March 2, 2018

How Two Ohio House Bills Could Affect Business Owners

by Alexis V. Preskar, Kohrman, Jackson, & Krantz, LLP

The Ohio Legislature is considering two bills which would allow Ohio business owners more freedom in legal structure and day-to-day operations. The first, H.B. 545, would authorize the creation of benefit corporations, and the second, H.B. 263, would allow dogs on restaurant patios.

Public benefit corporations (B Corps) are “corporations created with a purpose of creating a general public benefit.” Traditionally, if a corporation focuses on creating a positive impact for the community to the detriment of shareholders, it can face liability. But since a B Corp explicitly writes a beneficial purpose into the articles of incorporation, the company can explore that purpose without the same shareholder risk. Ohio’s proposed law does not impose a duty on B Corps to their beneficiaries, nor are they liable for any damages “for any failure to seek, achieve, or comply with any beneficial purpose of the benefit corporation.” However, a B Corp may be subject to equitable remedies such as specific performance for failing to seek or comply with their beneficial purpose. The beneficial purpose covers causes such as art, music, education, medicine and religion.

H.B. 263, allowing pups on patios, has been hotly debated (in the court of public opinion at least). While it may seem some restaurants already allow dogs on patios, it is currently a violation of the health code. Advocates of the bill cite the positive effect on businesses, pets and owners of allowing dogs on patios; namely, businesses can gain the patronage of animal lovers and host adoption events for homeless pets. Opponents argue that allowing dogs on patios is unsanitary, unfair and unworkable for those with allergies, and could be dangerous if a dog is not properly controlled. The Franklin County Public Health Department and the Ohio Restaurant Association are in favor of the bill, though the Health Department has additional concerns including signage and waste disposal.

While these are seemingly minor issues, more options for business owners could be advantageous as Ohio continues to compete for businesses.