Indiana § 23-1-55-3 - Notification of registration to local officials

§ 23-1-55-3. Notification of registration to local officials

Sec. 3. (a) As used in this section, "local officials of the county" refer to all of the following:

(1) The county executive.

(2) If a person described in section 2 of this chapter intends to locate in a municipality, the executive of the municipality.

(3) A local entity that supervises a zoning board in the county.

(b) After receiving a registration described in section 2 of this chapter, the secretary of state shall notify the local officials of the county in which a person described in section 2 of this chapter intends to offer for sale or sell sexually explicit materials of the registration filed under section 2 of this chapter.

As added by P.L.92-2008, SEC.1.

IC 23-1.3ARTICLE 1.3. BENEFIT CORPORATIONS

Ch. 1.Application Ch. 2.Definitions Ch. 3.Benefit Corporation Status Ch. 4.Purpose of a Benefit Corporation Ch. 5.Standard of Conduct for Directors Ch. 6.Benefit Director Ch. 7.Standard of Conduct for Officers Ch. 8.Benefit Officer Ch. 9.Right of Action Ch. 10.Annual Benefit Report

IC 23-1.3-1Chapter 1. Application

23-1.3-1-1Application of article 23-1.3-1-2Applicability of other laws 23-1.3-1-3Effect of article 23-1.3-1-4Corporation law applicable 23-1.3-1-5Articles of incorporation and bylaws consistent with this article

IC 23-1.3-1-1Application of article Sec. 1. This article is applicable to all benefit corporations.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-1-2Applicability of other laws Sec. 2. This article does not of itself create an implication that a contrary or different rule of law is applicable to a corporation that is not a benefit corporation.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-1-3Effect of article Sec. 3. This article does not affect a statute or rule of law that is applicable to a corporation that is not a benefit corporation.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-1-4Corporation law applicable Sec. 4. Except as otherwise provided in this article, IC 23-1 is generally applicable to all benefit corporations.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-1-5Articles of incorporation and bylaws consistent with this article Sec. 5. The articles of incorporation or bylaws of a benefit corporation may not limit, be inconsistent with, or supersede this article.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-2Chapter 2. Definitions

23-1.3-2-1Application of corporation law definitions 23-1.3-2-2Application of definitions 23-1.3-2-3"Benefit corporation" 23-1.3-2-4"Benefit director" 23-1.3-2-5"Benefit enforcement proceeding" 23-1.3-2-6"Benefit officer" 23-1.3-2-7"General public benefit" 23-1.3-2-8"Independent" 23-1.3-2-9"Minimum status vote" 23-1.3-2-10"Specific public benefit" 23-1.3-2-11"Subsidiary" 23-1.3-2-12"Third party standard"

IC 23-1.3-2-1Application of corporation law definitions Sec. 1. The definitions in IC 23-1-20 apply throughout this article.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-2-2Application of definitions Sec. 2. The definitions in this chapter apply throughout this article.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-2-3"Benefit corporation" Sec. 3. "Benefit corporation" means a corporation to which both the following apply:

(1) The corporation has elected to become subject to this article.

(2) The status of the corporation as a benefit corporation has not been terminated.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-2-4"Benefit director" Sec. 4. "Benefit director" refers to an individual designated as the benefit director of a benefit corporation under IC 23-1.3-6.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-2-5"Benefit enforcement proceeding" Sec. 5. "Benefit enforcement proceeding" means any claim, action, or proceeding for:

(1) the failure of a benefit corporation to pursue or create:

(A) general public benefit; or

(B) a specific public benefit if the benefit corporation identified a specific public benefit purpose in its articles of incorporation; or

(2) a violation of any obligation, duty, or standard of conduct under this article.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-2-6"Benefit officer" Sec. 6. "Benefit officer" means an individual designated as the benefit officer of a benefit corporation under IC 23-1.3-8.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-2-7"General public benefit" Sec. 7. "General public benefit" means a material positive impact on society and the environment, taken as a whole, assessed against a third party standard, from the business and operations of a benefit corporation.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-2-8"Independent" Sec. 8. "Independent" means a person that has no material relationship with a benefit corporation or a subsidiary of the benefit corporation.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-2-9"Minimum status vote" Sec. 9. "Minimum status vote" means the following:

(1) For a corporation, in addition to any other required approval or vote, a vote in which:

(A) the shareholders of every class or series of shares are entitled to vote as a separate voting group on the corporate action regardless of a limitation stated in the articles of incorporation or bylaws on the voting rights of any class or series; and

(B) the corporate action is approved by vote of the shareholders of each class or series of shares entitled to cast at least ninety percent (90%) of the votes that all shareholders of the class or series are entitled to cast on the action.

(2) For a domestic business entity other than a corporation, in addition to any other required approval, vote, or consent, a vote in which:

(A) the holders of every class or series of equity interest in the entity that are entitled to receive a distribution of any kind from the entity are entitled to vote on or consent to the action regardless of any otherwise applicable limitation on the voting or consent rights of any class or series; and

(B) the action is approved by vote or consent of the holders described in clause (A) entitled to cast at least ninety percent (90%) of the votes or consents that all of the holders are entitled to cast on the action.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-2-10"Specific public benefit" Sec. 10. (a) "Specific public benefit" means a benefit that serves:

(1) one (1) or more public welfare, religious, charitable, scientific, literary, or educational purposes; or

(2) other purposes or benefits beyond the strict interests of the shareholders of the benefit corporation.

(b) The term includes the following:

(1) Providing low income or underserved individuals or communities with beneficial products or services.

(2) Promoting economic opportunity for individuals or communities beyond the creation of jobs in the normal course of business.

(3) Protecting or restoring the environment.

(4) Improving human health.

(5) Promoting the arts, sciences, or advancement of knowledge.

(6) Increasing the flow of capital to entities with a purpose to benefit society or the environment.

(7) Conferring any other particular benefit on society or the environment.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-2-11"Subsidiary" Sec. 11. "Subsidiary" means, in relation to a person, a business entity in which the person owns at least fifty percent (50%) of the outstanding equity interests, calculated as if all outstanding rights to acquire equity interests in the entity had been exercised.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-2-12"Third party standard" Sec. 12. "Third party standard" means a recognized standard for defining, reporting, and assessing corporate social and environmental performance that is:

(1) comprehensive because it assesses the effect of the benefit corporation and the benefit corporation's operations upon the interests listed in IC 23-1.3-5-1(1)(B) through IC 23-1.3-5-1(1)(E);

(2) developed by an entity that is not controlled by a benefit corporation;

(3) developed by an entity that:

(A) has access to necessary expertise to assess overall corporate social and environmental performance;

(B) uses a balanced multistakeholder approach to develop the standard, including a reasonable public comment period;

(C) was not materially financed by any of the following organizations and not more than one-third (1/3) of the members of the governing body of the entity are representatives of:

(i) associations or businesses operating in the same industry, the performance of whose members is measured by the standard; or

(ii) businesses from the same industry or an association of businesses in that industry; and

(4) transparent because all the following information is publicly available:

(A) The criteria considered when measuring the overall social and environmental performance of a business.

(B) The relative weightings, if any, of the criteria described in clause (A).

(C) The identity of the directors, officers, material owners, and governing body of the entity that developed and controls revisions to the standard.

(D) The process by which revisions to the standard and changes to the membership of the governing body are made.

(E) An accounting of the revenue and sources of financial support for the entity, with sufficient detail to disclose any relationships that could reasonably be considered to present a potential conflict of interest.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-3Chapter 3. Benefit Corporation Status

23-1.3-3-1Incorporation as benefit corporation 23-1.3-3-2Election of benefit corporation status by existing corporation; amending articles of incorporation; minimum status vote 23-1.3-3-3Plan of merger, consolidation, conversion, or share exchange; minimum status vote 23-1.3-3-4Terminating status; minimum status vote 23-1.3-3-5Plan of merger, consolidation, conversion, or share affecting status; minimum status vote 23-1.3-3-6Requirements for sale, lease, exchange, or other disposition of assets

IC 23-1.3-3-1Incorporation as benefit corporation Sec. 1. A benefit corporation shall be incorporated in accordance with IC 23-1-21, except that its articles of incorporation must state that it is a benefit corporation.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-3-2Election of benefit corporation status by existing corporation; amending articles of incorporation; minimum status vote Sec. 2. (a) Subject to subsection (b), an existing corporation may become a benefit corporation under this article by amending its articles of incorporation to contain, in addition to any content requirements for articles of incorporation under IC 23-1, the following:

(1) A statement that the corporation is a benefit corporation.

(2) A statement reading "By enacting this article, the State of Indiana does not endorse any particular benefit corporation, or approve or disapprove any of the purposes of a benefit corporation or any claimed general public benefit or specific public benefit, and no inference should be drawn from the acceptance of any filings with respect to a benefit corporation under IC 23-1.3, that the benefit corporation has or will in fact provide any general public benefit or specific public benefit.

(b) An amendment to the articles of incorporation under subsection (a) is not effective unless the amendment is adopted by at least a minimum status vote.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-3-3Plan of merger, consolidation, conversion, or share exchange; minimum status vote Sec. 3. (a) This section does not apply to a corporation that is a party to a merger if the shareholders of the corporation are not entitled to vote on the merger under IC 23-1-40.

