Ohio Code 1707.131 – Refusing registration
(A) For purposes of this section, “five per cent shareholder” means a beneficial owner of five per cent or more of the issuer‘s outstanding securities.
Terms Used In Ohio Code 1707.131
- Bank: means any bank, trust company, savings and loan association, savings bank, or credit union that is incorporated or organized under the laws of the United States, any state of the United States, Canada, or any province of Canada and that is subject to regulation or supervision by that country, state, or province. See Ohio Code 1707.01
- Beneficial owner: includes any person who directly or indirectly through any contract, arrangement, understanding, or relationship has or shares, or otherwise has or shares, the power to vote or direct the voting of a security or the power to dispose of, or direct the disposition of, the security. See Ohio Code 1707.01
- Director: means each director or trustee of a corporation, each trustee of a trust, each general partner of a partnership, except a partnership association, each manager of a partnership association, and any person vested with managerial or directory power over an issuer not having a board of directors or trustees. See Ohio Code 1707.01
- Issuer: means every person who has issued, proposes to issue, or issues any security. See Ohio Code 1707.01
- Registration by description: means that the requirements of section 1707. See Ohio Code 1707.01
- Trustee: A person or institution holding and administering property in trust.
(B) The division of securities shall refuse any registration by description, by qualification, or by coordination if the issuer is in the development stage and either has no specific business plan or purpose or has indicated that its business is to engage in a merger or acquisition with an unidentified company or companies, or other entities or persons.
(C) The division may refuse any registration by description, by qualification, or by coordination if either of the following applies:
(1) The issuer does not disclose in the final offering circular, prospectus, or form U-7 of the North American securities administrators association that any future transaction with an officer, director, five per cent shareholder, manager, trustee, or general partner will be on terms no less favorable to the issuer than could be obtained from an independent third party.
(2) The issuer does not disclose both of the following in the final offering circular, prospectus, or form U-7 of the North American securities administrators association:
(a) Any outstanding loan from the issuer to an officer, director, five per cent shareholder, manager, trustee, or general partner is required to be repaid within six months of the offering, except for a loan or extension of credit made by a bank.
(b) Any future loan from the issuer to an officer, director, five per cent shareholder, manager, trustee, or general partner will be for a bona fide business purpose and approved by a majority of the disinterested directors, managers, trustees, or general partners, or will be a type of transaction involving a director or executive officer of the issuer that is permitted by section 13(k) of the “Securities Exchange Act of 1934,” 116 Stat. 787, 15 U.S.C.A. 78m, as amended.