How to Form an LLC in Indiana

What is an LLC?

A Limited Liability Company (“LLC”) is a business entity which combines the advantage of a corporation’s limited liability and the flexibility and single taxation of a general partnership.

“Limited liability” means that an LLC member is protected from personal liability for business debts and claims. If the business owes money or faces a lawsuit, the assets of the business will be at risk but not the personal assets of the LLC member.

Forming an LLC in Indiana can be done relatively quickly and with limited expense.  This post will detail the main steps you’ll need to take to form a limited liability company (LLC) in Indiana:

  • Select an available business name that complies with Indiana’s LLC rules (and federal and Indiana trademark law).
  • Create an LLC operating agreement, which sets out the rights and obligations of the LLC members.
  • File formal paperwork, usually called Articles of Organization, and pay the filing fee

Choose a Name for Your LLC

The name that you choose for an Indiana LLC must be distinguishable from any other registered or authorized Indiana business entity or any reserved names on record.

The name of the LLC must also contain one of the following words as a company identifier: “Limited Liability Company”, “LLC” or “L.L.C.” (You will subsequently file a simple “doing business as” form without the company identifier. For example, the formal name will be , but the d/b/a would be …)

Besides following Indiana’s LLC naming rules, you’ll want to conduct a trademark clearance search to make sure that your name won’t violate another entity’s trademark.  (At this stage, you should also register relevant domain names and consider a federal trademark application for your LLC’s name. For general information about federal trademarks, click here.)

File Articles of Organization

After settling on a name, you must prepare and file “Articles of Organization.” You may also see this document referred to as a “certificate of formation” or “certificate of organization.”

Filing Fees

One disadvantage of forming an LLC instead of a partnership or a sole proprietorship is that you’ll have to pay a filing fee when you submit your Articles of Organization. The current filing fee in Indiana is $85. If you would like to compare this to other states filing fees, click here.

Required Information

Articles of Organization are short, simple documents. You can find a template here. You must provide the LLC’s name, address, registered agent, dissolution and management information.

Members are not required to be listed in the Articles of Organization. However, be aware that Indiana has the following membership requirements for an LLC:

Indiana does not require a specific purpose to be listed in the Articles of Organization.

Registered Agent

You will be required to list the name and address of a person, usually your business attorney or one of the LLC members, who will act as your LLC’s “registered agent,” or “agent for service of process.” The agent is the person designated to receive legal papers in any future lawsuit involving your LLC.

You can now file all documents online at the Indiana Secretary of State’s website.

Create an LLC Operating Agreement

Even though operating agreements are not required to be filed with the Indiana Secretary of State and are not required by Indiana law, it is essential that you create one. In an LLC operating agreement, you set out rules for the ownership and operation of the business (much like a partnership agreement or corporate bylaws).

Optimally, the operating agreement will include:

  • each member’s percentage interest in the business
  • members’ rights and responsibilities
  • members’ voting power
  • how profits and losses will be allocated
  • how the LLC will be managed
  • rules for holding meetings and taking votes, and
  • “buy-sell” provisions, which determine what happens if a member wants to sell his or her interest, dies, or becomes disabled.

Once you’ve completed the above steps, take a moment to congratulate yourself. You have a new Indiana LLC. However, note that Indiana requires most businesses to obtain a business license and pay a fee if operating in the state, so check to make sure your business is complying with the license requirements for your particular industry.

Annual Filing Requirements:

Looking forward, be aware that a Business Entity Report must be received by the state of Indiana by the anniversary month, and it must be filed every two years. The year of filing depends on whether the LLC was filed during an even or odd numbered year. The fee for this filing is $30 every 2 years.

Taxes:

For more information on taxes, visit: State of Indiana Tax Information Website.

Before filing for an LLC, you may want to discuss with your business attorney whether an LLC is the appropriate entity type for your company. An attorney can also assist in drafting your LLC’s Operating Agreement.

Online Writing Resources for Authors

At the request of a client, I’m compiling a list of some helpful online writing resources. Here’s the start of the list:

  1. Writer’s Digest – the No. 1 magazine for writers, celebrating the writing life and what it means to be a writer in today’s publishing environment.
  2. American Society of Journalists and Authors – the nation’s leading organization of independent nonfiction writers.
  3. The Author’s Guild – the nation’s leading advocate for writers’ interests in effective copyright protection, fair contracts and free expression since it was founded as the Authors League of America in 1912.
  4. National Writers Union – the union for freelance writers working in US markets.
  5. Poets and Writers, Inc. – the primary source of information, support, and guidance for creative writers, and the publisher of Poets & Writers Magazine.

What are your favorite online writing resources that I should add to the list?

DJ Performance Agreements

A good DJ will impart a sense of feeling, rythym and happiness on a party.

In order to ensure that their own business also runs as smooth and happily as the dance floor, DJs providing services for venues should use a performance agreement in securing a set and, importantly, the payment. Here are some key questions to consider for your DJ performance agreement:

  1. Have you made sure the venue can understand the provisions of the contract?
  2. Have you communicated to the venue the minimum deposit needed to bind the terms of the agreement?
  3. Have you communicated to the venue that they are obligated to pay you if the set is cancelled on the performance date?
  4. Have you discussed the conditions that release both parties from the agreement?
  5. Have you communicated to the purchaser regarding terms of your deposit and the remaining balance?
  6. Have you discussed with the venue about advertising control of your show?