(b) If:

(1) a domestic entity that is not a benefit corporation is a party to:

(A) a merger, consolidation, or conversion; or

(B) the exchanging entity in a share exchange; and

(2) the surviving entity in the merger, consolidation, conversion, or share exchange is to be a benefit corporation;

the plan of merger, consolidation, conversion, or share exchange must be adopted by the domestic entity by at least the minimum status vote.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-3-4Terminating status; minimum status vote Sec. 4. (a) Subject to subsection (b), a benefit corporation may terminate its status as a benefit corporation and cease to be subject to this article by amending its articles of incorporation to delete the statement in its articles of incorporation required under sections 1 and 2 of this chapter.

(b) An amendment to the articles of incorporation under subsection (a) is not effective unless the amendment is adopted by at least a minimum status vote.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-3-5Plan of merger, consolidation, conversion, or share affecting status; minimum status vote Sec. 5. (a) This section does not apply to a corporation that is a party to a merger if the shareholders of the corporation are not entitled to vote on the merger under IC 23-1-40.

(b) If a plan of merger, consolidation, conversion, or share exchange would have the effect of terminating the status of a corporation as a benefit corporation, the plan must be adopted by at least a minimum status vote in order to be effective.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-3-6Requirements for sale, lease, exchange, or other disposition of assets Sec. 6. Any sale, lease, exchange, or other disposition of all or substantially all of the assets of a benefit corporation is not effective unless one (1) or more of the following apply:

(1) The transaction is in the usual and regular course of business.

(2) The transaction is approved by at least a minimum status vote.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-4Chapter 4. Purpose of a Benefit Corporation

23-1.3-4-1General public benefit purpose 23-1.3-4-2Specific public benefit purpose 23-1.3-4-3Effect of public benefit purposes 23-1.3-4-4Amending articles of incorporation; specific public benefit 23-1.3-4-5Professional corporations

IC 23-1.3-4-1General public benefit purpose Sec. 1. A benefit corporation shall have a purpose of creating general public benefit. The purpose under this section is in addition to a benefit corporation's purpose under IC 23-1-21-2.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-4-2Specific public benefit purpose Sec. 2. (a) A benefit corporation may identify in its articles of incorporation one (1) or more specific public benefits that it is the purpose of the benefit corporation to create in addition to the benefit corporation's purposes under IC 23-1-21-2 and section 1 of this chapter.

(b) The identification of a specific public benefit under subsection (a) does not limit the purpose of a benefit corporation to create general public benefit under section 1 of this chapter.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-4-3Effect of public benefit purposes Sec. 3. The creation of general public benefit and a specific public benefit under sections 1 and 2 of this chapter is in the best interests of a benefit corporation.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-4-4Amending articles of incorporation; specific public benefit Sec. 4. (a) Subject to subsection (b), a benefit corporation may amend its articles of incorporation to add, amend, or delete the identification of a specific public benefit described in section 2 of this chapter.

(b) An amendment to the articles of incorporation under subsection (a) is not effective unless the amendment is adopted by a vote of the shareholders of each class or series of shares entitled to cast at least two-thirds (2/3) of the votes that all shareholders of the class or series are entitled to cast on the amendment.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-4-5Professional corporations Sec. 5. A professional corporation that is a benefit corporation does not violate IC 23-1.5-2-3 by having the purpose to create general public benefit or a specific public benefit.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-5Chapter 5. Standard of Conduct for Directors

23-1.3-5-1Consideration of interests 23-1.3-5-2Consideration of interests consistent with other laws 23-1.3-5-3Immune from personal liability 23-1.3-5-4No duty to beneficiary

IC 23-1.3-5-1Consideration of interests Sec. 1. The following apply to the board of directors, committees of the board of directors, and individual directors of a benefit corporation in discharging the duties of their respective positions and in considering the best interests of the benefit corporation:

(1) The board of directors, committees of the board of directors, and individual directors shall consider the effects of any action or inaction upon all the following:

(A) The shareholders of the benefit corporation.

(B) The employees and workforce of the:

(i) benefit corporation;

(ii) subsidiaries of the benefit corporation; and

(iii) suppliers of the benefit corporation.

(C) The interests of customers as beneficiaries of the general public benefit or specific public benefit purposes of the benefit corporation.

(D) Community and societal factors, including the factors of each community in which:

(i) offices or facilities;

(ii) subsidiaries; or

(iii) suppliers;

of the benefit corporation are located.

(E) The local and global environment.

(F) The short term and long term interests of the benefit corporation, including benefits that may accrue to the benefit corporation from its long term plans and the possibility that the interests may be best served by the continued independence of the benefit corporation.

(G) The ability of the benefit corporation to accomplish its general public benefit purpose and any specific public benefit purpose.

(2) The board of directors, committees of the board of directors, and individual directors may consider other pertinent factors or the interests of any other group that the board of directors, committees of the board of directors, or individual directors consider appropriate.

(3) The board of directors, committees of the board of directors, and individual directors are not required to give priority to a particular interest or factor listed in subdivision (1) or (2) over any other interest or factor unless the benefit corporation has stated in its articles of incorporation its intention to give priority to certain interests or factors related to its accomplishment of its general public benefit purpose or of a specific public benefit purpose identified in its articles of incorporation.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-5-2Consideration of interests consistent with other laws Sec. 2. The consideration of interests and factors provided in section 1 of this chapter:

(1) does not constitute a violation of IC 23-1-35; and

(2) is in addition to the ability of directors to consider interests and factors under IC 23-1-35-1.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-5-3Immune from personal liability Sec. 3. Except as otherwise provided in the bylaws of a benefit corporation, a director is not personally liable for monetary damages for:

(1) any action or inaction in the course of performing the duties of a director under section 1 of this chapter if the director performed the duties in compliance with IC 23-1-35 and this chapter; or

(2) the failure of the benefit corporation to pursue or create general public benefit or a specific public benefit.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-5-4No duty to beneficiary Sec. 4. A director does not have a duty to a person that is a beneficiary of the general public benefit purpose or a specific public benefit purpose of a benefit corporation arising from the status of the person as a beneficiary.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-6Chapter 6. Benefit Director

23-1.3-6-1Benefit director 23-1.3-6-2Elect; independent; presumed not independent; additional qualification requirements 23-1.3-6-3Report 23-1.3-6-4Status of actions 23-1.3-6-5Immune from personal liability 23-1.3-6-6Benefit directors of professional corporations 23-1.3-6-7Powers and duties exercised by persons other than directors

IC 23-1.3-6-1Benefit director Sec. 1. The board of directors of a benefit corporation must include a director who:

(1) is designated the benefit director; and

(2) has, in addition to the powers, duties, rights, and immunities of the other directors of the benefit corporation, the powers, duties, rights, and immunities provided in this chapter.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-6-2Elect; independent; presumed not independent; additional qualification requirements Sec. 2. (a) A benefit director shall be elected, and may be removed, in the manner provided under IC 23-1-33.

(b) Except as provided in section 6 or 7 of this chapter, a benefit director shall be an individual who is independent. An individual is conclusively presumed not independent under this subsection if any of the following apply:

(1) The individual:

(A) is; or

(B) has been within the past three (3) years;

an employee, other than a benefit officer, of the benefit corporation or a subsidiary of the benefit corporation.

(2) An immediate family member of the individual:

(A) is; or

(B) has been within the past three (3) years;

an executive officer, other than a benefit officer, of the benefit corporation or a subsidiary of the benefit corporation.

(3) There is ownership of at least five percent (5%) of the outstanding shares of the benefit corporation, calculated as if all outstanding rights to acquire equity interests in the benefit corporation had been exercised, by:

(A) the individual; or

(B) an entity:

(i) of which the individual is a director, an officer, or a manager; or

(ii) in which the individual owns at least five percent (5%) of the outstanding equity interests, calculated as if all outstanding rights to acquire equity interests in the business entity had been exercised.

(c) An individual serving as a benefit director or benefit officer does not in itself make the individual not independent.

(d) A benefit director may serve as the benefit officer at the same time as serving as the benefit director.

(e) A benefit corporation may prescribe in its articles of incorporation or bylaws additional qualification requirements for the benefit director if the additional qualification requirements are not inconsistent with this section.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-6-3Report Sec. 3. A benefit director shall prepare, and the benefit corporation shall include in the annual benefit report to shareholders required under IC 23-1.3-10, a report of the benefit director on all the following:

(1) Whether the benefit corporation acted in accordance with its general public benefit purpose and any specific public benefit purpose in all material respects during the period covered by the annual benefit report.

(2) Whether the:

(A) directors complied with IC 23-1.3-5-1; and

(B) officers complied with IC 23-1.3-7-1.

