Administrative Dissolution Indiana
When dealing with administrative dissolution in Indiana, the state can take away certain rights and authority over a business.3 min read
2. Reinstatement of Dissolved Indiana LLCs
3. Indiana Code for Administrative Dissolution
When dealing with administrative dissolution in Indiana, the state can take away certain rights and authority over a business.
Administrative Dissolution of an LLC
Limited liability companies (LLCs) can last forever as long as the company follows the correct formalities. This is different from a sole proprietorship or partnership, which ends if owners die.
However, businesses don't necessarily last forever. Occasionally, owners elect to end the business or the business ends involuntarily. If it ends involuntarily, the business may end with administration dissolution.
LLCs begin when owners file articles of organization with the secretary of state. The owners can also end the business voluntarily if they file articles of dissolution, also with the secretary of state.
In addition, the state can involuntarily dissolve an Indiana LLC through administrative dissolution. This occurs when an LLC fails to file timely annual reports or doesn't follow specific procedural requirements.
In Indiana, the secretary of state can initiate administrative proceedings if one of the following occurs:
- The LLC doesn't file its biennial report 60 days after its due date
- The LLC doesn't have a registered agent or office for at least 60 days
- The LLC's articles of organization specify a date for dissolution
When an administrative dissolution occurs, the business cannot operate except to finalize its affairs and close its doors. The LLC may need to alert business partners, creditors, and customers if this occurs. It may also need to liquidate assets and allocate them among the LLC members.
The LLC may avoid ending the business if it receives an administrative dissolution. Typically the LLC owners must fix the aspect that caused the administrative dissolution, although additional fees may apply.
Reinstatement of Dissolved Indiana LLCs
Those entities created or registered to conduct business in Indiana can experience administrative dissolution if they file periodic reporting with the secretary of state in Indiana. They can file reinstatement documents such as a tax clearance form from the Indiana Department of Revenue.
There is a five-year deadline on administratively dissolved businesses to file for reinstatement. You shouldn't delay your applications for reinstatement. You must obtain a certificate of clearance from the Indiana Department of Revenue. The entire process usually takes between four and six weeks.
If for some reason you miss the five-year deadline, you cannot file an application for reinstatement and must create a new entity.
Once you obtain reinstatement, it dates back to the effective date of revocation or dissolution. You can continue operations as if you never experienced revocation or dissolution.
Indiana Code for Administrative Dissolution
When it comes to administrative dissolution in Indiana, the secretary of state administers many of its rules and regulations. Section 1 of the Indiana Code 23-18-10-1 states the specifics of administrative dissolution.
After examining the LLC, if the secretary of state determines that it has one or more reasons under section 1 for dissolving, it can serve the LLC with a written notice of the determination under IC 23-18-2-13.
If the LLC doesn't fix any issue or show satisfaction that the reason doesn't exist within a 60-day timeframe, then the secretary of state can dissolve the LLC by signing a certificate of dissolution. This form has the reasons for dissolution and its effective date.
An LLC that administratively dissolves can still exist but cannot carry on any business except to liquidate its business and affairs. This falls under IC 23-18-9-4, IC 23-18-9-8, and IC 23-18-9-9.
An LLC can apply for reinstatement. The application must have all the correct information, and the secretary of state determines the next course of action. Its options include:
- Canceling the certificate of dissolution and administering a certificate of reinstatement, which must include the determination and effective reinstatement date
- Filing the original certificate
- Serving a copy of the LLC
If it denies an LLC's application for reinstatement, the secretary of state must provide a written notice that explains the reasons for denial. In response, the LLC may appeal the reinstatement denial and go before the circuit or superior court of the county or its registered office. It must go no later than 30 days after receiving the notice. From there, the LLC must:
- File a petition with the court to set aside the dissolution
- Provide a copy of the secretary of state's certificate of dissolution, the LLC's application for reinstatement, and the secretary of state's denial notice
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