Ohio Convertible Promissory Note Overview
A convertible promissory note in Ohio is a debt instrument commonly used in startup financing that converts into equity upon a triggering event. As a security, it must comply with both federal regulations (SEC Rule 506 under Regulation D) and Ohio's state securities laws. The primary state exemption is: Section 1707.03 exemption.
Ohio requires Form D filing required when issuing convertible notes. The state provides enhanced protections for note holders through its securities regulatory framework. The interest rate must comply with Ohio's 8% usury limit, though most convertible note rates (2-8%) fall well below this threshold. Companies should work with an attorney familiar with Ohio securities law to ensure full compliance.
Available
Securities exemption
Required
SOS filing
8%
Usury rate
Enhanced
Investor protections
Ohio Requirements
Ohio has specific requirements for convertible promissory notes that both parties should understand before entering into the agreement.
- Interest Rate: Must not exceed Ohio's usury limit of 8%
- Written Agreement: Must be in writing and signed by the borrower (maker)
- Clear Terms: Principal amount, interest rate, payment schedule, and maturity date must be clearly stated
- Default Terms: Late fees, grace periods, and acceleration clause must comply with Ohio law
- Governing Law: The note should specify Ohio as the governing jurisdiction
How to Create a Ohio Convertible Promissory Note
Follow these steps to create a Ohio-compliant convertible promissory note using our template.
Enter Party Information
Provide the full legal names and Ohio addresses of both the lender (payee) and borrower (maker). Include the date the note is being executed.
Define Loan Terms
Specify the principal amount, interest rate (within Ohio's 8% usury limit), payment schedule, and maturity date. Our template calculates the payment breakdown automatically.
Set Default and Late Payment Terms
Define the grace period, late fee amount, acceleration clause triggers, and notice requirements. Our Ohio template includes compliant default language.
Sign and Execute
The borrower must sign and date the note. Consider notarization for added legal protection. Both parties should retain a copy. If secured by collateral, file the appropriate security instrument with Ohio's recording office.
Securities Compliance in Ohio
When issuing convertible promissory notes in Ohio, you must comply with the state securities exemption (Section 1707.03 exemption), file the required Form D filing required, ensure the interest rate stays within the 8% usury limit, and follow Ohio's investor protection requirements (enhanced protections). Federal Form D must be filed with the SEC within 15 days of the first sale. Our Ohio-specific template ensures compliance with both state and federal securities regulations.
Ohio Usury Warning
Ohio's usury limit is 8%. Charging interest above this rate can render your promissory note unenforceable and may subject the lender to penalties under Ohio law. Our template automatically validates your interest rate against Ohio's current limits.
Ohio Convertible Promissory Note FAQ
Answers to common questions about convertible promissory notes in Ohio.
Official Ohio Resources
Use these official resources to verify Ohio requirements for your convertible promissory note.
Other Ohio Promissory Note Types
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Create your Ohio Convertible Promissory Note in under 5 minutes.
Answer a few questions and download a Ohio-compliant document, ready for the state agency.