(3) If, in the opinion of the benefit director, the benefit corporation or its directors or officers failed to act or comply in the manner described in subdivision (1) or (2), a description of the ways in which the benefit corporation or its directors or officers failed to act or comply.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-6-4Status of actions Sec. 4. The act or inaction of an individual in the individual's capacity as a benefit director shall constitute for all purposes an act or inaction of that individual in the capacity of a director of the benefit corporation.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-6-5Immune from personal liability Sec. 5. Regardless of whether the articles of incorporation or bylaws of a benefit corporation include a provision eliminating or limiting the personal liability of directors authorized by IC 23-1-37, a benefit director is not personally liable for an act or omission in the capacity of a benefit director unless the act or omission constitutes self-dealing (other than a conflict of interest transaction described in IC 23-1-35-2(a)), willful misconduct, recklessness, or a knowing violation of law.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-6-6Benefit directors of professional corporations Sec. 6. The benefit director of a professional corporation is not required to be independent.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-6-7Powers and duties exercised by persons other than directors Sec. 7. (a) The articles of incorporation or bylaws of a benefit corporation must provide that the persons or shareholders who perform the duties of the board of directors include a person with the powers, duties, rights, and immunities of a benefit director if the articles of incorporation of the benefit corporation provide that the powers and duties conferred or imposed upon the board of directors shall be exercised or performed by a person other than the directors under IC 23-1-33-1(c).

(b) A person that exercises one (1) or more of the powers, duties, or rights of a benefit director under this section:

(1) does not need to be independent of the benefit corporation;

(2) has the immunities of a benefit director; and

(3) may share the powers, duties, and rights of a benefit director with one (1) or more persons.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-7Chapter 7. Standard of Conduct for Officers

23-1.3-7-1Consideration of interests and factors 23-1.3-7-2Consideration of interests and factors consistent with duties 23-1.3-7-3Immune from personal liability 23-1.3-7-4No duty to beneficiary

IC 23-1.3-7-1Consideration of interests and factors Sec. 1. Each officer of a benefit corporation shall consider the interests and factors of the persons listed in IC 23-1.3-5-1 in the manner provided under IC 23-1.3-5-1 if:

(1) the officer has discretion to act with respect to a matter; and

(2) it reasonably appears to the officer that the matter may have a material effect on the creation by the benefit corporation of general public benefit or a specific public benefit identified in the articles of incorporation of the benefit corporation.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-7-2Consideration of interests and factors consistent with duties Sec. 2. The consideration of interests and factors in the manner described in section 1 of this chapter does not constitute a violation of any duties of an officer.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-7-3Immune from personal liability Sec. 3. Except as provided in the bylaws of the benefit corporation, an officer is not personally liable for monetary damages for:

(1) an action or inaction as an officer in the course of performing the duties of an officer under section 1 of this chapter if the officer performed the duties of the position in compliance with IC 23-1 and this chapter; or

(2) failure of the benefit corporation to pursue or create general public benefit or a specific public benefit.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-7-4No duty to beneficiary Sec. 4. An officer does not have a duty to a person that is a beneficiary of the general public benefit purpose or a specific public benefit purpose of a benefit corporation arising from the status of the person as a beneficiary.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-8Chapter 8. Benefit Officer

23-1.3-8-1Benefit officer 23-1.3-8-2Powers and duties

IC 23-1.3-8-1Benefit officer Sec. 1. A benefit corporation may have an officer designated as the benefit officer.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-8-2Powers and duties Sec. 2. A benefit officer shall have:

(1) the powers and duties relating to the purpose of the benefit corporation to create general public benefit or a specific public benefit provided:

(A) by the bylaws; or

(B) absent controlling provisions in the bylaws, by resolutions or orders of the board of directors; and

(2) the duty to prepare the benefit report required under IC 23-1.3-10.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-9Chapter 9. Right of Action

23-1.3-9-1Limit on actions 23-1.3-9-2Immune from liability for failure to pursue or create general or specific public benefit 23-1.3-9-3Benefit enforcement proceeding

IC 23-1.3-9-1Limit on actions Sec. 1. A person may not, except in a benefit enforcement proceeding, bring an action or assert a claim against a benefit corporation or its directors or officers with respect to either of the following:

(1) The failure to pursue or create:

(A) general public benefit; or

(B) a specific public benefit identified in the benefit corporation's articles of incorporation.

(2) A violation of an obligation, duty, or standard of conduct under this article.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-9-2Immune from liability for failure to pursue or create general or specific public benefit Sec. 2. A benefit corporation is not liable for monetary damages under this article for any failure of the benefit corporation to pursue or create general public benefit or a specific public benefit.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-9-3Benefit enforcement proceeding Sec. 3. A benefit enforcement proceeding may be commenced or maintained only:

(1) directly by the benefit corporation; or

(2) derivatively in accordance with IC 23-1-32 by:

(A) a person or group of persons that owned at least two percent (2%) of the total number of shares of a class or series outstanding at the time of the act or omission complained of;

(B) a director;

(C) a person or group of persons that owned at least five percent (5%) of the outstanding equity interests in an entity of which the benefit corporation is a subsidiary at the time of the act or omission complained of; or

(D) other persons as specified in the benefit corporation's articles of incorporation or bylaws.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-10Chapter 10. Annual Benefit Report

23-1.3-10-1Content 23-1.3-10-2Written correspondence by benefit director 23-1.3-10-3Audit or certification not required 23-1.3-10-4Send to shareholders 23-1.3-10-5Post on website 23-1.3-10-6Delivery to secretary of state for filing

IC 23-1.3-10-1Content Sec. 1. A benefit corporation shall prepare an annual benefit report that includes all the following:

(1) A narrative description of:

(A) the ways in which the benefit corporation pursued general public benefit during the year and the extent to which general public benefit was created;

(B) both the:

(i) ways in which the benefit corporation pursued a specific public benefit that the articles of incorporation state is the purpose of the benefit corporation to create; and

(ii) extent to which that specific public benefit was created;

(C) any circumstances that have hindered the creation by the benefit corporation of general public benefit or a specific public benefit; and

(D) the process and rationale for selecting or changing the third party standard used to prepare the benefit report.

(2) An assessment of the overall social and environmental performance of the benefit corporation against a third party standard:

(A) applied consistently with any application of that standard in prior benefit reports; or

(B) accompanied by an explanation of the reasons for:

(i) any inconsistent application; or

(ii) the change to that standard from the standard used in the immediate prior report.

(3) The name of the benefit director and the benefit officer, if any, and the address to which correspondence to each of them may be directed.

(4) The compensation paid by the benefit corporation during the year to each director in the capacity of a director.

(5) The report of the benefit director described in IC 23-1.3-6-3.

(6) A statement regarding any connection between the organization that established the third party standard, or its directors, officers, or any holder of at least five percent (5%) of the governance interests in the organization, and the benefit corporation or its directors, officers, or any holder of at least five percent (5%) of the outstanding shares of the benefit corporation, including any financial or governance relationship that might materially affect the credibility of the use of the third party standard.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-10-2Written correspondence by benefit director Sec. 2. If, during the year covered by a benefit report:

(1) a benefit director:

(A) resigned from or refused to stand for reelection to the position of benefit director; or

(B) was removed from the position of benefit director; and

(2) the benefit director furnished the benefit corporation with any written correspondence concerning the circumstances surrounding the resignation, refusal, or removal;

the benefit report must include the correspondence described in subdivision (2) as an exhibit.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-10-3Audit or certification not required Sec. 3. The following are not required to be audited or certified by a third party:

(1) The benefit report.

(2) The assessment of the performance of the benefit corporation in the benefit report described in section 1(2) of this chapter.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-10-4Send to shareholders Sec. 4. A benefit corporation shall send its annual benefit report to each shareholder on the earlier of:

(1) one hundred twenty (120) days following the end of the fiscal year of the benefit corporation; or

(2) the same date that the benefit corporation delivers any other annual report to its shareholders.

As added by P.L.93-2015, SEC.3.

IC 23-1.3-10-5Post on website Sec. 5. If a benefit corporation has a website, a benefit corporation shall post all of its benefit reports on the public part of its website. However, the compensation paid to directors and financial or proprietary information included in the benefit reports may be omitted from the benefit reports posted on the website.

As added by P.L.93-2015, SEC.3. Amended by P.L.23-2026, SEC.237.

IC 23-1.3-10-6Delivery to secretary of state for filing Sec. 6. (a) The benefit corporation shall deliver, concurrently with the delivery of the benefit report to shareholders under section 4 of this chapter, a copy of the benefit report to the secretary of state for filing. However, the compensation paid to directors and financial or proprietary information included in the benefit report may be omitted from the benefit report as delivered to the secretary of state.

(b) The fee established in IC 23-0.5-9-6 applies to an annual benefit report delivered for filing under this section.

As added by P.L.93-2015, SEC.3. Amended by P.L.149-2016, SEC.69; P.L.118-2017, SEC.28.

