the conditions and limitations, if any, specified in the trust instrument, are within the purposes of the business trusts;

(4) The authorized number, which may be unlimited, and the par value per share of shares of beneficial interest with par value, and the authorized number, which may be unlimited, of shares of beneficial interest without par value; the terms, if any, of the shares; the assessability or nonassessability of the shares; and, if the shares are classified, the designation of each class or series thereof, the authorized number and par value per share, if any, of the shares of each class or series thereof, and the terms of the shares of each class or series thereof;

(5) Any provision which restricts, or authorizes the trustees or the holders of shares of beneficial interest to restrict, the transferability of the shares.

(B) The trust instrument may also set forth such other provisions as are deemed necessary or appropriate to carry out the purposes for which the business trust was formed.

Effective Date: 03-18-1983

1746.06 Name.

(A) No business trust that has made a filing pursuant to section 1746.04 of the Revised Code may use the words "Incorporated," "Corporation," "Inc.," "Co.," "Partnership," "Ltd.," or derivatives thereof in its name.

(B) No business trust formed after the effective date of this chapter that has made a filing pursuant to section 1746.04 of the Revised Code shall assume the name of any corporation established under the laws of this state, or of a corporation, firm, or association, or trust whether or not as defined in section 1746.01 of the Revised Code, or of an individual, carrying on business in this state at the time when the business trust is created, or assume a name so similar thereto as to be likely to be mistaken for it, except with the written consent of such existing corporation, firm, association, or trust, or of such individual, previously or concurrently filed with the secretary of state.

(C) The secretary of state shall refuse to receive for filing the trust instrument of a business trust if it appears to the secretary of state to have violated any provision of this section. The courts of common pleas of this state shall have jurisdiction, upon the application of any person interested or affected, to enjoin a business trust from transacting business under any name in violation of any provision of this section, notwithstanding that the trust instrument of such business trust has been received for filing under section 1746.04 of the Revised Code.

(D) Any person who wishes to reserve a name for a proposed new business trust, or any business trust intending to change its name, may submit to the secretary of state a written application for the exclusive right to use a specified name as the name of a business trust. If the secretary of state finds that, under this section, the specified name is available for such use, the secretary of state shall indorse the secretary of state's approval upon and file such application and, from the date of such indorsement, such applicant shall have the exclusive right for one hundred eighty days to use the specified name as the name of a business trust, counting the date of such indorsement as the first of the one hundred eighty days. The right so obtained may be transferred by the applicant or other holder thereof by the filing in the office of the secretary of state of a written transfer stating the name and address of the transferee. For filing any application for the exclusive right to use a specified name under this division, the secretary of state shall charge and collect the fee specified in division (S)(1) of section 111.16 of the Revised Code. For each filing of a transfer of the right to an exclusive name under this division, the secretary of state shall charge and collect the fee specified in division (S)(4) of section 111.16 of the Revised Code.

(E) Any business trust that has not made the filings described under section 1746.04 of the Revised Code may submit to the secretary of state a written application for the exclusive right to use a specified name as the name of such business trust. If the secretary of state finds that, under this section, the specified name is available for such use, the secretary of state shall indorse the secretary of state's approval upon and file such application and, from the date of such indorsement, such applicant has the exclusive right to use the specified name for the period that it transacts business. The right so obtained may be transferred by the applicant or other holder thereof by the filing in the office of the secretary of state of a written transfer stating the name and address of the transferee. For filing an application for the exclusive right to use a specified name under this division, the secretary of state shall charge and collect the fee specified in division (S)(1) of section 111.16 of the Revised Code.

Effective Date: 06-06-2001

1746.07 Amendment of trust.

A trust instrument may be amended in the manner specified in it or in any manner that is valid under the common or statutory law applicable to the business trust created by the instrument.

Effective Date: 03-18-1983

1746.08 Trustees' qualifications and liabilities.

(A) Any individual or entity may be a trustee of a business trust; any trustee may own shares, including all of the shares, of the business trust.

(B) Unless otherwise set forth in the trust instrument, and notwithstanding section 1746.13 of the Revised Code, a trustee of a business trust that has made the filings described in section 1746.04 of the Revised Code shall be liable to the business trust, its shareholders, and its other trustees only to the same extent as a director of a corporation organized under Chapter 1701. of the Revised Code is liable to the corporation, its shareholders, and its other directors. A trustee of a business trust that has made the filings described in section 1746.04 of the Revised Code is not liable for the act or misconduct of a cotrustee in which he has not joined, to which he has not consented, and which he has not aided or made possible by his own neglect.

(C) The right, if any, of a trustee to enter into a contract or other transaction with the business trust of which he is trustee shall be as set forth in the trust instrument.

