WeVote
Log In

Bill

WeVote Research Nonpartisan
Bill Summary · SB 146

Legislative bill overview

SB 146 would codify into Ohio statute the existing common law doctrine of "piercing the corporate veil," which allows courts to hold shareholders personally liable for corporate debts under specific circumstances. Currently, Ohio courts apply this doctrine based on precedent rather than written law. The bill would establish statutory criteria and procedures for when piercing the veil is appropriate.

Why is this important

This affects business liability and creditor protections significantly. Small business owners, investors, and creditors operate under different legal certainty depending on whether the rule is codified versus judge-made. Codification provides clearer guidelines but also potentially locks in standards that could affect startup protections, family business structures, and creditor recovery options in bankruptcy or debt situations.

Potential points of contention

  • Business protection vs. creditor rights: Stricter codified standards might make it harder for creditors and injured parties to recover from wealthy shareholders, while proponents argue it protects legitimate business structures from overreach
  • Specificity of statutory criteria: Disagreement over which factors should trigger veil-piercing (inadequate capitalization, commingling funds, ignoring corporate formalities) and how strictly courts must apply them
  • Impact on small business formation: Concerns that clearer liability standards could discourage small business creation or increase insurance costs, versus arguments that predictability actually helps business planning

Compiled from official sources — confirm details with the bill’s official record.

Sign in to ask a question.