IC 23-1.5ARTICLE 1.5. PROFESSIONAL CORPORATIONS

Ch. 1.Definitions Ch. 2.Administrative Provisions Ch. 3.Ownership Ch. 4.Change of Corporate Form Ch. 5.Foreign Professional Corporations

IC 23-1.5-1Chapter 1. Definitions

23-1.5-1-1Application of definitions 23-1.5-1-2"Accounting professional" 23-1.5-1-3"Architectural or engineering professional" 23-1.5-1-4"Attorney" 23-1.5-1-5"Bureau" 23-1.5-1-5.4"Charitable remainder annuity trust" 23-1.5-1-5.6"Charitable remainder unitrust" 23-1.5-1-6"Disqualified person" 23-1.5-1-7"Foreign professional corporation" 23-1.5-1-8"Health care professional" 23-1.5-1-9"Licensing authority" 23-1.5-1-10"Professional corporation" 23-1.5-1-11"Professional service" 23-1.5-1-12"Qualified person" 23-1.5-1-13"Qualified trust" 23-1.5-1-13.5"Real estate professional" 23-1.5-1-14"Veterinarian"

IC 23-1.5-1-1Application of definitions Sec. 1. The definitions in this chapter apply throughout this article.

As added by P.L.239-1983, SEC.1.

IC 23-1.5-1-2"Accounting professional" Sec. 2. "Accounting professional" means an individual who is licensed as:

(1) a certified public accountant under IC 25-2.1-3;

(2) a public accountant under IC 25-2.1-6; or

(3) an accounting practitioner under IC 25-2.1-6.

As added by P.L.239-1983, SEC.1. Amended by P.L.30-1993, SEC.2.

IC 23-1.5-1-3"Architectural or engineering professional" Sec. 3. "Architectural or engineering professional" means an individual who is registered as:

(1) an architect under IC 25-4-1;

(2) a landscape architect under IC 25-4-2;

(3) a professional engineer under IC 25-31-1; or

(4) a professional surveyor under IC 25-21.5.

As added by P.L.239-1983, SEC.1. Amended by P.L.23-1991, SEC.5; P.L.57-2013, SEC.22.

IC 23-1.5-1-4"Attorney" Sec. 4. "Attorney" means an individual in good standing admitted to the practice of law in Indiana.

As added by P.L.239-1983, SEC.1.

IC 23-1.5-1-5"Bureau" Sec. 5. "Bureau" means the following:

(1) In the case of:

(A) an accounting professional;

(B) an architectural professional;

(C) an engineering professional;

(D) a health care professional;

(E) a real estate professional; or

(F) a veterinarian;

the Indiana professional licensing agency established by IC 25-1-5-3.

(2) In the case of an attorney, the state board of law examiners.

As added by P.L.239-1983, SEC.1. Amended by P.L.132-1984, SEC.1; P.L.169-1985, SEC.19; P.L.229-1995, SEC.1; P.L.1-2006, SEC.406.

IC 23-1.5-1-5.4"Charitable remainder annuity trust" Sec. 5.4. "Charitable remainder annuity trust" has the meaning set forth in Section 664(d)(1) of the Internal Revenue Code.

As added by P.L.172-1996, SEC.1.

IC 23-1.5-1-5.6"Charitable remainder unitrust" Sec. 5.6. "Charitable remainder unitrust" has the meaning set forth in Section 664(d)(2) or 664(d)(3) of the Internal Revenue Code.

As added by P.L.172-1996, SEC.2.

IC 23-1.5-1-6"Disqualified person" Sec. 6. "Disqualified person" means an individual, corporation, limited liability company, partnership, fiduciary, trust, association, government agency, or other entity that for any reason is or becomes ineligible under this article to own shares issued by a professional corporation. The term includes a charitable remainder unitrust or charitable remainder annuity trust that is or becomes a disqualified person for failure to comply with section 13(3) of this chapter.

As added by P.L.239-1983, SEC.1. Amended by P.L.8-1993, SEC.307; P.L.172-1996, SEC.3.

IC 23-1.5-1-7"Foreign professional corporation" Sec. 7. "Foreign professional corporation" means a corporation for profit organized for the purpose of rendering professional services under the law of another state or country.

As added by P.L.239-1983, SEC.1.

IC 23-1.5-1-8"Health care professional" Sec. 8. "Health care professional" means an individual who is licensed, certified, or registered by a board (as defined in IC 25-1-9-1). However, the term does not include a veterinarian.

As added by P.L.239-1983, SEC.1. Amended by P.L.150-1986, SEC.1; P.L.149-1987, SEC.15; P.L.14-2002, SEC.1.

IC 23-1.5-1-9"Licensing authority" Sec. 9. "Licensing authority" means the following:

(1) In the case of an accounting professional, the Indiana state board of public accountancy.

(2) In the case of an architectural professional, the board of registration for architects and landscape architects.

(3) In the case of an engineering professional, the state board of registration for professional engineers.

(4) In the case of an attorney, the Indiana supreme court.

(5) In the case of a health care professional, the board (as defined in IC 25-1-9-1) that issues the individual's license, certification, or registration.

(6) In the case of a veterinarian, the Indiana board of veterinary medicine.

(7) In the case of a professional surveyor, the state board of registration for professional surveyors.

(8) In the case of a real estate professional, the Indiana real estate commission.

As added by P.L.239-1983, SEC.1. Amended by P.L.137-1985, SEC.4; P.L.169-1985, SEC.20; P.L.150-1986, SEC.2; P.L.149-1987, SEC.16; P.L.23-1991, SEC.6; P.L.33-1993, SEC.8; P.L.229-1995, SEC.2; P.L.24-1999, SEC.1; P.L.82-2000, SEC.1; P.L.14-2002, SEC.2; P.L.57-2013, SEC.23; P.L.48-2022, SEC.3.

IC 23-1.5-1-10"Professional corporation" Sec. 10. "Professional corporation" means:

(1) a corporation for profit organized under this article; or

(2) a foreign corporation admitted to do business under this article.

As added by P.L.239-1983, SEC.1.

IC 23-1.5-1-11"Professional service" Sec. 11. "Professional service" means any type of service that may be legally performed only by:

(1) an accounting professional;

(2) an architectural or engineering professional;

(3) an attorney;

(4) a health care professional;

(5) a veterinarian; or

(6) a real estate professional.

As added by P.L.239-1983, SEC.1. Amended by P.L.229-1995, SEC.3.

IC 23-1.5-1-12"Qualified person" Sec. 12. "Qualified person" means an individual, general partnership, professional corporation, or trustee of a qualified trust that is eligible under this article to own shares issued by a professional corporation.

As added by P.L.239-1983, SEC.1.

IC 23-1.5-1-13"Qualified trust" Sec. 13. "Qualified trust" means one (1) of the following:

(1) A trust of which the entire beneficial ownership is owned by a qualified person and the trustee is a qualified person.

(2) A voting trust established under IC 23-1-31, if the beneficial owner of any shares on deposit and the trustee of the voting trust are qualified persons.

(3) A charitable remainder unitrust or charitable remainder annuity trust that complies with each of the following conditions:

(A) Has one (1) or more current income recipients, all of whom are qualified persons.

(B) Has a trustee or an independent special trustee who:

(i) is a qualified person; and

(ii) has exclusive authority over the shares of the professional corporation while the shares are held in the trust.

(C) Has one (1) or more irrevocably designated charitable remaindermen, all of which must at all times:

(i) be domiciled; or

(ii) maintain a local chapter;

in Indiana.

(D) When distributing any assets during the term of the trust to charitable organizations, the distributions are made only to charitable organizations described in Section 170(c) of the Internal Revenue Code that:

(i) are domiciled; or

(ii) maintain a local chapter;

in Indiana.

As added by P.L.239-1983, SEC.1. Amended by P.L.149-1986, SEC.46; P.L.172-1996, SEC.4.

IC 23-1.5-1-13.5"Real estate professional" Sec. 13.5. "Real estate professional" means an individual who is licensed as a real estate broker licensed under IC 25-34.1-3-4.1.

As added by P.L.229-1995, SEC.4. Amended by P.L.127-2012, SEC.2.

IC 23-1.5-1-14"Veterinarian" Sec. 14. "Veterinarian" means an individual admitted to practice veterinary medicine under IC 25-38.1-3.

As added by P.L.239-1983, SEC.1. Amended by P.L.2-2008, SEC.47.

IC 23-1.5-2Chapter 2. Administrative Provisions

23-1.5-2-1Application of IC 23-1 23-1.5-2-2Performance of administrative functions by bureaus 23-1.5-2-3Formation of professional corporations; authorization of investments; admission of foreign professional corporations 23-1.5-2-4Qualifications of directors and officers 23-1.5-2-5Persons rendering professional services; licensing 23-1.5-2-6Liability of corporation, shareholders, and persons rendering professional services 23-1.5-2-7Relationship of patient or client to corporation or person performing professional services; privileged communications 23-1.5-2-8Repealed 23-1.5-2-9Repealed 23-1.5-2-9.1Certificate of incorporation; requirements; issuance 23-1.5-2-10Repealed 23-1.5-2-11Repealed 23-1.5-2-11.1Biennial report

IC 23-1.5-2-1Application of IC 23-1 Sec. 1. IC 23-1 applies to professional corporations formed under this article. However, in the event of a conflict between this article and IC 23-1, this article applies.

As added by P.L.239-1983, SEC.1.

IC 23-1.5-2-2Performance of administrative functions by bureaus Sec. 2. All administrative functions, duties, and responsibilities assigned by this article to any licensing authority shall be performed by the appropriate bureau.

