Writers like to invoke Bob Dylan’s “The Times They Are A-Changin” album title, song title, and lyric concerning change when they refer to inevitable change (we just invoked those words too). Changing times in Indiana threaten administrative dissolution of for-profit and nonprofit corporations, LLCs, and other entities, so owners and managers need to keep up with changes in the Indiana’s corporate laws and the procedures of the Indiana Secretary of State that have emerged over the past year. This article describes how those changes will make some things easier, while other things will become impossible for all such entities (we use “entity” in this article as a general term that includes all for-profit and nonprofit corporations, LLCs, limited partnerships, limited liability partnerships, business trusts, and other organizations that must report to the Indiana Secretary of State).
Indiana law has required corporations and some other entities to file reports with the office of the Indiana Secretary of State to maintain the entities’ active status for many decades. The filing fees and filing frequency have changed from time to time, but the general rule has been that if an entity fails to file its report and pay the filing fee, the Secretary of State can “administratively dissolve” the entity. The general rule of the Indiana Code is that a dissolved entity cannot do business in any way except to wind up its affairs, pay its bills, and distribute its assets to the people or entities that are entitled to receive the assets upon the entity’s administrative dissolution.
The Indiana Code authorizes the owners or managers of a administratively dissolved entity to apply to the Indiana Secretary of State and the Indiana Department of Revenue for reinstatement of the entity’s activated status in good standing. An applicant must satisfy all of the entity’s tax-related filing obligations to secure a clearance letter from the Indiana Department of Revenue before the Indiana Secretary of State will act on the application. Then, the entity must file a current business entity report and pay business entity report filing fees for the years intervening since the entity’s administrative dissolution. When the Secretary of State reinstates the administratively dissolved entity, the reinstatement restores the entity’s status to good standing as if the entity had never been dissolved.
Three recent changes in Indiana law and procedure will probably result in permanent administrative dissolution of entities that can never be reinstated.
- Although it does not relate directly to administrative dissolution, every entity must give an email address for service of notice to the entity’s registered agent, the entity’s official recipient of all subpoenas, complaints, summons, and other legal notices.
- Every entity must also give an email address to which the Indiana Secretary of State will give business entity report reminders and other important communications (the Indiana Secretary of State will generally not give notices by mail).
- an entity’s owners or managers do not keep their email connections to the Indiana Secretary of State up-to-date AND TAKE STEPS TO NEVER EVER MISS AN EMAIL from the Indiana Secretary of State;
- the Indiana Secretary of State dissolves the entity because the entity failed to file its business entity report and pay the filing fee; and
- the entity does not apply for reinstatement within 5 years after administrative dissolution,
the entity will not qualify for reinstatement and it will be DISSOLVED FOREVER.
The 5-year limit on entity reinstatement results from 2018 legislation that Governor Holcomb signed in March 2018. People who want to reinstate administratively dissolved entities should engage a lawyer familiar with the subject and begin the reinstatement process right away to avoid the 5-year reinstatement limit. If you do not know the status of your entity, you can find the entity’s status on the Indiana Secretary of State website at: https://bsd.sos.in.gov/publicbusinesssearch.
Jeff R. Hawkins and Jennifer J. Hawkins are Trust & Estate Specialty Board Certified Indiana Trust & Estate Lawyers and active members of the Indiana State Bar Association and National Academy of Elder Law Attorneys. Both lawyers are admitted to practice law in Indiana, and Jeff Hawkins is admitted to practice law in Illinois. Jeff is also a registered civil mediator, a Fellow of the American College of Trust and Estate Counsel and the Indiana Bar Foundation; a member of the Illinois State Bar Association and the Indiana Association of Mediators; and he was the 2014-15 President of the Indiana State Bar Association.
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