Citations Affected: IC 23-1.
Synopsis: Business corporation law. Makes changes and additions to
business corporation law provisions concerning the following: (1)
requirements for, effective dates of, and corrections of documents; (2)
appealing a refusal of a filing of a document; (3) definitions; (4) notice
requirements; (5) corporate names; (6) terms and conditions of rights,
options, and warrants for the purchase of shares or other securities; (7)
meetings of shareholders; (8) record dates for determining shareholders
entitled to demand a special meeting; (9) terms of office of directors;
(10) effective date of a notice of resignation; (11) actions taken by
board of directors without a meeting; (12) standards of conduct for
directors; (13) conversion; (14) bylaws; (15) merger or share exchange;
(16) disposition of assets; and (17) dissenters' rights. Repeals a
provision that requires a corporation to report to shareholders an
indemnification or advance of expenses to a director and the issuance
of shares for a promissory notes or for promises to render services.
Effective: July 1, 2009.
January 14, 2009, read first time and referred to Committee on Judiciary.
A BILL FOR AN ACT to amend the Indiana Code concerning
business and other associations.
authenticated English translation.
(f) The document must be executed: signed:
(1) by the chairman of the board of directors of the domestic or
foreign corporation or by any of its officers;
(2) if directors have not been selected or the corporation has not
been formed, by an incorporator;
(3) if the corporation is in the hands of a receiver, trustee, or other
court appointed fiduciary, by that fiduciary; or
(4) for purpose of annual or biennial reports, by:
(A) a registered agent;
(B) a certified public accountant; or
(C) an attorney;
employed by the business entity.
(g) Except as provided in subsection (m), the person executing
signing the document shall sign it and state beneath or opposite the
signature the person's name and the capacity in which the person signs.
document is signed. A signature on a document authorized to be filed
under this article may be:
(1) a facsimile; or
(2) made by an attorney in fact.
(h) A power of attorney relating to the signing of a document
authorized to be filed under this article by an attorney in fact may but
is not required to be:
(1) sworn to, verified, or acknowledged;
(2) signed in the presence of a notary public;
(3) filed with the secretary of state; or
(4) included in another written agreement.
However, the power of attorney must be retained in the records of the
corporation.
(i) A document authorized to be filed under this article may but is
not required to contain:
(1) the corporate seal;
(2) an attestation by the secretary or an assistant secretary; and
(3) an acknowledgment, verification, or proof.
(j) If the secretary of state has prescribed a mandatory form for the
document under section 2 of this chapter, the document must be in or
on the prescribed form.
(k) The document must be delivered to the office of the secretary of
state for filing as described in section 1.1 of this chapter and the correct
filing fee must be paid in the manner and form required by the
secretary of state.
(l) The secretary of state may accept payment of the correct filing
fee by credit card, debit card, charge card, or similar method. However,
if the filing fee is paid by credit card, debit card, charge card, or similar
method, the liability is not finally discharged until the secretary of state
receives payment or credit from the institution responsible for making
the payment or credit. The secretary of state may contract with a bank
or credit card vendor for acceptance of bank or credit cards. However,
if there is a vendor transaction charge or discount fee, whether billed
to the secretary of state or charged directly to the secretary of state's
account, the secretary of state or the credit card vendor may collect
from the person using the bank or credit card a fee that may not exceed
the highest transaction charge or discount fee charged to the secretary
of state by the bank or credit card vendor during the most recent
collection period. This fee may be collected regardless of any
agreement between the bank and a credit card vendor or regardless of
any internal policy of the credit card vendor that may prohibit this type
of fee. The fee is a permitted additional charge under IC 24-4.5-3-202.
(m) A signature on a document that is transmitted and filed
electronically is sufficient if the person transmitting and filing the
document:
(1) has the intent to file the document as evidenced by a symbol
executed or adopted by a party with present intention to
authenticate the filing; and
(2) enters the filing party's name on the electronic form in a
signature box or other place indicated by the secretary of state.
(n) As used in this subsection, "filed document'' means a
document filed with the secretary of state under any provision of
this title except for IC 23-1-49 or IC 23-1-53-3. As used in this
subsection, "plan" means a plan of domestication, nonprofit
conversion, entity conversion, merger, or share exchange.