As added by P.L.239-1983, SEC.1.

IC 23-1.5-2-3Formation of professional corporations; authorization of investments; admission of foreign professional corporations Sec. 3. (a) Except as provided in subsections (c) and (d) and IC 25-2.1-5, a professional corporation may be formed to render professional services as follows:

(1) One (1) or more accounting professionals may form a professional corporation to render services that may legally be performed only by an accounting professional.

(2) One (1) or more architectural or engineering professionals may form a professional corporation to render services that may legally be performed only by an architectural or engineering professional.

(3) One (1) or more attorneys may form a professional corporation to render services that may legally be performed only by an attorney.

(4) One (1) or more health care professionals may form a professional corporation to render services that may legally be performed only by a health care professional.

(5) One (1) or more veterinarians may form a professional corporation to render services that may legally be performed only by a veterinarian.

(6) One (1) or more real estate professionals may form a professional corporation to render services that may legally be performed only by a real estate professional.

(b) A foreign professional corporation may be admitted to render professional services in Indiana by complying with IC 23-1.5-5.

(c) A domestic professional corporation or a foreign professional corporation admitted to render professional services in Indiana:

(1) shall have at least one (1) shareholder who is licensed in Indiana; and

(2) may have at least one (1) shareholder who is licensed under the laws of another state to render similar professional services.

(d) In addition to the professional services permitted by its articles of incorporation, a professional corporation may invest its funds in any type of investment not prohibited by law.

As added by P.L.239-1983, SEC.1. Amended by P.L.229-1995, SEC.5; P.L.34-1997, SEC.3; P.L.128-2001, SEC.1.

IC 23-1.5-2-4Qualifications of directors and officers Sec. 4. The directors of a professional corporation and all the officers other than the secretary and the treasurer must be qualified persons with respect to the corporation.

As added by P.L.239-1983, SEC.1.

IC 23-1.5-2-5Persons rendering professional services; licensing Sec. 5. (a) A professional corporation may render professional services only through individuals permitted to render such services in Indiana. However, individuals who are not usually and ordinarily considered by custom and practice to be rendering professional services (such as clerks, bookkeepers, and technicians) are not required to be licensed to perform their services.

(b) A licensed individual acting in his individual capacity may render professional services, even though the individual may be a shareholder, director, officer, employee, or agent of a professional corporation.

As added by P.L.239-1983, SEC.1.

IC 23-1.5-2-6Liability of corporation, shareholders, and persons rendering professional services Sec. 6. (a) An individual who renders professional services as an employee of a professional corporation is liable for any negligent or wrongful act or omission in which he personally participates to the same extent as if he rendered such services as a sole practitioner.

(b) An individual who renders professional services as an employee of a professional corporation is liable for the conduct of other employees of the professional corporation under his direction or control to the same extent a sole practitioner would be so liable.

(c) A corporation whose employees perform professional services within the scope of their employment or of their apparent authority to act for the corporation is liable to the same extent as its employees.

(d) Except as otherwise provided by statute or by rule of the licensing authority, the personal liability of a shareholder of a professional corporation is no greater in any respect than that of a shareholder of a corporation organized under IC 23-1.

As added by P.L.239-1983, SEC.1.

IC 23-1.5-2-7Relationship of patient or client to corporation or person performing professional services; privileged communications Sec. 7. (a) The relationship between an individual performing professional services as an employee of a professional corporation and a client or patient is the same as if the individual performed such services as a sole practitioner.

(b) The relationship between a professional corporation performing professional services and the client or patient is the same as between the client or patient and the individual performing the services.

(c) A privilege applicable to communications between a person rendering professional services and the person receiving such services recognized under Indiana law remains inviolate and extends to a professional corporation and its employees in all cases in which it applies to communications between an individual rendering professional services on behalf of the corporation and the person receiving such services.

As added by P.L.239-1983, SEC.1.

IC 23-1.5-2-8RepealedAs added by P.L.239-1983, SEC.1. Repealed by P.L.118-2017, SEC.29.

IC 23-1.5-2-9RepealedAs added by P.L.239-1983, SEC.1. Repealed by P.L.78-2017, SEC.1.

IC 23-1.5-2-9.1Certificate of incorporation; requirements; issuance Sec. 9.1. The secretary of state may issue a certificate of incorporation under this article if the articles of incorporation:

(1) meet the requirements of all of the following:

(A) IC 23-1-21-2;

(B) IC 23-0.5-3, with respect to names; and

(C) this article; and

(2) include any other information required by the secretary of state to determine proper licensure or qualification of the proposed corporation or shareholders of the proposed corporation to incorporate under state law.

As added by P.L.52-2018, SEC.39.

IC 23-1.5-2-10RepealedAs added by P.L.239-1983, SEC.1. Amended by P.L.152-1988, SEC.4. Repealed by P.L.78-2017, SEC.2.

IC 23-1.5-2-11RepealedAs added by P.L.239-1983, SEC.1. Repealed by P.L.34-1997, SEC.26.

IC 23-1.5-2-11.1Biennial report Sec. 11.1. A professional corporation must file a biennial report under IC 23-0.5-2-13.

As added by P.L.34-1997, SEC.4. Amended by P.L.52-2018, SEC.40.

IC 23-1.5-3Chapter 3. Ownership

23-1.5-3-1Shares; issuance; transfer 23-1.5-3-2Authority to purchase shares from disqualified persons 23-1.5-3-3Transfer or purchase of shares from disqualified persons; procedure 23-1.5-3-4Proxies; voting trusts 23-1.5-3-5Powers of administrator, executor, guardian, and others of estate of shareholder who holds all outstanding shares 23-1.5-3-6Repealed 23-1.5-3-6.1Professional corporation; notice of changes

IC 23-1.5-3-1Shares; issuance; transfer Sec. 1. (a) Except as provided in IC 25-2.1-5, a professional corporation may issue shares, fractional shares, and rights or options to purchase shares only to:

(1) individuals who are authorized by Indiana law or the laws of another state to render a professional service permitted by the articles of incorporation of the corporation;

(2) general partnerships in which all the partners are authorized by Indiana law or the laws of another state to render a professional service permitted by the articles of incorporation of the corporation;

(3) professional corporations authorized by Indiana law or the laws of another state to render a professional service permitted by the articles of incorporation of the corporation; and

(4) the trustee of a qualified trust.

(b) When determined necessary by the licensing authority for any profession in order to prevent violations of the ethical standards of the profession, the licensing authority may by rule further restrict, condition, or abridge the authority of professional corporations to issue shares, but no such rule may, of itself, have the effect of causing a shareholder of a professional corporation at the time the rule becomes effective to become a disqualified person. All shares issued in violation of:

(1) this section; or

(2) any rule adopted by a licensing authority as provided by this section;

are void.

(c) Except as provided in IC 25-2.1-5, a shareholder of a professional corporation may transfer or pledge shares, fractional shares, and rights or options to purchase shares of the corporation only to individuals, general partnerships, professional corporations, and trustees of qualified trusts qualified under this article to own shares issued directly to them by the professional corporation. A transfer of shares in violation of this subsection is void; however, this subsection does not apply to the transactions described in section 3 of this chapter.

(d) Each certificate representing shares of a professional corporation must state conspicuously upon its face that the shares represented by that certificate are subject to:

(1) restrictions on transfer imposed by this article; and

(2) such restrictions on transfer as may be imposed by the licensing authority under this article.

(e) This section does not permit or authorize an individual to practice within Indiana any profession with respect to which a license or registration is required by the state without the individual being licensed or registered under the laws of the state.

As added by P.L.239-1983, SEC.1. Amended by P.L.34-1997, SEC.5; P.L.128-2001, SEC.2.

IC 23-1.5-3-2Authority to purchase shares from disqualified persons Sec. 2. A professional corporation may purchase its own shares from a disqualified person without regard to the availability of capital or earned surplus for the purchase; however, no purchase of or payment for its own shares may be made at a time when the corporation is insolvent or when the purchase or payment would make it insolvent.

As added by P.L.239-1983, SEC.1.

IC 23-1.5-3-3Transfer or purchase of shares from disqualified persons; procedure Sec. 3. (a) Whenever:

(1) a shareholder of a professional corporation dies;

(2) a shareholder of a professional corporation becomes a disqualified person;

(3) a charitable remainder unitrust or charitable remainder annuity trust that holds shares of a professional corporation becomes a disqualified person; or

(4) shares of a professional corporation are transferred by operation of law or court decree to a disqualified person;

the shares of the deceased shareholder or disqualified person may be transferred to a qualified person. If the shares are not so transferred, the shares shall be purchased or redeemed by the corporation to the extent of funds that may legally be made available for the purchase, as provided in section 2 of this chapter.

