At BB&C, we’re committed to keeping you up to date on the latest changes directly affecting your business. Recently, Governor Holcomb signed into Indiana law Senate Enrolled Act 180, revising Indiana Codes 230.5 and 23-0.6. While several points were altered, the most important changes impact businesses who have been administratively dissolved or revoked. So, what does this mean for local businesses? We’ve broken it down for you.
What puts my business at risk of being administratively dissolved?
When a business fails to meet certain requirements within a specified time period, the Secretary of State will send a letter stating the entity has been administratively dissolved. The reasons can vary, but the top three culprits are:
- Not paying franchise, or privilege, taxes on time
- Not filing an annual report by the due date
- Not maintaining a registered agent or office
Most often, the cause is inadvertent. For example, an inexperienced administrative assistant responsible for filing the annual reports for hundreds of subsidiaries accidentally omits a few. Or the owner of an LLC mistakenly forgets to pay franchise taxes. Many times, people are unaware their business has been administratively dissolved. Whatever the cause, it’s important to take an administrative dissolution seriously because it puts the future of your business at risk. By continuing to operate, you can run into serious legal problems and even be held personally liable in the event of a lawsuit.
If your business has been administratively dissolved or revoked, take a deep breath. This can be reversed with a reinstatement; however, Senate Enrolled Act 180 has changed some important details.
How does Indiana Law Senate Enrolled Act 180 affect you?
The updated law changed the reinstatement procedure for businesses that have been administratively dissolved or revoked. If this happens to you, you now only have five years from the date of dissolution or revocation to file for reinstatement. For example, a business dissolved on January 1, 2017, must file an Application for Reinstatement by December 31, 2021. If the deadline is missed, the entity will no longer qualify for a reinstatement under most circumstances.
To get your business back in good standing, it’s important to carefully file an Application for Reinstatement with the state. Some key details to include are:
- A business name in accordance with Indiana law
- The date of administrative dissolution or revocation
- Proof the business fixed the issues that caused the dissolution
- A completed Business Entity Report
- A Certificate of Clearance confirming all taxes have been paid
Keep in mind, the Secretary of State has advised that the Department of Revenue can take between four to six weeks to issue a Certificate of Clearance. That means last-minute attempts to file a reinstatement application may not meet the deadline.
There is some good news amidst all of this. If your business has already been dissolved or revoked for more than five years, the Indiana Secretary of State’s office has announced a one-time exception to the rule. Businesses can still file for reinstatement, and applications are due by July 31, 2018. This is a time-bound, one-time offer, so businesses should take advantage of it while they still can.
Still wondering how Senate Enrolled Act 180 or other Indiana laws impact your business? At BB&C, we know the ins and outs of Indiana business law can get a little confusing. That’s why we partner every day with businesses just like yours to make sure you’re headed in the right direction. No matter the issue, we’re here to help. Reach out today with your questions. Contact Cecelia Neihouser Harper at 765-637-9175.
The content of this blog is intended to be general and informational in nature. It is advertising material and is not intended to be, nor is it, legal advice to or for any particular person, case, or circumstance. Each situation is different, and you should consult an attorney if you have any questions about your situation.