Ohio Code § 1701.95

Ohio Code § 1701.95. Reproduced from the official Ohio Revised Code, with a citation summary, verification link, and related provisions.

§ 1701.95.

(A)(1) In addition to any other liabilities imposed by law upon directors of a corporation

and except as provided in division (B) of this section, directors shall be jointly

and severally liable to the corporation as provided in division (A)(2) of this section

if they vote for or assent to any of the following: (a) The payment of a dividend or distribution, the making of a distribution of assets

to shareholders, or the purchase or redemption of the corporation's own shares, contrary

in any such case to law or the articles; (b) A distribution of assets to shareholders during the winding up of the affairs of

the corporation, on dissolution or otherwise, without the payment of all known obligations

of the corporation or without making adequate provision for their payment; (c) The making of a loan, other than in the usual course of business, to an officer,

director, or shareholder of the corporation, other than in either of the following

cases: (i) In the case of a savings and loan association or of a corporation engaged in banking

or in the making of loans generally; (ii) At the time of the making of the loan, a majority of the disinterested directors

of the corporation voted for the loan and, taking into account the terms and provisions

of the loan and other relevant factors, determined that the making of the loan could

reasonably be expected to benefit the corporation. (2)(a) In cases under division (A)(1)(a) of this section, directors shall be jointly and

severally liable up to the amount of the dividend, distribution, or other payment,

in excess of the amount that could have been paid or distributed without violation

of law or the articles but not in excess of the amount that would inure to the benefit

of the creditors of the corporation if it was insolvent at the time of the payment

or distribution or there was reasonable ground to believe that by that action it would

be rendered insolvent, plus the amount that was paid or distributed to holders of

shares of any class in violation of the rights of holders of shares of any other class. (b) In cases under division (A)(1)(b) of this section, directors shall be jointly and

severally liable to the extent that the obligations of the corporation that are not

otherwise barred by statute are not paid or for the payment of which adequate provision

has not been made. (c) In cases under division (A)(1)(c) of this section, directors shall be jointly and

severally liable for the amount of the loan with interest on it at the rate specified

in section 1343.03 of the Revised Code until the amount has been paid. (B)(1) A director is not liable under division (A)(1)(a) or (b) of this section if, in determining

the amount available for any dividend, purchase, redemption, or distribution to shareholders,

the director in good faith relied on a financial statement of the corporation prepared

by an officer or employee of the corporation in charge of its accounts or certified

by a public accountant or firm of public accountants, the director in good faith considered

the assets to be of their book value, or the director followed what the director believed

to be sound accounting and business practice. (2) A director is not liable under division (A)(1)(c) of this section for making any

loan to, or guaranteeing any loan to or other obligation of, an employee stock ownership

plan, as defined in section 4975(e)(7) of the Internal Revenue Code . (C) A director who is present at a meeting of the directors or a committee of the directors

at which action on any matter is authorized or taken and who has not voted for or

against the action shall be presumed to have voted for the action unless that director's

written dissent from the action is filed, either during the meeting or within a reasonable

time after the adjournment of the meeting, with the person acting as secretary of

the meeting or with the secretary of the corporation. (D) A shareholder who knowingly receives any dividend, distribution, or payment made

contrary to law or the articles shall be liable to the corporation for the amount

received by that shareholder that is in excess of the amount that could have been

paid or distributed without violation of law or the articles. (E) A director against whom a claim is asserted under or pursuant to this section and

who is held liable on the claim shall be entitled to contribution, on equitable principles,

from other directors who also are liable.  In addition, any director against whom a claim is asserted under or pursuant to

this section or who is held liable shall have a right of contribution from the shareholders

who knowingly received any dividend, distribution, or payment made contrary to law

or the articles, and those shareholders as among themselves also shall be entitled

to contribution in proportion to the amounts received by them respectively. (F) No action shall be brought by or on behalf of a corporation upon any cause of action

arising under division (A)(1)(a) or (b) of this section at any time after two years

from the day on which the violation occurs. (G) Nothing contained in this section shall preclude a creditor whose claim is unpaid

from exercising the rights that that creditor otherwise would have by law to enforce

that creditor's claim against assets of the corporation paid or distributed to shareholders. (H) The failure of a corporation to observe corporate formalities relating to meetings

of directors or shareholders in connection with the management of the corporation's

affairs shall not be considered a factor tending to establish that the shareholders

have personal liability for corporate obligations.

Source: official Ohio text · Last verified 2026-08-27

At a glance

  • Citation: Ohio Revised Code § 1701.95
  • Jurisdiction: Ohio
  • Code: Ohio Revised Code
  • Text: transcribed from the official source (verify below)

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Common questions

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