(b) Within five (5) months after such death or thirty (30) days after such a disqualification or transfer, if the price and method of payment for such shares is not fixed or ascertainable by the articles of incorporation or bylaws of the corporation or by private agreement, the corporation shall make a written offer to pay for the shares at a specified price determined by the corporation to be the fair value of the shares as of the date of the death, disqualification, or transfer. The offer:

(1) shall be given to the disqualified person, which, in the case of a deceased shareholder, is the executor, administrator, or heirs at law if there is no executor or administrator; and

(2) must be accompanied by:

(A) a balance sheet of the corporation, as of the latest available date and not more than twelve (12) months before the making of the offer; and

(B) an income statement of the corporation for the twelve (12) month period ending on the date of the balance sheet.

(c) If the fair value of the shares is agreed upon between the disqualified person and the corporation within thirty (30) days after the date of the written offer from the corporation, payment for the shares shall be made upon surrender of the certificate or certificates representing the shares:

(1) within sixty (60) days after the date of the offer; or

(2) at such other time as the parties may fix by agreement.

Upon payment of the agreed value, the disqualified person ceases to have any interest in the shares.

(d) If the disqualified person and the corporation do not agree on the fair value of the shares within thirty (30) days after the corporation's written offer, the following procedures apply:

(1) The disqualified person may make written demand within sixty (60) days after the date of the corporation's written offer that the corporation file a petition in the circuit or superior court in the county where the principal office of the corporation is located, requesting that the fair value of the shares be determined. The corporation shall file a petition under this subdivision within thirty (30) days after receipt of written demand from the disqualified person. If the corporation fails to institute the proceeding as required by this subdivision, the disqualified person may do so within sixty (60) days after delivery of the written demand to the corporation.

(2) If the corporation so elects at any time within sixty (60) days after the date of the corporation's written offer, it may file a petition for the determination of the fair value of the shares in the circuit or superior court in the county where the principal office of the corporation is located.

(3) The disqualified person shall be made a party to any proceeding under this subsection.

(4) All proceedings instituted under this subsection shall be governed by the Indiana rules of trial procedure.

(5) In a proceeding under this subsection, the court may appoint one (1) or more persons as appraisers to receive evidence and make a recommendation to the court on the question of the fair value of the shares. The appraisers have such authority as shall be specified in the appointment order of the court.

(e) In a proceeding under subsection (d), the disqualified person is entitled to judgment against the corporation for the amount of the fair value of his shares as of the date of death, disqualification, or transfer, upon surrender to the corporation of the certificate or certificates representing the shares. The court may order that the judgment be paid by the corporation in such installments as the court determines to be fair and just. The judgment may include an allowance for interest, not to exceed the legal rate of interest for judgments specified in IC 24-4.6-1-101, from the date of death, disqualification, or transfer.

(f) Except as provided in this subsection, the costs and expenses of any proceeding under subsection (d) shall be determined by the court and shall be assessed against the corporation. If the fair value of the shares as determined by the court does not exceed the amount specified in the last written offer made by the corporation, the court may assess all or any part of the costs and expenses of the proceeding against the disqualified person. For purposes of this subsection, expenses include:

(1) reasonable compensation for and reasonable expenses of the appraisers; and

(2) reasonable fees and expenses of counsel.

(g) If a purchase, redemption, or transfer of the shares of a deceased or disqualified shareholder or of a transferee who is a disqualified person is not completed within ten (10) months after the death of the deceased shareholder or within five (5) months after the disqualification or transfer, the corporation shall immediately cancel the shares on its books, and the disqualified person as of the date of cancellation has no further interest as a shareholder in the corporation other than his right to payment for such shares under this section. A corporation may not cancel its shares if a petition for a determination of fair value has been filed under this section in a circuit or superior court.

(h) Shares acquired by a corporation:

(1) in payment of the agreed value for the shares; or

(2) in payment of a judgment entered for the payment of those shares, as provided in this section;

may be held and disposed of by the corporation as in the case of other treasury shares.

(i) Any provision regarding purchase, redemption, or transfer of shares of a professional corporation contained in the articles of incorporation, bylaws, or any private agreement is specifically enforceable in the courts of this state.

(j) This section does not prevent or relieve a professional corporation from paying pension benefits or other deferred compensation for services rendered to or on behalf of a former shareholder as otherwise permitted by law.

As added by P.L.239-1983, SEC.1. Amended by P.L.172-1996, SEC.5.

IC 23-1.5-3-4Proxies; voting trusts Sec. 4. (a) A proxy for shares of a professional corporation is valid only if it is given to a qualified person of that corporation.

(b) A voting trust with respect to shares of a professional corporation is valid only if all the trustees and beneficiaries of the voting trust are qualified persons.

As added by P.L.239-1983, SEC.1.

IC 23-1.5-3-5Powers of administrator, executor, guardian, and others of estate of shareholder who holds all outstanding shares Sec. 5. This section applies to an administrator, executor, guardian, conservator, or receiver of the estate of a shareholder of a professional corporation who holds all of the outstanding shares of the corporation. Such a person may:

(1) exercise voting rights; and

(2) serve as a director and officer of the corporation;

for the purposes of amending the articles of incorporation as provided in IC 23-1.5-4-2 or dissolving the corporation.

As added by P.L.239-1983, SEC.1.

IC 23-1.5-3-6RepealedAs added by P.L.239-1983, SEC.1. Amended by P.L.34-1997, SEC.6. Repealed by P.L.78-2017, SEC.3.

IC 23-1.5-3-6.1Professional corporation; notice of changes Sec. 6.1. (a) A professional corporation shall notify the secretary of state of a change:

(1) in the ownership of any share in the professional corporation; or

(2) to the professional corporation's business address;

not more than thirty (30) days after the date on which the change occurs.

(b) The notice of change in ownership described in subsection (a) must include the name and post office address of the transferor shareholder and the transferee shareholder.

(c) The notice of change in business address described in subsection (a) must include the street address of the previous location and the street address of the new location of the professional corporation.

As added by P.L.52-2018, SEC.41.

IC 23-1.5-4Chapter 4. Change of Corporate Form

23-1.5-4-1Merger and consolidation 23-1.5-4-2Cessation of professional services 23-1.5-4-3Involuntary dissolution 23-1.5-4-4Right of corporation to accept this article 23-1.5-4-5Articles of acceptance; approval by board of directors and members; presentation to secretary of state 23-1.5-4-6Articles of acceptance; approval by secretary of state 23-1.5-4-7Certificate of acceptance; issuance

IC 23-1.5-4-1Merger and consolidation Sec. 1. (a) A professional corporation may merge or consolidate with another corporation, domestic or foreign, only if every shareholder of each corporation is qualified to be a shareholder of the surviving or new corporation.

(b) Upon the merger or consolidation of a professional corporation, if the surviving or new corporation is to render professional services in Indiana, it shall comply with this article.

As added by P.L.239-1983, SEC.1.

IC 23-1.5-4-2Cessation of professional services Sec. 2. (a) If a professional corporation ceases to render professional services, the corporation shall:

(1) amend its articles of incorporation to delete from its stated purposes the rendering of professional services; and

(2) conform to the requirements of IC 23-1 regarding its corporate name.

(b) The corporation may then continue in existence as a corporation under IC 23-1 and is no longer subject to this article.

As added by P.L.239-1983, SEC.1.

IC 23-1.5-4-3Involuntary dissolution Sec. 3. (a) A professional corporation formed under this article may be involuntarily dissolved as provided by IC 23-1-47.

(b) In addition to the causes specified in IC 23-1-47 for the involuntary dissolution of a corporation, a failure to comply with this article is a cause for the involuntary dissolution of a professional corporation under IC 23-0.5-6.

As added by P.L.239-1983, SEC.1. Amended by P.L.34-1987, SEC.278; P.L.118-2017, SEC.30.

IC 23-1.5-4-4Right of corporation to accept this article Sec. 4. (a) Any corporation organized under Indiana law for any purpose or purposes for which a corporation might be organized under this article, and existing on September 1, 1983, may accept this article, and avail itself of the rights and privileges provided by this article, by complying with this article. Without limitation, this right to accept this article extends to any corporation formed under this or any other general statute, for any purpose or purposes for which a corporation might be organized under this article, if the corporation existed on or after September 1, 1983, or if its articles of incorporation fix a time of corporate existence that has terminated or thereafter terminates, if this corporation files its articles of acceptance within two (2) years after such termination. The acceptance of this article may be effected by the officer, directors, and members of the corporation or by persons acting as such.

(b) Upon acceptance and compliance with the requirements of this article, the corporation shall be considered to have existed since termination and its acts, during this time, have the same validity as if performed before termination.

(c) This section does not apply to any corporation whose corporate franchise has been forfeited under any other statute.

As added by P.L.239-1983, SEC.1.

IC 23-1.5-4-5Articles of acceptance; approval by board of directors and members; presentation to secretary of state Sec. 5. (a) The board of directors or trustees of a corporation desiring to accept this article shall, by a resolution adopted by a majority vote of the board, approve articles of acceptance setting forth the following information:

(1) The name of the corporation.

(2) The location of its principal office and the name and address of its resident agent.

(3) The date of its incorporation.

(4) A designation of the law under which it was organized.

(5) A declaration that it accepts all of the terms and provisions of this article.

