The LLC’s business name must be different from all other business entity names registered or reserved with the State of Indiana Secretary of State.
Your new LLC’s name must include as its last words “Limited Liability Company,” “LLC,” or “L.L.C.” The name is allowed to (but doesn’t have to) contain the name of a member or manager. You can reserve an available name for up to 120 days for a $20 fee.
The filing time for Indiana LLCs is 7 Business days, and the expedited filing time is 2 business days.
State Filing Fees
The filing fee for Indiana businesses is $90, and can be expedited for an additional $30.
Articles of Organization and Operating Agreement
Forming an Indiana LLC requires filing articles of organization with the Corporations Division of the Indiana Secretary of State. The new LLC’s articles of organization must include:
- The LLC’s name
- The street address of the LLC’s registered office
- The name of the LLC’s registered agent
- Whether the LLC will be perpetual or have a set dissolution date
- Whether the LLC is to be member- or manager-managed
The articles can also list other items-even ones that are also in the operating agreement–if the members so designate, so long as the provisions don’t conflict with state law. The filing fee is $90.
Your new LLC is officially considered “organized” after the original and one copy of the LLC’s articles of organization are delivered to the Indiana Secretary of State’s office (Corporations Division) with the filing fee, and that office then verifies that the articles are in compliance with state law.
The articles must be executed (signed) by at least one organizer, who does not have to be a member of the LLC at or after formation. The organizer may be a natural person or a legal or commercial entity. The signing organizer must sign the articles and indicate his or her name and title within the LLC -i.e., the capacity in which the person is signing).
The operating agreement is also very important, it can be modified in a way that’s specified by the agreement itself, or however the law of the state permits. Having an operating agreement is not legally required by the state, but it’s a vitally important internal document that sets forth how the LLC will run. The operating agreement needs to list the LLC’s members, how much each one has invested, how any profits will be distributed, and how much relative weight each member has when voting.
The operating agreement may also include requirements for meetings (notice, quorum, voting rules, etc.) and similar functions, but it doesn’t have to. Usually, though, it does include operating constraints and allowances already contained in state law and policy. It also may contain constraints on the members’
authority to change or repeal the operating agreement or a provision thereof. If there is more than one member, the operating agreement must initially be unanimously approved in writing.
Membership in the LLC
LLCs in Indiana must have one or more members, and each member must be a natural person or a recognized business entity. A member can acquire an interest in the LLC when it is formed, or in a manner laid out in the operating agreement. Becoming a member usually requires a contribution of cash or property to the LLC (or taking on an obligation to do so), or it may take the form of services rendered to the LLC. If the operating agreement does not provide a procedure for becoming a member, however, a new member may acquire an interest in the LLC upon the written consent of all the members.
An LLC member can only resign as permitted in the articles of organization or operating agreement. For LLCs formed on or before June 30, 1999, a member may withdraw after giving 30 days’ written notice (or the amount of notice specified in the operating agreement) to the members, unless a written operating agreement provides that a member does not have the power to voluntarily withdraw from the LLC.
If the withdrawal violates the operating agreement, or the withdrawal occurs as a result of the member’s wrongful conduct, the LLC may recover damages for breach of the operating agreement, including the reasonable cost of replacing services that the withdrawn member was supposed to perform. The LLC may subtract the damages from any amount that would otherwise be distributed to the withdrawn member, in addition to pursuing any remedies provided for in the operating agreement or available under applicable law.
If the LLC has been formed for a specific time period or for a particular project or undertaking, a member’s withdrawal before the expiration of the term is a breach of the operating agreement, unless otherwise stated in a written operating agreement.
For companies formed after June 30, 1999, members may not withdraw from the LLC before its dissolution and the winding up of the LLC’s affairs, unless the operating agreement specifies otherwise. In fact, for these later LLCs, a member is allowed to withdraw from the LLC only at the time or upon the occurrence of events specified in the operating agreement, and in a manner in accordance with the operating agreement.
A specific membership vote to continue the LLC after the dissociation of a member is not required.
Unless specified otherwise in the LLC’s articles or operating agreement, managers are elected, removed, and replaced by a majority in interest of members, and serve for an indefinite term. A “majority in interest” means members who have contributed more than half of the LLC’s current capital.
It is required that Indiana LLCs must have a registered agent in the state-someone to receive state legal and administrative correspondence. An LLC registered agent may be an individual who resides in Indiana, or a business entity authorized to conduct business in the state. In both cases, the registered agent’s business office must be the same as the LLC’s registered office.
Ongoing Filing and Compliance
Indiana LLCs must file a biennial (every two years) report with the Secretary of State that includes:
- The LLC’s name
- The street or physical address of the LLC’s registered office
- The LLC’s registered in-state agent’s name at that office
- The address of the LLC’s principal office
- Any other information deemed necessary by the Secretary of State
The LLC’s first biennial report must be delivered in the anniversary month of the LLC’s formation in the second year after the LLC’s organization. Following biennial reports must be delivered to the secretary of state during the same month every two calendar years thereafter. Biennial reports may be accepted up to two months early.
LLCs in Indiana must also keep available the following types of records ready for inspection at their office:
- The full name and last known mailing address of all current and former members and managers
- A copy of the articles of organization and all amendments
- Copies of the LLC’s federal, state, and local income tax returns and financial statements, if any, for the past three
- Copies of all current and former written operating agreements, with amendments
- The amount of cash, if any, and a statement of the agreed value of other property or services contributed by each member, as well as the times or events that trigger any additional contributions agreed to be made by each member
- The events, if any, that would trigger the LLC’s dissolution
It’s also a good idea to keep copies of the minutes of the various proceedings and committees meetings of the owners or members.
An Indiana LLC formed on or before June 30, 1999, is dissolved when any one of the following events occurs:
- Event(s) or a time specified in the articles of organization or operating agreement
- Written agreement to dissolve by all members Event that makes it illegal for the LLC to continue
- When a member leaves the LLC, unless the remaining member agree to continue the LLC within 90 days, or the company continues under specifications set out in the operating agreement
- Upon a judicial decree ordering dissolution
- When more than 90 days after dissociation, the personal representative of the last remaining member agrees in writing to continue the business of the LLC and to admit the personal representative or the personal representative’s nominee or designee to the LLC as a member
An LLC by its nature offers some tax advantages over a corporation’s structure, including the availability of more deductions, since the LLC is not required to be a separate tax entity like a corporation. Instead, it is considered a “pass-through entity” for tax purposes, meaning LLC owners report business profits and losses on their individual tax returns.
Indiana tax rates vary based on income generated in the state.