Whenever a provision under this article permits any of the terms
of a plan or a filed document to be dependent on facts objectively
ascertainable outside the plan or filed document, the following
apply:
(1) The manner in which the facts will operate upon the terms
of the plan or filed document:
(A) shall be set forth in the plan or filed document; and
(B) shall state the manner in which the facts shall become
operative.
(2) The facts may include, but are not limited to:
(A) any of the following that is available in a nationally
recognized news or information medium either in print or
electronically:
(i) Statistical or market indices.
(ii) Market prices of any security or group of securities.
(iii) Interest rates.
(iv) Currency exchange rates.
(v) Similar economic or financial data;
(B) a determination or action by any person or body,
including the corporation or any other party to a plan or
filed document; or
(C) the terms of, or actions taken under, an agreement to
which the corporation is a party, or any other agreement
or document.
(3) The following provisions of a plan or filed document may
not be made dependent on facts outside the plan or filed
document:
(A) The name and address of any person required in a filed
document.
(B) The registered office of any entity required in a filed
document.
(C) The registered agent of any entity required in a filed
document.
(D) The number of authorized shares and designation of
each class or series of shares.
(E) The effective date of a filed document.
(F) Any required statement in a filed document of the date
on which the underlying transaction was approved or the
manner in which that approval was given.
(4) If a provision of a plan or filed document is made
dependent on a fact ascertainable outside the plan or filed
document, and that fact is not ascertainable by reference to a
source described in subdivision (2)(A) or a document that is
a matter of public record, or the affected shareholders have
not received notice of the fact from the corporation, the
corporation shall file with the secretary of state articles of
amendment setting forth the fact promptly after the time the
fact referred to is first ascertainable or changes. Articles of
amendment under this subdivision:
(A) are considered to be authorized by the authorization of
the original plan or filed document or plan to which the
articles of amendment relate; and
(B) may be filed by the corporation without further action
by the board of directors or the shareholders.
FOLLOWS [EFFECTIVE JULY 1, 2009]: Sec. 4. (a) Except as
provided in subsection (b) and section 5(c) of this chapter, a document
accepted for filing is effective:
(1) at the time of filing on the date it is filed, as evidenced by
means the secretary of state's date and time endorsement state
uses for endorsing the date and time of filing on the original
document; or
(2) at such later time on the date it is filed as is specified in the
document as its effective time on the date it is filed.
(b) A document may specify a delayed effective time and date, and
if it does so the document becomes effective at the time and date
specified. If a delayed effective date but no time is specified, the
document is effective at 12:01 a.m. on that date. A delayed effective
date for a document may not be later than the ninetieth day after the
date it is filed.
office for filing, the domestic or foreign corporation may appeal the
refusal to the circuit or superior court of the county where the
corporation's principal office (or, if none in Indiana, its registered
office) is or will be located not later than sixty (60) days after the
receipt of the document from the secretary of state. The appeal is
commenced by petitioning the court to compel filing the document and
by attaching to the petition the document and the secretary of state's
explanation of the refusal to file.
(b) The court may order the secretary of state to file the document
or take other action the court considers appropriate.
(c) The court's final decision may be appealed as in other civil
proceedings.
limited liability company, limited liability partnership, limited
partnership, general partnership, business trust, or real estate
investment, trust, or any entity that:
(1) is formed under the requirements of applicable law; and
(2) is not a corporation.
or bylaws prescribe notice requirements not inconsistent with this
section or other provisions of this article, those requirements govern.
(h) Written notice, including reports or statements from the
corporation, to shareholders who share a common address is
effective if:
(1) the corporation delivers one (1) copy of a notice, report, or
statement to the common address;
(2) the corporation addresses the notice, report, or statement
to the:
(A) shareholders either as a group or to each of the
shareholders individually; or
(B) shareholders in a form in which each of the
shareholders has consented; and
(3) each of the shareholders consents to delivery of a single
copy of the notice, report, or statement to the common
address of the shareholders.
Consent given under subdivision (3) is revocable by a shareholder
who delivers written notice of revocation to the corporation. If a
shareholder delivers written notice of revocation to a corporation,
the corporation shall begin providing individual notices, reports,
or other statements to the shareholder not later than thirty (30)
days after delivery of the written notice of revocation.