(6) A restatement of those provisions of its articles of incorporation or association that it desires to have continued in effect, as long as the provisions restated would have been authorized by this article as provisions of original articles of incorporation for a corporation organized under this article. Failure to restate such provisions in the articles of acceptance constitutes nonconformance to law, and the secretary of state shall refuse to file these articles of acceptance. Any provision not stated in its articles of acceptance is not effective after the articles are filed; however, this subdivision does not prevent any corporation from adopting and filing amended articles of acceptance that make the articles conform to this subdivision. Amended articles of acceptance shall be filed and recorded in the same manner as required for original articles of acceptance.

(b) The resolution of the board of directors approving the articles of acceptance must direct that the articles be submitted to a vote of those members of the corporation who are entitled to vote in respect to the articles, at a designated meeting, which may be an annual meeting of members or a special meeting of those members who are entitled to vote. If the designated meeting is an annual meeting, notice of the submission of the articles of acceptance shall be included in the notice of the annual meeting. If it is a special meeting, it shall be called by the resolution designating the meeting and notice shall be given at the time and in the manner provided in IC 23-17-10.

(c) The articles of acceptance approved by the board of directors shall be submitted to a vote of the members as provided in subsection (b). To be adopted, they must receive the affirmative votes of two-thirds (2/3) of the members entitled to vote.

(d) Upon approval and adoption, the articles of acceptance:

(1) shall be signed in duplicate, in the form prescribed by the secretary of state, by any current officer of the corporation and verified and affirmed subject to penalties for perjury; and

(2) shall be presented in duplicate to the secretary of state at his office, accompanied by those fees prescribed by law.

As added by P.L.239-1983, SEC.1. Amended by P.L.179-1991, SEC.27.

IC 23-1.5-4-6Articles of acceptance; approval by secretary of state Sec. 6. Upon the presentation of the articles of acceptance, the secretary of state, if he finds they conform to the requirements of section 5 of this chapter, shall endorse his approval upon both of the copies of the articles, and, when all fees have been paid as required by law, shall:

(1) file one (1) copy of the articles in his office;

(2) issue a certificate of acceptance; and

(3) return to the corporation the remaining copy of the articles of acceptance, bearing the endorsement of his approval, together with the certificate of acceptance.

As added by P.L.239-1983, SEC.1.

IC 23-1.5-4-7Certificate of acceptance; issuance Sec. 7. The acceptance becomes effective upon issuance of a certificate of acceptance by the secretary of state. The corporation is entitled to all rights and privileges and is subject to all penalties, liabilities, and restrictions provided by this article granted to or imposed upon corporations organized under this article. The articles of incorporation shall be considered to be amended to the extent, if any, that any provision or provisions of the articles are restated in the articles of acceptance.

As added by P.L.239-1983, SEC.1.

IC 23-1.5-5Chapter 5. Foreign Professional Corporations

23-1.5-5-1Foreign professional corporation; compliance with state law 23-1.5-5-2Revocation of certificate of admission

IC 23-1.5-5-1Foreign professional corporation; compliance with state law Sec. 1. (a) A foreign professional corporation desiring to be admitted to render professional services in Indiana must:

(1) comply with IC 23-0.5-5;

(2) comply with this article;

(3) comply with the name requirements of IC 23-0.5-3; and

(4) provide any information required by the secretary of state to determine proper licensure or qualification of the foreign corporation or shareholders of the foreign corporation to transact business in Indiana.

(b) IC 23-0.5-5-7 applies to the foreign professional corporation.

As added by P.L.239-1983, SEC.1. Amended by P.L.11-1987, SEC.26; P.L.118-2017, SEC.31; P.L.52-2018, SEC.42.

IC 23-1.5-5-2Revocation of certificate of admission Sec. 2. The certificate of admission of any foreign corporation admitted to render professional services in Indiana may be revoked at any time by the secretary of state:

(1) as provided by IC 23-0.5-5-11; or

(2) for failure to comply with this article.

As added by P.L.239-1983, SEC.1. Amended by P.L.34-1987, SEC.279; P.L.118-2017, SEC.32.

IC 23-2ARTICLE 2. SECURITIES AND FRANCHISES

Ch. 1.Repealed Ch. 2.Repealed Ch. 2.5.Franchises Ch. 2.7.Deceptive Franchise Practices Ch. 3.Repealed Ch. 3.1.Takeover Offers Ch. 4.Supervision of Continuing Care Contracts Ch. 5.Repealed Ch. 6.Indiana Commodity Code

IC 23-2-1Chapter 1. RepealedRepealed by P.L.27-2007, SEC.37.

IC 23-2-2Chapter 2. RepealedRepealed by Acts 1975, P.L.261, SEC.17.

IC 23-2-2.5Chapter 2.5. Franchises

23-2-2.5-0.5Consideration of franchisor as employer or co-employer 23-2-2.5-1Definitions 23-2-2.5-2Application of chapter 23-2-2.5-3Exempt franchisors; number of Indiana franchises; net worth; business experience; disclosures to franchisees 23-2-2.5-4Exempt franchisees 23-2-2.5-5Sales exempted by commissioner 23-2-2.5-6Denial or revocation of exemptions; grounds 23-2-2.5-7Notice of denial or revocation of exemptions; hearing 23-2-2.5-8Determination of exemption; request; fee; notice; hearing; order 23-2-2.5-9Offer or sale of franchise; requisites; disclosure statement 23-2-2.5-10Repealed 23-2-2.5-10.5Registration of franchise; notification form 23-2-2.5-11Signatures and verifications 23-2-2.5-12Escrow or impoundment of franchise fees; inadequate funding 23-2-2.5-13Disclosure statements 23-2-2.5-13.1Material change in information; amended disclosure statement required 23-2-2.5-14Stop orders; descriptions of charges 23-2-2.5-15Notice of stop order 23-2-2.5-16Stop orders; vacating or modifying 23-2-2.5-17Effectiveness of registration 23-2-2.5-18Renewal of registration; period 23-2-2.5-19Renewal forms 23-2-2.5-20Repealed 23-2-2.5-21Records of sales 23-2-2.5-22Experts 23-2-2.5-23Registration or filing not considered finding upon merits 23-2-2.5-24Consent to service of process on secretary of state 23-2-2.5-25Repealed 23-2-2.5-26Advertisements containing false statements; notification; hearing 23-2-2.5-27Fraud or deceit unlawful 23-2-2.5-28Violations; judgment; damages; interest; attorney's fees 23-2-2.5-29Aiders and abettors in violations; joint and several liability 23-2-2.5-30Limitation of actions 23-2-2.5-31Survival of actions 23-2-2.5-32Remedies 23-2-2.5-33Investigations; proceedings; powers; self-incrimination 23-2-2.5-34Violations; orders and notices; hearing; costs; civil penalties; enforcement action 23-2-2.5-35Offer of franchise exempt from registration without compliance with IC 23-2-2.5-3 and IC 23-2-2.5-27; cease and desist order; hearing 23-2-2.5-36Prosecution of violations 23-2-2.5-37Violations; felony 23-2-2.5-38Conduct equivalent to appointment of secretary of state for service of process 23-2-2.5-39Exemption or classification; burden of proof 23-2-2.5-40Certificate of commissioner as evidence 23-2-2.5-41Statements and documents filed with secretary of state as evidence 23-2-2.5-42Administration of chapter 23-2-2.5-43Fees and funds; accounting; fees for registration and renewal 23-2-2.5-44Appeal 23-2-2.5-45Assistance of attorney general; expenses 23-2-2.5-46Liability for performance of official duties 23-2-2.5-47Construction and purpose of chapter 23-2-2.5-48Public records; inspection; disclosure or use of information restricted; copies; destruction 23-2-2.5-49Construction with other laws 23-2-2.5-50Administrative orders and procedures 23-2-2.5-51Service stations; succession to ownership by family member of deceased franchisee

IC 23-2-2.5-0.5Consideration of franchisor as employer or co-employer Sec. 0.5. (a) As used in this section, "franchisor" has the meaning set forth in 16 CFR 436.1(k).

(b) As used in this section, "franchisee" has the meaning set forth in 16 CFR 436.1(i).

(c) For purposes of this chapter, a franchisor is not considered to be an employer or co-employer of:

(1) a franchisee; or

(2) an employee of a franchisee;

unless the franchisor agrees, in writing, to assume the role of an employer or co-employer of the franchisee or the employee of a franchisee.

As added by P.L.161-2016, SEC.1.

IC 23-2-2.5-1Definitions Sec. 1. As used in this chapter:

(a) "Franchise" means a contract by which:

(1) a franchisee is granted the right to engage in the business of dispensing goods or services, under a marketing plan or system prescribed in substantial part by a franchisor;

(2) the operation of the franchisee's business pursuant to such a plan is substantially associated with the franchisor's trademark, service mark, trade name, logotype, advertising, or other commercial symbol designating the franchisor or its affiliate; and

(3) the person granted the right to engage in this business is required to pay a franchise fee.

