Tag Archives: Indiana

Case Law Update

4th Amendment

Navarette v. California, SCOTUS April 22, 2014

Under the totality of the circumstances, which began when an anonymous 911 caller reported that a vehicle had run her off the road, police officer had reasonable suspicion that the driver was intoxicated so that officer’s traffic stop complied with the Fourth Amendment.

Richard v. State, Ind. Ct. App. April 23, 2014

A police dog’s alert to the presence of narcotics in a vehicle is enough to give an officer probable cause to arrest and search the vehicle’s passenger.

Criminal Law 

Wilhoite v. State, Ind. Ct. App. April 23, 2014

There is no crime of conspiracy to commit an attempt to commit a crime.  (Read that 5 times fast.)


Taylor v. State, Ind. Ct. App. April 24, 2014

Trial court cannot deny an expungement based on a victim’s statement.

Custody Modification

Bailey v. Bailey, Ind. Ct. App. April 22, 2014

A trial court cannot modify custody when neither party requests a modification of custody.


In re B.C.H. Ind. Ct. App. April 22, 2014

Grandparents were found to not be lawful custodians as statutorily required for notice and consent of their grandchild’s adoption.



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Case Law Update

Venue and Jurisdiction

Goodman v. SeRine Ind.Ct.App. March 31, 2014

Although the sellers’ bankruptcy action had been dismissed, the bankruptcy court that heard the bankruptcy action was the proper venue for a quiet title action on property that was a part of the bankruptcy estate.

Commercial Speech

Miller v. Fed Ex Ind.Ct.App. April 4, 2014

Fed Ex was found immune from suit under the Federal Communications Decency Act as they are providers of an interactive computer service, as defined under Section 230(c).  To qualify for immunity, Fed Ex had to show that they were a provider of an interactive computer service, that the action treated them as the publisher of the information and that the information was provided by another content provider; they successfully did so.


Metzger v. State Ind.Ct.App. Mar. 31, 2014

When a blood draw warrant had been issued for a driver who had refused a breath test, the driver’s refusal to cooperate with the blood draw was properly found to be in indirect criminal contempt.


Wilson v. State Indiana Supreme Court April 1, 2014

A “hybrid” sentence for multiple convictions arising out of the same factual circumstance is not authorized by statute.  The trial court, in sentencing a criminal to a partially concurrent and partially consecutive term, acted outside of its authority.


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Administrative Dissolution

Imagine moving along day-by-day, business as usual, when you receive mail from the Indiana Secretary of State notifying you that your company has been administratively dissolved.  Some would panic, some would throw the notice away without reading it and some would call their registered agent and/or attorney to figure out just what was going on.  We strongly suggest the latter, understand the panic and advise you to read your mail.

Indiana Code 23-1-46-1 provides:

The secretary of state may commence a proceeding under section 2 of this chapter to administratively dissolve a corporation if:

1) the corporation does not pay within sixty (60) days after they are due any franchise taxes or penalties imposed by this article or other law;

2) the corporation does not deliver for filing its biennial report to the secretary of state within sixty (60) days after it is due;

3) the corporation is without a registered agent or registered office in this state for sixty (60) days or more;

4) the corporation does not notify the secretary of state within sixty (60) days that its registered agent or registered office has been changed, that its registered agent has resigned, or that its registered office has been discontinued; or

5) the corporation’s period of duration stated in its articles of incorporation expires.

Failing anyone of these options will result in the Secretary of State dissolving the corporation administratively.  This means that your company is not legally allowed to carry on any business except that business which involves winding up and dissolution.

If you timely respond to the notice provided by the Secretary of State and correct each ground for dissolution to the reasonable satisfaction of the Secretary of State within 60 days, you can avoid this administrative dissolution.  Many small business (if not all) will struggle to survive if they cannot produce revenue over time and may lose clients permanently due to this administrative dissolution.  Once the dissolution is completed, however, there is a reinstatement process that can take up to two to three months.

