Bill > SB146

This bill codifies the legal doctrine of "piercing the corporate veil" by establishing a new section in the Ohio Revised Code that defines the circumstances under which a governmental entity can hold individual persons responsible for a corporate entity's debts or penalties. The bill defines key terms such as "covered entity" (a corporation or similar organization), "covered person" (shareholders, officers, directors, or affiliates), and establishes strict criteria for piercing the corporate veil. Specifically, a governmental entity must prove that a covered person exerted such complete control over the entity that it had no separate existence, exercised that control to commit fraud or an illegal act, and caused the governmental entity to suffer an injury or loss. The bill also explicitly protects covered persons from liability for routine business activities like providing services, lending funds, sharing management, or making distributions. Importantly, the governmental entity bears the burden of proving all elements of its claim, and the bill emphasizes that it does not create new legal rights beyond what existed in common law, but rather formally defines the existing legal standards for piercing the corporate veil.

Justice

https://www.legislature.ohio.gov/legislation/136/sb146