Effective Date: 03-18-1983

1746.09 General powers of business trust.

(A) Unless otherwise limited by the trust instrument, a business trust that has made the filings described in section 1746.04 of the Revised Code has the following general powers:

(1) To make contracts, incur liabilities, lend or borrow money and to receive or give security therefore; to sell, mortgage, lease, pledge, exchange, convey, transfer, and otherwise dispose of all or any part of its property and assets; to issue bonds, notes, and other obligations and secure them by mortgage or deed of trust of all or any part of its property, franchises, or income;

(2) To acquire by purchase or in any other manner and to take, receive, own, hold, use, employ, improve, encumber, dispose of, and otherwise deal in or with real or personal property or any interests in the property, wherever situated;

(3) To purchase, take, receive, subscribe for, or otherwise acquire, own, hold, vote, use, employ, sell, mortgage, loan, pledge, or otherwise dispose of, and otherwise use and deal in and with, securities, shares, or other interests in or obligations of domestic or foreign corporations, other business trusts, real estate investment trusts, associations, partnerships, and individuals, or direct or indirect obligations of the United States, any state, foreign government or municipal corporation, or any agency or instrumentality thereof;

(4) To offer for sale, receive subscriptions for, issue, sell, redeem, purchase, repurchase, grant options with respect to, dispose of or otherwise deal in and with its shares of beneficial interest;

(5) To elect or appoint trustees, officers, and agents of the business trust for the period of time the trust instrument or bylaws provides, to define the authority and duties of such trustees, officers, and agents, and to adopt and operate employee and officer benefit plans;

(6) To make and alter bylaws not inconsistent with law or with its trust instrument for regulating the government of the business trust and for the administration of its affairs;

(7) To sue and be sued, complain and defend, in all courts;

(8) To curtail or cease its trust activities;

(9) To exercise the foregoing powers in a business name of the trust, which may be a fictitious or assumed name, or in the name of one or more of its trustees or nominees, in either case by acting through one or more of its duly authorized trustees, officers, or agents;

(10) Generally, to exercise the powers set forth in its trust instrument and to do every other act or thing not inconsistent with law, which may be appropriate to promote and attain the purposes set forth in its trust instrument.

(B) The original or a copy of the record of the proceedings or meetings of holders of shares of beneficial interest in the trust estate of a business trust that has made the filings described in section 1746.04 of the Revised Code or of the trustees shall be prima-facie evidence of the facts stated therein when certified to be true by a trustee, secretary, or assistant secretary of the business trust. Every meeting referred to in such certified original or copy shall be deemed duly called and held, all motions and resolutions adopted and proceedings had at such meeting shall be deemed duly adopted and had, and all elections or appointments of trustees, officers, or agents chosen at such meeting shall be deemed valid, until the contrary is proven. If a person who is not a holder of a share of beneficial interest in the trust estate has acted in good faith in reliance upon any such certified original or copy of such record, it is conclusive in his favor.

(C) Any act taken by or on behalf of a business trust which is contrary to the provisions of its trust instrument shall be voidable.

Effective Date: 03-18-1983

1746.10 Interests in property.

(A) A business trust may take, hold, and dispose of any estate or interest in real or personal property in its business name, or in the name of one or more of its trustees, or in the name of one or more of its nominees. A conveyance to a business trust in its business name shall recite that the grantee is a business trust, and the estate or interest so acquired can be conveyed by the business trust only in its business name. Any estate or interest in real or personal property taken, held, or disposed of by a business trust in its business name prior to the effective date of this section is hereby confirmed as if the conveyance thereof had been made pursuant to the authority of this section.

(B) The fact that a recorded deed, mortgage, or other conveyance of an estate or interest in real or personal property designates a business trust or one or more trustees or nominees of a business trust as the grantee does not give notice to or put upon inquiry any person dealing with the property that there are any limitations on the power of such business trust, trustees, or nominees to dispose of or encumber the estate or interest specified in such conveyance, unless such conveyance specifically contains such limitations or incorporates by reference another instrument of record in the same county which specifically contains such limitations. As to all bona fide purchasers and encumbrancers of the property, a conveyance, release, or encumbrance by such business trust, trustees, or nominees transfers or releases the estate or interest in the property specified free from the claims of the holders of shares of beneficial interest in the trust estate and free from any obligation on the part of such purchaser or encumbrancer to see to the application of any purchase money or other consideration.

Effective Date: 03-18-1983

1746.11 Service of process.

Business trusts transacting business in this state are subject to all applicable provisions of law, rules of procedure, and rules of court relating to domestic or foreign corporations, with regard to service of process.

Effective Date: 03-18-1983

1746.12 Shares of beneficial interest.

(A) Unless otherwise provided in the trust instrument, shares of beneficial interest need not be evidenced by certificates.

(B) For purposes of Title XIII [13] of the Revised Code, shares of beneficial interest, however designated, in a business trust shall be treated as personal property, notwithstanding the nature of the property of which the business trust shall consist, and shall be subject to attachment and execution. Unless otherwise provided in the trust instrument, such shares may be pledged by the holders thereof.

(C) A share of beneficial interest in the trust estate of a business trust is a security subject to Chapter 1707. of the Revised Code.

Effective Date: 03-18-1983

1746.13 Liability to third persons - insurance.

(A) Liability to third persons for an act, omission, or obligation of a business trust that has made the filings described in section 1746.04 of the Revised Code or a trustee or trustees of a business trust when acting in such capacity, shall extend to the whole of the trust estate held by such trustee or trustees, or so much thereof as may be necessary to discharge such liability, but no such liability shall attach to the trustees, officers, employees, agents, or the holders of the shares of beneficial interest in such business trust for any such act, omission, or obligation.