(i) A shareholder who fails to object to the receipt of the notice,
report, or statement at a common address by written notice to the
corporation within sixty (60) days after written notice by the
corporation of the corporation's intention to send single copies of
notices to shareholders who share a common address as permitted
by subsection (h) is considered to have consented to receiving a
single copy at the common address.
from:
(1) the corporate name of a corporation or other business entity
incorporated or authorized to transact business in Indiana;
(2) a corporate name reserved or registered under section 2 or 3
of this chapter; and
(3) a fictitious name adopted by a foreign corporation
authorized to transact business in Indiana because the foreign
corporation's true name was unavailable; and
(3) (4) the corporate name of a not-for-profit corporation
incorporated or authorized to transact business in Indiana.
(c) A corporation may apply to the secretary of state for
authorization to use a name that is not distinguishable upon the
secretary of state's records from one (1) or more of the names described
in subsection (b). The secretary of state shall authorize use of the name
applied for if:
(1) the other corporation files its written consent to the use, signed
by any current officer of the corporation; or
(2) the applicant delivers to the secretary of state a certified copy
of the final judgment of a court of competent jurisdiction
establishing the applicant's right to use the name applied for in
Indiana.
(d) A corporation may use the name, including the fictitious name,
of another domestic or foreign corporation that is used in Indiana if the
other corporation is incorporated or authorized to transact business in
Indiana and the proposed user corporation:
(1) has merged with the other corporation;
(2) has been formed by reorganization of the other corporation; or
(3) has acquired all or substantially all of the assets, including the
corporate name, of the other corporation.
(e) A bank holding company (as defined in 12 U.S.C. 1841) may use
the word "bank" or "banks" as a part of its name. However, this
subsection does not permit a bank holding company to advertise or
represent itself to the public as affording the services or performing the
duties that a bank or trust company only is entitled to afford and
perform.
(f) Except as provided in IC 23-1-49-6, this article does not control
the use of fictitious names.
consideration consisting of any tangible or intangible property or
benefit to the corporation, including cash, promissory notes, services
performed, contracts for services to be performed, or other securities
of the corporation. If shares are authorized to be issued for promissory
notes or for promises to render services in the future, the corporation
must comply with IC 23-1-53-2(b).
(c) The corporation may issue shares for such consideration
received or to be received as the board of directors determines to be
adequate. That determination by the board of directors is conclusive
insofar as the adequacy of consideration for the issuance of shares
relates to whether the shares are validly issued, fully paid, and
nonassessable.
(d) When the corporation receives the consideration for which the
board of directors authorized the issuance of shares, the shares issued
therefor are fully paid and nonassessable.
(e) The corporation may (but is not required to) place in escrow
shares issued for a contract for future services or benefits or a
promissory note, or make other arrangements to restrict the transfer of
the shares, and may (but is not required to) credit distributions in
respect of the shares against their purchase price, until the services are
performed, the note is paid, or the benefits received. If the services are
not performed, the note is not paid, or the benefits are not received, the
shares escrowed or restricted and the distributions credited may be
cancelled in whole or in part.
securities of the corporation; or
(B) a transferee of the person described in clause (A); or
(2) invalidate or void the rights, options, or warrants held by
the person described in subdivision (1)(A) or a transferee
described in subdivision (1)(B).
convertible into or carrying a right to subscribe for or acquire shares.
bylaws; or
(2) if the holders of at least twenty-five percent (25%) of all the
votes entitled to be cast on any issue proposed to be considered at
the proposed special meeting sign, date, and deliver to such
corporation's secretary one (1) or more written demands for the
meeting describing the purpose or purposes for which it is to be
held.
(c) Special shareholders' meetings may be held in or out of Indiana
at the place stated in or fixed in accordance with the bylaws. If no place
is stated or fixed in accordance with the bylaws, special meetings shall
be held at the corporation's principal office.
(d) If not otherwise fixed under section 3 or 7 of this chapter, the
record date for determining shareholders entitled to demand a
special meeting is the date the first shareholder signs the demand.
(d) (e) Only business within the purpose or purposes described in
the meeting notice required by section 5(c) of this chapter may be
conducted at a special shareholders' meeting.
