Do I Need to Register My Business in Indiana?

Law BooksIf you own a for profit corporation formed in a state other than Indiana and are conducting business in Indiana, you likely own a “foreign corporation” that must obtain authorization to conduct business in the state.  Indiana law clearly states that a “foreign corporation may not transact business in Indiana until the corporation obtains a certificate of authority from the secretary of state.”  Fortunately, that is an easy process and relatively inexpensive.

Some activities do not constitute “transacting business” in Indiana within the meaning of the Indiana statute.  Accordingly, no certificate of authority would be required for these activities of a foreign corporation-

  1. Maintaining, defending, or settling a proceeding (a lawsuit).
  2. Holding meetings of the board of directors or members or carrying on other activities concerning internal corporate affairs.
  3. Maintaining bank accounts.
  4. Maintaining offices or agencies for the transfer, exchange, and registration of memberships or securities or maintaining trustees or depositaries with respect to the securities.
  5. Selling through independent contractors.
  6. Soliciting or obtaining orders, by mail or through employees or agents, if the orders require acceptance outside of Indiana before the orders become contracts.
  7. Making loans or otherwise creating or acquiring indebtedness, mortgages, and security interests in real or personal property.
  8. Securing or collecting debts or enforcing mortgages and security interests in property securing the debts.
  9. Owning real or personal property.
  10. Conducting an isolated transaction that is completed within thirty (30) days and that is not in the course of repeated transactions of a similar nature.
  11. Transacting business in interstate commerce.
  12. Soliciting funds if otherwise authorized by Indiana law.

Generally, a foreign corporation that conducts business in Indiana without a certificate of authority may not maintain a proceeding in an Indiana court until the foreign corporation obtains a certificate of authority.  So, the foreign entity would have no recourse in Indiana, until it had registered with the Secretary of State.  Worse yet, a foreign corporation can be held liable for a civil penalty of not more than ten thousand dollars ($10,000) if the foreign corporation transacts business in Indiana without a certificate of authority. The Indiana Attorney General may collect these penalties.

The failure of a foreign corporation to obtain a certificate of authority does not invalidate contracts or other acts of the foreign corporation.  Nor does the lack of a certificate prevent a foreign corporation from defending itself in a proceeding in Indiana.  That could be a civil lawsuit or administrative action.

A foreign corporation may apply for a certificate of authority to transact business in Indiana by delivering an application to the secretary of state. The application must contain basic information about the corporation and can be completed online at the Indiana Secretary of State’s website.  An amended certificate of authority must be filed to reflect changes in the foreign corporation, such as changes in–

  • The corporate name.
  • The period of the foreign corporation’s duration.
  • The state or country of the foreign corporation’s incorporation.

A certificate of authority authorizes the foreign corporation to transact business in Indiana and is treated the same under the law as an entity formed in Indiana.  The State can revoke the certificate under certain conditions.

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