Formed March 4, 1786, the Ohio Company of Associates primarily consisted of former Revolutionary War military officers and soldiers from Massachusetts and surrounding states. Its main purpose was to acquire land in the Western Territory for settlement purposes. Its first directors were General Rufus Putnam, Reverend Manasseh Cutler, Major Winthrop Sargent, Captain Thomas Cushing, and Colonel John Brooks.

Putnam had participated in survey expeditions led by Thomas Hutchins and believed that the region had much potential for land speculation.

The company first chose Samuel Holden Parsons to represent their interests to the American government, but he was not successful and the company replaced him with the Reverend Manasseh Cutler. Cutler worked with Treasury Secretary William Duer and president of the Congress Arthur St. Clair to negotiate an arrangement for the purchase of the land. The Ohio Company of Associates purchased 1,500,000 acres of land, agreeing to pay $500,000 immediately and another $500,000 payment once survey work was finished. Congress allowed the company to pay for part of the land using military warrants, creating a very favorable arrangement for the investors. In the end, they paid about 8 1/2 cents per acre. In order to encourage settlement of the region and create a buffer zone between white settlements in Ohio Company of Associates territory and Native Americans, Congress also gave the Ohio Company of Associates 100,000 acres which became known as the Donation Tract, where any adult white male could obtain one hundred acres of free land. Although the survey pattern was somewhat different from that of the Seven Ranges, company investors were required to set aside land in each township for education and religion as well as three sections for future government purposes. In addition, two townships were set aside for a university.

Unable to raise the money for the second payment, the company settled for the 750,000 acres they had already paid for. This is called the Ohio Company first purchase. The U.S. Patent for the Ohio Company first purchase was issued May 10, 1792, by President George Washington. The first purchase contained 913,883 acres, including the reserved sections and townships.