(e) (f) If the articles of incorporation or bylaws so provide, any or all
shareholders may participate in a special meeting of shareholders by,
or through the use of, any means of communication by which all
shareholders participating may simultaneously hear each other during
the meeting. A shareholder participating in a meeting by this means is
deemed to be present in person at the meeting.
a meeting, action required or permitted by this article to be taken at a
board of directors' meeting may be taken without a meeting if the
action is taken by all members of the board. The action must be:
(1) evidenced by one (1) or more written consents describing the
action taken;
(2) signed by each director; and
(3) included in the minutes or filed with the corporate records
reflecting the action taken; and
(4) delivered to the secretary.
(b) Action taken under this section is effective when the last director
signs the consent, unless the consent specifies a different prior or
subsequent effective date. A director's consent may be withdrawn
by a revocation signed by the director and delivered to the
corporation before the delivery to the corporation of unrevoked
written consents signed by all the directors.
(c) A consent signed under this section has the effect of a meeting
vote and may be described as such in any document.
transaction.
(c) For purposes of subsection (a)(2), a business opportunity is
disclaimed if approved in the manner provided in IC 23-1-35-2(d)
as if the business opportunity were a conflict of interest
transaction.
(d) In any proceeding seeking equitable relief or other remedies
against a director for the director allegedly improperly taking
advantage of a business opportunity, the fact that the director did
not employ the procedure described in subsection (a) before taking
advantage of the opportunity does not create an inference that the
opportunity should have been first presented to the corporation or
alter the burden of proof otherwise applicable to establish that the
director breached a duty to the corporation under the
circumstances.
that the plan may be amended before filing articles of entity
conversion, except that subsequent to approval of the plan by the
shareholders or interest holders the plan may not be amended to
change:
(1) the amount or kind of shares or other securities, interests,
obligations, rights to acquire shares, other securities or
interests, cash, or other property to be received under the
plan by the shareholders or interest holders; or
(2) the organic documents that will be in effect immediately
following the conversion, except for changes permitted by a
provision of the organic law of the surviving entity
comparable to IC 23-1-38-2.
selection constitutes the filling of a vacancy by the board to
which IC 23-1-33-9 applies.
Subject to subdivision (3), a nominee who is elected but
receives more votes against than for election shall not serve as
a director beyond the ninety (90) day period described in
clause (A).
(3) The board of directors may select a qualified individual to
fill the office held by a director who received more votes
against than for election.
(c) Subsection (b) does not apply to an election of directors by
a voting group if:
(1) at the expiration of the time fixed under a provision
requiring advance notification of director candidates; or
(2) absent a provision described in subdivision (1), at a time
fixed by the board of directors that is not more than fourteen
(14) days before notice is given of the meeting at which the
election is to occur;
there are more candidates for election by the voting group than the
number of directors to be elected, one (1) or more of whom are
properly proposed by shareholders. An individual is not considered
a candidate for purposes of this subsection if the board of directors
determines before the notice of meeting is given that the
individual's candidacy does not create a bona fide election contest.
(d) A bylaw under which a corporation elects to be governed by
this section may be repealed:
(1) if originally adopted by the shareholders, only by the
shareholders, unless the bylaw otherwise provides; or
(2) if adopted by the board of directors, by the board of
directors.
number of votes entitled to be cast by each voting group
entitled to vote separately on the plan merger or share
exchange as to each corporation; and
(B) either the total number of votes cast for and against the
plan merger or share exchange by each voting group entitled
to vote separately on the plan merger or share exchange or
the total number of undisputed votes cast for the plan merger
or share exchange separately by each voting group and a
statement that the number cast for the plan merger or share
exchange by each voting group was sufficient for approval by
that voting group.
(b) Unless a delayed effective date is specified, a merger or share
exchange takes effect when the articles of merger or share exchange are
filed.
(c) The surviving corporation resulting from a merger may, after the
merger has become effective, file for record with the county recorder
of each county in Indiana in which the corporation has real property at
the time of the merger, the title to which will be transferred by the
merger, a file-stamped copy of the articles of merger. If the plan
articles of merger sets forth amendments to the articles of
incorporation of the surviving corporation that change its corporate
name, a file-stamped copy of the articles of merger may be filed for
record with the county recorder of each county in Indiana in which the
surviving or acquiring corporation has any real property at the time
the merger becomes effective. A failure to record a copy of the articles
of merger under this subsection does not affect the validity of the
merger or the change in corporate name.
of directors authorizing the disposition. After adoption of the
resolution, the board of directors shall submit the proposed
disposition to the shareholders for the shareholder's approval. The
board of directors shall transmit to the shareholders a
recommendation that the shareholders approve the proposed
disposition, unless the board of directors makes a determination
that because of conflicts of interest or other special circumstances
the board of directors should not make the recommendation, in
which case the board of directors shall transmit to the shareholders
the basis for that determination.
