Ohio Constitution Article XIII - Corporations
Ohio Constitution – Article XIII: Corporations
This article provides the framework for the creation, regulation, and governance of corporations, excluding municipal corporations, in the state of Ohio. Here's a section-by-section summary:
Section 1 – Formation under General Laws
Corporations must be formed only under general laws.
The General Assembly cannot create corporations by special acts, except for municipal corporations.
Section 2 – Revocable Charters
All laws related to corporations may be altered or repealed.
This makes corporate charters subject to change or elimination by the legislature.
Section 3 – Corporate Powers Defined
The General Assembly must define the powers and liabilities of corporations and their officers.
These must be clearly stated in the general laws under which the corporations are formed.
Section 4 – Equal Treatment of Corporations
Corporations have no special privileges or immunities not available to individuals or other corporations.
Section 5 – Stockholder Liability
Stockholders are liable only to the extent of their unpaid stock.
No personal liability beyond the value of their shares.
Section 6 – No Retroactive Corporate Laws
Laws affecting corporations cannot be made retroactive.
This ensures that new laws won't apply to corporate actions that occurred before the law was enacted.
Section 7 – Banks and Currency
This section is obsolete due to the federal control of banking and currency, but it originally limited the General Assembly’s ability to create banking institutions without a popular vote.
Section 8 – Consolidation of Corporations
The General Assembly is prohibited from allowing mergers or consolidations of competing corporations that would lead to monopolies or restrain trade.
Section 9 – Foreign Corporations
Foreign corporations must comply with Ohio laws and can be regulated just like domestic corporations.
The General Assembly can prevent any corporation from conducting business in the state if it refuses to comply.
Section 10 – Transportation Corporations
Railroad and transportation companies are subject to special regulations.
The General Assembly can regulate their charges, practices, and ensure public safety.
Section 11 – Shareholder Voting
In corporate elections, each shareholder has the right to vote for directors or managers in proportion to the number of shares they own.
Overall Summary:
Article XIII establishes a strong legislative authority over corporations, prohibits monopolistic behavior, enforces shareholder rights, and demands equality between corporations and individuals. It also ensures foreign corporations operate under Ohio law.
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