Once a corporate entity has been formed with the Indiana Secretary of State, the entity must routinely file business entity reports to retain its good standing with the Secretary of State. The business entity reports are due bi-annually, with the first report coming due two years from the date the entity is formed. If the business entity report is not filed timely, the entity is at risk of administrative dissolution by the Secretary of State. Pursuant to Indiana Code § 23-0.5-6-1, the Secretary of State may commence an administrative dissolution action if the entity does not:

1. pay any fee, tax, interest or penalty required to be paid by this article or other law not later than sixty (60) days after it is due;
2. deliver a biennial report to the secretary of state not later than sixty (60) days after it is due;
3. have a registered agent in this state for sixty (60) consecutive days; or
4. notify the secretary of state within sixty (60) days that its registered agent or registered office has been changed, that its registered agent has resigned, or that its registered office has been discontinued.

While some entities may miss a few years of filings and not yet be subject to administrative dissolution, we have seen a recent increase in the number of administrative dissolutions accompanied by a decrease in the length of time between a missed filing and the administrative dissolution. As such, it has become even more important to stay on top of your business entity filings to avoid having to initiate the process to reinstate an entity that was subject to administrative dissolution.

The business entity reports do not take much time to file and only require information that is readily available to the owners of the entity. Business entity reports may now be filed online through the Indiana Secretary of State’s website www.inbiz.in.gov. A filer will be required to have a subscriber account through the Secretary of State’s website, but that account will allow the subscriber to file again in the future on behalf of the entity. The filing fee to file online is about $32.00 after all services fees and charges, which is subject to change from time to time. To file a business entity report, the filer will be required to verify the principal address of the entity, the registered agent’s name and contact information, and the information of the entity’s principals. For a limited liability company, the principals may include the members and managers, while for a corporation, the principals would usually include the directors and officers of the entity. Since January 2018, the Indiana Secretary of State now requires an email address for the Registered Agent and the Registered Agent must consent to electronic service of process. With the Secretary of State’s Office now collecting email addresses, our clients will most often receive a notice prior to the business entity report coming due. This has helped to substantially decrease the number of administrative dissolutions with which our clients are faced.

In the event a business entity has become subject to an administrative dissolution, the reinstatement process is two-fold: First, the entity must obtain clearance from the Indiana Department of Revenue. In order to receive this clearance, all tax filings must be up-to-date for the business entity. Even if tax filings are current, the Indiana Department of Revenue may seek some additional information to confirm it has the accurate entity and information prior to issuing the Certificate of Clearance. We find that obtaining the Certificate of Clearance is usually the most time-consuming step of the two-fold process for reinstatement. Second, the entity will need to apply for reinstatement with the Indiana Secretary of State. Once the Department of Revenue issues the Certificate of Clearance for the entity, the entity has sixty (60) days from the date of the Certificate of Clearance to be reinstated with the Indiana Secretary of State. Otherwise, the Certificate of Clearance may expire and a new one will have to be obtained. Reinstatement with the Indiana Secretary of State can now be done online through the same subscriber account used to file the business entity reports. When filing for reinstatement, the entity will be required to pay the filing fees for the outstanding business entity reports due as of the date of reinstatement. The Certificate of Clearance will also be required with the application for Reinstatement.

Once an entity has been reinstated pursuant to Indiana Code § 23-0.5-6-3:

1. The reinstatement relates back to and takes effect as of the date of the administrative dissolution.
2. The entity resumes carrying on its activities and affairs as if the administrative dissolution had never occurred.
3. The rights of a person arising out of an act or omission in reliance on the dissolution before the person knew or had notice of the reinstatement are not affected.

Whether your business entity has been administratively dissolved, is at risk of administrative dissolution, or is in good standing and has other legal needs, contact CCHA’s business law group to discuss your unique situation. For more information about Leslie, please visit her profile.