Go back and review your performance agreement with the above questions in mind. If you’re uncertain, contact an entertainment attorney for a professional review of your agreement.

Supreme Court confirms that works must be registered before commencing copyright lawsuit

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The much-anticipated ruling for Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, et al. has arrived. Yesterday, Justice Ruth Bader Ginsburg delivered the opinion for a unanimous Supreme Court, confirming that a work must be registered prior to commencing a copyright infringement lawsuit.

Held: Registration occurs, and a copyright claimant may commence an infringement suit, when the Copyright Office registers a copyright. Upon registration of the copyright, however, a copyright owner can recover for infringement that occurred both before and after registration.

This ruling confirms the literal reading of 17 U.S.C. §411(a), which states that “no civil action for infringement of the copyright in any United States work shall be instituted until … registration of the copyright claim has been made in accordance with this title.”

Fourth Estate, a news organization, had argued that, because “registration is not a condition of copyright protection” under 17 U.S.C. §408(a), then §411(a) should not bar a copyright claimant from enforcing that protection in court once they have applied for registration.

Now it is clear that registration must be obtained before commencing a lawsuit. This means that copyright owners must be even more diligent about filing applications for their significant works. The time spent waiting on an application to register would normally remove any option of quick, decisive action by a copyright owner against an infringer.

The best option for late applicants will be the Copyright Office’s Special Handling procedure, which allows for registration in less than a week for an additional $800 Special Handling fee.

Justice Ginsburg’s opinion acknowledged the current administrative delay of the Copyright Office, acknowledging that Congress is in the best position to protect copyright claimants, either by increasing funding to the Copyright Office or revising the language of §411(a).

True, registration processing times have increased from one to two weeks in 1956 to many months today. Delays, in large part, are the result of Copyright Office staffing and budgetary shortages that Congress can alleviate, but courts cannot cure. Unfortunate as the current administrative lag may be, that factor does not allow this court to revise §411(a)’s congressionally composed text.

This blog will begin to monitor the real-world impact of this decision and report back periodically.

Planning Your Digital Estate

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I’ve written previously on the importance of planning beyond one’s own death.  Simple planning now can prevent unnecessary headaches after you’ve passed. This is typically accomplished by preparing a will and/or obtaining life insurance.  But with the Internet and cloud computing increasingly dominating our daily lives, more adults are taking their lives online, often through social networking, online gaming, or blogging.  Consumers shop, pay bills, and bank online. Important accounts, documents, files and photos are now often managed exclusively online, almost always behind usernames and passwords.

Do you know what would happen to your blog if you die? What happens to the passwords and content of your multiple email accounts? Who, if anyone, would you want to control your Twitter, Facebook or World of Warcraft account?  Think about these questions now and speak to an attorney who can help you plan your digital estate.

Here are a few general guidelines:

Email Accounts
As a general rule, you own your email and electronic correspondence and you can leave this to whomever you choose in your will. However, if your family or executors don’t know your email passwords, they may have trouble retrieving it. Gmail will give access to email contents upon proof of death and proof of relationship.

Facebook and Social Networking Accounts
Facebook and other social networking accounts are slightly different than email accounts as the information on your profile isn’t as private as your emails – your profile is accessible and viewable by anyone whom you’ve granted access. Your profile also appears as a friend of countless others, and will continue to appear until the account is either closed or your friends delete you.

Facebook allows for the “memorialization” of accounts, where the accounts remain open as a tribute. There’s even a form you can use to report a user who has died. However, Facebook won’t release login information, so the account can’t be accessed, changed or updated.

Blogs and Online Content
An additional consideration for managing your digital estate arises for those of us who run blogs. Much like social networking and email accounts, online service providers such as WordPress are reluctant to release login details, even to an executor. If your blog is hosted on your own server or through a third-party hosting service, the task of accessing the site is further complicated and in some cases may be close to impossible.

If you’ve got a blog, you’ve also got intellectual property including copyright to your writings and any trademarks associated with your site. You may also have photographs, music, and other works that are published and maintained online. Copyright generally lasts for 70 years after the death of the author, so there’s a significant tail period of copyright protection that vests in your estate and, just like any other form of property, intellectual property can be bequeathed to a specific individual in your will. If the will does not specify who gets your intellectual property, the standard rules of distribution apply.

Online Worlds
Users spend a great deal time of time creating and managing identities in online worlds like World of Warcraft or Destiny.  But what will happen to these accounts upon your death?  World of Warcraft will transfer ownership of an account to an immediate family member upon proof of death, and the community has even been known to host virtual funerals.

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As with other estate planning stories, the moral is to plan ahead.  Here are your action items for planning the disposition of your digital information upon your death:

  1. Select a “digital” executor, someone who you trust to carry out your wishes with respect to your online information
  2. Tell your executor what you want done and give him or her the information needed to carry out your wishes.
  3. Prepare a list of your email and social networking accounts along with your login data and brief details on how to access the accounts.
  4. Update your will to include specific provisions for who will take ownership of your intellectual property and any data that you leave behind.