The Business Entity Harmonization Act in 30 Seconds or Less
As many of our readers are aware, effective January 1, 2018, Indiana Senate Bill 443, known as the “Business Entity Harmonization Act,” will become law.  The Act includes significant changes to Indiana’s current business entity laws, many of which have been substantially unchanged since the 1990s.
The Indiana Business Law Survey Commission and the Indiana Secretary of State’s office have done a wonderful job hosting programming and providing information on these upcoming changes. However, for those of you who have not been able to attend one of these programs and during this busy holiday season do not have time to read through the new bill and announcements, this article overviews information and changes we think everyone needs to know.
1. INBiz system shut down starting New Years’ Eve.
- INBiz will be shut down 11:30 p.m. E.S.T. on December 31, 2017 until at least January 1, 2018 at 9 p.m. E.S.T. (provided there are no technical difficulties in the transaction)
- For those of you who want to ensure a January 1, 2018 effective date for any filing or new entity, filing now with a future effective date would be prudent
2. Administrative dissolutions will occur faster.
- Administrative dissolutions will now occur five (5) months after an entity receives a past due notice of its business entity report filings
- This is a change in the Indiana Secretary of State’s current policy, where we have in the past seen administrative dissolutions taking up to two (2) or more years
- It is now more important than ever to ensure your businesses take note of these entity reporting requirements and deadlines
3. LP and LLPs now file business entity reports.
- For all LP/LLPs formed before January 1, 2018, their first report is due by the end of the month of formation in 2019
- Any new LP/LLP formed on or after January 1, 2018 must file its report every two (2) years
4. Business names will be more restricted.
- The name for any new: domestic entities, foreign entities authorized to do business in Indiana, reserved names, or assumed names, must be distinguishable on the records from the name of any existing: domestic entity, foreign entity registered to do business in Indiana, reserved name, assumed name, and even domestic entity that has been administratively dissolved for less than one hundred (120) days
- With these new and stricter rules on naming, it will be more important to confirm availability of a name prior to filing
- And if a business wants to use the word “bank” (or derivative thereof) in its name, expect a delay in formation because the Secretary of State’s office must forward the information to the Department of Financial Institutions for review
5. New commercial registered agent (“CRA”) designation.
- Individual and organizations (e.g. law firms, accounting firms, etc.) can obtain this new designation by completing an application process
- INBiz will then provide those with this new designation an online portal where they can monitor and make changes to their contact information for all entities for which they serves as registered agent
6. Additional new provisions to Title 23.
- The “HUB” I.C. 23-0.5
- Includes standard rules for all entity types related to filings, names, registered agents, foreign entities, administrative dissolutions and various other miscellaneous provisions
- “META” I.C. 23-0.6
- Includes new and consolidated provisions addressing mergers, interest exchanges, conversions and domestications as to certain entity types
[i] P.L. 118-2017
Author Katie S. Riles
Katie (Cannon) Riles represents businesses and business owners in a variety of matters, including entity selection, formation and governance, shareholder disputes, mergers and acquisitions, and contract negotiation, drafting, and interpretation. Katie also assists individuals in estate and succession planning, business succession planning and other legal matters.
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Disclaimer: Article is made available for educational purposes only and is not intended as legal advice. If you have questions about any matters in this article, please contact the author directly.
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Posted on Dec. 22 2017 by Katie S. Riles