(B) A business trust that has made the filings described in section 1746.04 of the Revised Code may purchase and maintain insurance on behalf of any person who is or was a trustee, officer, employee, shareholder, or agent of the business trust, or is or was serving at the request of the business trust as a director, trustee, officer, employee, or agent of another business trust, corporation, domestic or foreign, nonprofit or for profit, partnership, joint venture, trust, or other enterprise against any liability asserted against him and incurred by him in any such capacity, or arising out of his status as such, whether or not the trust instrument of the business trust contains provisions for indemnification of such person against such liability by the business trust.

(C) The trust estate of a business trust that has made the filings described in section 1746.04 of the Revised Code is not liable for any act, omission, or obligation of either of the following:

(1) Any holder of its shares of beneficial interest;

(2) Any trustee when not acting in such capacity.

Effective Date: 03-18-1983

1746.14 Perpetual period of existence.

Unless otherwise stated in the trust instrument, a business trust that has made the filings described in section 1746.04 of the Revised Code has a perpetual period of existence and is not affected by any rule against perpetuities. Nothing contained in this section shall be construed or interpreted to limit, prohibit, or invalidate any provision of a trust instrument providing that such business trust may be terminated at any time by action of the trustees or by the vote of a specified percentage in interest of the beneficial owners thereof.

Effective Date: 03-18-1983

1746.15 Withdrawal from state.

Any business trust that has made the filings described in section 1746.04 of the Revised Code may withdraw from this state at any time by filing in the office of the secretary of state a verified copy of a resolution duly adopted by its trustees declaring its intention to withdraw and surrender its authority, accompanied by the fee specified in division (T) of section 111.16 of the Revised Code.

Effective Date: 06-06-2001

1746.16 Forfeiture for violation of chapter.

(A) Any business trust that transacts business in this state in violation of this chapter shall forfeit not less than one thousand nor more than ten thousand dollars. Such forfeiture shall be recovered in an action in the name of the state brought in the court of common pleas of Franklin county, or in the court of common pleas of any county in which the business trust has transacted business or has property or a place of business, by the attorney general or the prosecuting attorney. If such action is brought by the attorney general, such forfeiture shall on collection be paid into the state treasury to the credit of the general revenue fund. If brought by the prosecuting attorney, one-half of such forfeiture shall on collection be paid to the treasurer of the county in which action was brought and one-half shall be paid into the state treasury to the credit of the general revenue fund. In addition to such forfeiture, the court shall render a judgment that the business trust pay the filing fees required by division (B) of section 1746.04 of the Revised Code, plus interest on the fees at the rate of eight per cent per annum for the time during which the court determines that the business trust transacted business in this state in violation of section 1746.03 of the Revised Code. An action for the recovery of such forfeiture and filing fee shall be brought within five years after the business trust has ceased to transact business in this state.

(B) For good cause shown, the secretary of state, with the consent of the attorney general, before or after judgment, or the court in which an action is pending for the collection of a forfeiture, may remit all or part of the forfeiture.

Effective Date: 03-18-1983

1746.17 Validity of contracts or titles not affected by violation.

(A) The transaction of business in this state by a business trust in violation of this chapter does not affect the validity of any contract with such trust, or the validity of the title to any estate or interest in real or personal property taken, held, or disposed of by such trust. No business trust that has transacted business in violation of this chapter, nor any persons acting on its behalf, shall maintain any action in any court of this state until it has fully complied with this chapter and further paid to the secretary of state a forfeiture of one thousand dollars.

(B) Full compliance with this section prior to the bringing of an action to recover a forfeiture under section 1746.16 of the Revised Code constitutes a bar to such action.

Effective Date: 03-18-1983

1746.18 Merger, consolidation, sale or other disposition of assets.

Any business trust may be a party, with one or more other entities, to an agreement of merger, consolidation, or sale, or other disposition of all or substantially all of its assets, provided that the agreement of merger, consolidation, or sale, or other disposition is approved in the manner set forth in the trust instrument or, if the trust instrument contains no procedure for such approval, by the holders of a majority of the shares of the business trust at a meeting held for such purpose.

Effective Date: 03-18-1983

1746.19 Foreign business trusts.

Chapter 1746: of the Revised Code is applicable to a foreign business trust that has made the filings described in section 1746.04 of the Revised Code, except to the extent that such provisions may be inconsistent with the applicable laws of the state or jurisdiction under which the foreign business trust was organized.

Effective Date: 03-18-1983

1746.20 False or fraudulent filings prohibited.

No person knowingly shall prepare, make, assist in preparing or making, or procure or advise the preparing or making of any false or fraudulent filings required or permitted by sections 1746.01 to 1746.20 of the Revised Code.

Effective Date: 03-18-1983

1746.99 Penalty.

Whoever violates section 1746.20 of the Revised Code shall be fined not more than ten thousand dollars.

Effective Date: 03-18-1983