The reinstatement process is relatively simple and can be completed by you, your registered agent or attorney.  The process includes the following:

Step 1:

Complete forms AD19 Reinstatement Affidavit and ROC-1 Responsible Officer Information forms.  Mail these forms to the Indiana Department of Revenue, and allow at least four weeks for processing.  Once you receive your Certificate Clearance stating that no tax is owed by the entity, continue forward.

Step 2:

Complete State Form 4160 Application for Reinstatement.

Step 3:

Complete State Form 48725 Business Entity Report and pay the filing fees ($15.00 for for-profit entities, $10.00 for non-profit entities) for all years owed.

Step 4: Mail all forms with the Certificate of Clearance from the Department of Revenue to the Secretary of State, along with all fees ($30.00 Reinstatement fee plus all business entity report filing fees.)

Everything must be mailed together and a check or money order must be sent.  No Cash!

Once everything is processed and the Secretary of State is satisfied with your application, your corporation will be reinstated.

What is the lesson from all of this?  Stay on top of your company.  Be organized and practice ordinary business diligence.  Be sure to stay informed, and have a knowledgable registered agent that can assist you with your corporation’s legal maintenance.



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Operating Agreements in your Business Plan

We are often asked about how easy it is to “set-up” a Limited Liability Company in Indiana.  The response, in all reality, is easy.  Really easy.  By filling out a few forms for the Secretary of State, you can have an LLC within a few days of application.

But the true reason entrepreneurs seek an attorney for their start-up is not to simply create the LLC.  If that’s all the client wanted, they would buy “Incorporating for Dummies” and go along with their business venture as they see fit.  The purpose for seeking an attorney is to draft a complete Operating Agreement that acts as your business’s governing document.

The Operating Agreement can be as simple as a one page document to as complex as the Internal Revenue Code.  The following are a few provisions, however, that every Operating Agreement should have, regardless of complexity, size or business purpose.

Dissolution and Winding Up

It is important to hash out prior to the creation of your entity how you will dissolve that entity if the entity fails or runs it’s course.  The reason behind this is pretty obvious; when the time comes that the business is failing, the last thing on your mind will be an orderly, responsible dissolution of the company.  Planning ahead for this will save time, money and relationships between business partners.

Transfer of Membership

You may need to discuss the transfer of ownership in any entity.  Often times, Members of an LLC will wish to have first rights of refusal over any transfer of membership.  These provisions will help protect the distribution of future interests to certain individuals, and allow for the already vested Members to have an opportunity to buy out the share of membership attempting to be transferred.

Qualified Income Offset Provision

The Qualified Income Offset (or “QIO”) provision saves Members of an LLC a lot of tax grief and expense.  The purpose of the provision is to protect the Member from unanticipated distributions of expenses and deductions that drive the Member’s capital account below zero.  This provision forces the accounting to automatically apply revenue and income to the Member’s account first until his account reaches, or goes above, zero.

But why is this necessary? 

If your LLC’s Operating Agreement does not include a QIO, then come tax day you’ll be in for a rude awakening.  Without the QIO, your allocations may not have substantial economic effect, and without substantial economic effect, the IRS will not respect your allocations.  This can throw your entire accounting plan out the window, and require you to pay an inordinate amount in taxes that you otherwise were not expecting to have to pay.  This, of course, will be avoided if you choose to be taxed as a corporation under Subchapter C of the Internal Revenue Code.

Minimum Gain Chargeback (“MGC”)

If you’re going to pledge collateral for a loan that you will not be personally guaranteeing (often times advisable), then you will need an MGC provision.  This provision is required to be included in your agreement if you want to allocate in any other manner other than the default allocation method based on your interest in your entity.

These four provisions can save you a lot of headaches when it comes to your business entity.  Without them, you risk large problems in the future that could potentially cripple all of your hard work.



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