(c) The board of directors may condition the board of director's
submission of a disposition to the shareholders under subsection
(b) on any basis.
(d) If:
(1) a disposition is required to be approved by the
shareholders under subsection (a); and
(2) the approval is to be given at a meeting;
the corporation shall notify each shareholder, whether the
shareholder is entitled to vote, of the meeting of shareholders at
which the disposition is to be submitted for approval in accordance
with IC 23-1-29-5. The notice must state that the purpose or that
one (1) of the purposes of the meeting is to consider the disposition
and shall contain a description of the disposition, including the
terms and conditions of the disposition and the consideration to be
received by the corporation.
(e) Unless the articles of incorporation or the board of directors
(acting under subsection (c)) require a greater vote or a vote by voting
groups, the transaction to be authorized must be approved by a majority
of all requires a greater vote, or a greater number of votes to be
present, the approval of a disposition by the shareholders requires
the approval of the shareholders at a meeting at which a quorum
consisting of at least a majority of the votes entitled to be cast on the
transaction. disposition exists.
(f) After a sale, lease, exchange, or other disposition of property is
authorized, the transaction may be abandoned (subject to any
contractual rights) without further shareholder action.
(f) After a disposition has been approved by the shareholders
under subsection (b), and at any time before the disposition has
been consummated, the disposition may be abandoned by the
corporation without action by the shareholders, subject to any
contractual rights
of other parties to the disposition.
(g) A transaction disposition that constitutes a distribution is
governed by IC 23-1-28 and not by this section.
(h) A disposition of assets in the course of dissolution under
IC 23-1-45, IC 23-1-46, IC 23-1-47, or 23-1-48 is not governed by
this section.
(i) The assets of a direct or indirect consolidated subsidiary shall
be considered the assets of the parent corporation for the purposes
of this section.
receive notice of and vote at the meeting of shareholders at which the
merger, plan of share exchange, or sale or exchange of property is to be
acted on, the shares of that class or series were
(1) registered on a United States securities exchange registered
under the Exchange Act (as defined in IC 23-1-43-9); or
(2) traded on the National Association of Securities Dealers, Inc.
Automated Quotations System Over-the-Counter Markets _
National Market Issues or a similar market.
a covered security under Section 18(b)(1)(A) or 18(b)(1)(B) of the
Securities Act of 1933, as amended.
(c) The articles of incorporation as originally filed or any
amendment to the articles of incorporation may limit or eliminate
the right to dissent and obtain payment for any class or series of
preferred shares. However, any limitation or elimination contained
in an amendment to the articles of incorporation that limits or
eliminates the right to dissent and obtain payment for any shares:
(1) that are outstanding immediately before the effective date
of the amendment; or
(2) that the corporation is or may be required to issue or sell
after the effective date of the amendment under any exchange
or other right existing immediately before the effective date
of the amendment;
does not apply to any corporate action that becomes effective
within one (1) year of the effective date of the amendment if the
action would otherwise afford the right to dissent and obtain
payment.
(c) (d) A shareholder:
(1) who is entitled to dissent and obtain payment for the
shareholder's shares under this chapter; or
(2) who would be so entitled to dissent and obtain payment but for
the provisions of subsection (b);
may not challenge the corporate action creating (or that, but for the
provisions of subsection (b), would have created) the shareholder's
entitlement.
(e) Subsection (d) does not apply to a corporate action that was
approved by less than unanimous consent of the voting
shareholders under IC 23-1-29-4.5(b) if both of the following
apply:
(1) The challenge to the corporate action is brought by a
shareholder who did not consent and as to whom notice of the
approval of the corporate action was not effective at least ten
(10) days before the corporate action was effected.
(2) The proceeding challenging the corporate action is
commenced not later than ten (10) days after notice of the
approval of the corporate action is effective as to the
shareholder bringing the proceeding.