In order to remain in good standing in the State of Indiana, business entities organized for profit (LLCs, LLPs, PCs, Corporations) are required to file a biennial “Business Entity Report,” along with a filing fee. Nonprofit corporations are required to file these reports annually. While it generally only takes around five minutes to file the reports online at inbiz.in.gov, the failure to timely do so may result in the Secretary of State administratively dissolving your business. Although an administratively dissolved business entity continues its existence, it may not carry on any business, except that business necessary to wind up and liquidate its business and affairs. This can have severe consequences. For example, title companies generally will not insure real estate closings if the buyer or seller of the property has been dissolved, and business owners often discover their failure to file their reports only after a closing date has been scheduled. Businesses may also be in danger of losing their corporate name, as the name becomes available for anyone to appropriate after 120 days of dissolution.
Luckily, the process for reinstating your business after a dissolution is relatively straightforward. The first step is to receive a “certificate of clearance” from the Indiana Department of Revenue (DOR), certifying that all past due taxes to the State have been paid. This necessitates the filing of a notarized affidavit and updated information about the responsible officers in the business. The DOR also may require additional documentation, such as copies of tax filings for the years the business entity reports were not filed.
Once the certificate of clearance is issued, the business has sixty (60) days to submit its application for reinstatement. The reinstatement application may be filed online inbiz.in.gov, and requires the business entity to pay all delinquent fees, taxes, interest and penalties at the time of filing the application. If the Secretary of State approves the application, the reinstatement relates back and takes effect as of the date of the dissolution, and the business may carry on as if it had never been dissolved.
The attorneys of Kroger Gardis & Regas routinely assist clients in reinstating their administratively dissolved business entities. If you have received a notice that your business has been administratively dissolved, or if you have any questions about the process of reinstatement, please contact Ted Nolting.
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