"Franchise" includes a contract whereby the franchisee is granted the right to sell franchises on behalf of the franchisor. The term as defined in subdivisions (1), (2), and (3) does not include a contract where the franchisee, or any of its officers or directors at the time the contract is signed, has been in the type of business represented by the franchise or a similar business for at least two (2) years, and the parties to the contract anticipated, or should have anticipated, at the time the contract was entered into that the franchisee's gross sales derived from the franchised business during the first year of operations would not exceed twenty percent (20%) of the gross sales of all the franchisee's business operations.

(b) "Franchisee" means a person to whom a franchise is granted.

(c) "Franchisor" means a person who grants a franchise.

(d) "Sale" or "sell" includes every contract or agreement of sale of, contract to sell, or disposition of, a franchise or interest in a franchise for value.

(e) "State" includes a territory or possession of the United States, the District of Columbia, and Puerto Rico.

(f) "Fraud" and "deceit" includes any misrepresentation in any manner of a material fact, any promise or representation or prediction as to the future not made honestly or in good faith, or the failure or omission to state a material fact necessary to make the statements made, in the light of the circumstances under which they were made, not misleading.

(g) "Offer" or "offer to sell" does not include the renewal or extension of an existing franchise where there is no interruption in the operation of the franchised business by the franchisee.

(h) "Publish" means to issue or circulate by newspaper, mail, radio, or television, or otherwise disseminate to the public.

(i) "Franchise fee" means any fee that a franchisee is required to pay directly or indirectly for the right to conduct a business to sell, resell, or distribute goods, services, or franchises under a contract agreement, including, but not limited to, any such payment for goods or services. "Franchise fee" does not include:

(1) the payment of a reasonable service charge to the issuer of a credit card by an establishment accepting or honoring the credit card;

(2) amounts paid to a trading stamp company by a person issuing trading stamps in connection with the retail sale of goods or services; or

(3) the purchase or agreement to purchase goods at a bona fide wholesale price.

(j) "Disclosure statement" means the document provided for in section 13 of this chapter and all amendments to such document.

(k) "Write" or "written" includes printed, lithographed, or produced by any other means of graphic communication.

(l) "Advertisement" means any published communication which offers any franchise for sale.

(m) "Affiliate" means any person who, directly or indirectly through one (1) or more intermediaries, controls, is controlled by, or is under common control with, the person to whom affiliation is attributed.

(n) "Commissioner" means the Indiana securities commissioner under IC 23-19-6-1(a).

(o) "Service station franchisee" means a person who is granted by an oil company, refiner, jobber, or other franchisor a supply franchise agreement or a lease franchise agreement, or both, to sell gasoline at retail by a metered pump in Indiana.

(p) "Designated family member" means any person named in a franchise agreement by a service station franchisee as the person entitled to fulfill the terms of the agreement on behalf of the franchisee if the franchisee dies before the term of the franchise has ended. Only the following are eligible to be named as designated family members:

(1) The spouse of the franchisee.

(2) A natural or adopted child of the franchisee.

(3) A stepchild of the franchisee.

(4) The guardian of the franchisee's child or stepchild.

Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.241-1983, SEC.1; P.L.206-1993, SEC.1; P.L.27-2007, SEC.10.

IC 23-2-2.5-2Application of chapter Sec. 2. This chapter applies to an offer or franchise if:

(a) the offeree or franchisee is an Indiana resident; or

(b) the franchised business contemplated by the offer or franchise will be or is operated in Indiana.

An offer to sell is not made in this state because the franchisor circulates or there is circulated on his behalf in Indiana an advertisement in: (1) a bona fide newspaper or other publication of general, regular and paid circulation which has had more than two-thirds (2/3) of its circulation outside this state during the past twelve (12) months; or (2) a radio or television program originating outside this state which is received in Indiana.

Formerly: Acts 1975, P.L.262, SEC.1.

IC 23-2-2.5-3Exempt franchisors; number of Indiana franchises; net worth; business experience; disclosures to franchisees Sec. 3. Sections 9 through 24 of this chapter do not apply to the offer or sale of a franchise if the franchisor either sells no more than one (1) franchise in Indiana in any twenty-four (24) month period or the franchisor:

(1) has a net worth:

(A) on a consolidated basis according to current financial statements certified by independent certified public accountants, of not less than five million dollars ($5,000,000); or

(B) according to current financial statements certified by independent certified public accountants of not less than one million dollars ($1,000,000) and is at least eighty percent (80%) owned by a corporation which has a net worth on a consolidated basis, according to current financial statements certified by independent certified public accountants, of not less than five million dollars ($5,000,000);

(2) has:

(A) had at least twenty-five (25) franchisees conducting business at all times during the five (5) year period immediately preceding the offer or sale; or

(B) conducted the business which is the subject of the franchise continuously for not less than five (5) years preceding the offer or sale;

or if any corporation which owns at least eighty percent (80%) of the franchisor has had at least twenty-five (25) franchisees conducting business at all times during the five (5) year period immediately preceding the offer or sale, or such corporation has conducted the business which is the subject of the franchise continuously for not less than five (5) years preceding the offer or sale; and

(3) discloses in writing to each prospective franchisee, at least ten (10) days prior to the execution by the prospective franchisee of a binding franchise or other agreement, or at least ten (10) days prior to the receipt of any consideration, whichever first occurs, the following information:

(A) The name of the franchisor, the name under which the franchisor is doing or intends to do business, and the name of any affiliate that will engage in business transactions with franchisees.

(B) The franchisor's principal business address and the name and address of its agent in Indiana authorized to receive service of process.

(C) The business form of the franchisor and the jurisdiction under which it was organized.

(D) The business experience of the franchisor, including the length of time the franchisor:

(i) has conducted a business of the type to be operated by the franchisee;

(ii) has granted franchises for that business; and

(iii) has granted franchises in other lines of business.

(E) A copy of the franchise contract proposed for use or in use in Indiana.

(F) A statement of the franchise fee charged, the proposed application of the proceeds of such fee by the franchisor, and the formula by which the amount of the fee is determined if the fee is not the same in all cases.

(G) A statement describing any payments other than franchise fees that the franchisee is required to pay to the franchisor or affiliated persons, including royalties or payments which the franchisor or affiliated persons collect in whole or in part on behalf of a third party or parties.

(H) A statement of the conditions under which the franchise may be terminated, renewal refused, or repurchased.

(I) A statement as to whether the franchisee is required to purchase from the franchisor or affiliates or their designee services, supplies, products, fixtures, or other goods relating to the establishment or operation of the franchised business, together with a description thereof.

(J) A statement as to whether the franchisee is limited in the goods or services offered by the franchisee to the franchisee's customers.

(K) A statement of the terms and conditions of any financing agreements.

(L) A statement of any past or present practice or of any intent of the franchisor to transfer to a third party any note, contract, or other obligation of the franchisee in whole or in part.

(M) If any financial statement concerning estimated profits or earnings is used, the data upon which the estimate is based.

(N) A statement as to whether the franchisee will receive an exclusive area or territory.

Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.233-1985, SEC.1; P.L.152-2020, SEC.1.

IC 23-2-2.5-4Exempt franchisees Sec. 4. The offer of sale of a franchise by a franchisee who is not an affiliate of the franchisor for his own account is exempt from section 9 if the offer or sale is not effected by or through a franchisor. A sale is not effected by or through a franchisor if a franchisor is entitled to approve or disapprove a different franchisee.

Formerly: Acts 1975, P.L.262, SEC.1.

IC 23-2-2.5-5Sales exempted by commissioner Sec. 5. Section 9 does not apply to an offer or sale which the commissioner, by rule or order, exempts as not being comprehended within the purposes of this law and the registration of which he finds is not necessary or appropriate in the public interest or for the protection of investors.

Formerly: Acts 1975, P.L.262, SEC.1.

IC 23-2-2.5-6Denial or revocation of exemptions; grounds Sec. 6. The commissioner may, without a hearing, issue a stop order denying or revoking any exemption specified in sections 3, 4, or 5 with respect to an offer or sale if he finds that it is in the public interest and either:

(a) that there has been a failure to comply with any of the provisions of this chapter; or

(b) that the offer or sale would constitute misrepresentation to, or deceit or fraud on, the purchaser or offeree.

Formerly: Acts 1975, P.L.262, SEC.1.

IC 23-2-2.5-7Notice of denial or revocation of exemptions; hearing Sec. 7. (a) Upon the entry of a stop order under section 6 of this chapter, the commissioner shall notify the franchisor:

(1) of the entry of the stop order;

(2) of the reasons for the stop order; and

(3) that, upon receipt of a written request, the matter will be set down for hearing to commence within fifteen (15) days after receipt of such request, unless the franchisor consents to a later date.

(b) If no hearing is requested or none is ordered by the commissioner, the stop order is effective until it is modified or vacated by the commissioner.

(c) If a hearing is requested or ordered, the commissioner, after notice and hearing, may modify or vacate the stop order.

Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.168-2001, SEC.1.

IC 23-2-2.5-8Determination of exemption; request; fee; notice; hearing; order Sec. 8. (a) The commissioner may determine whether any proposed offer or sale is entitled to an exemption. However, the commissioner may decline to exercise that authority as to any such offer or sale. Any interested party desiring the commissioner to exercise the authority to determine whether a proposed offer or sale is entitled to an exemption shall submit to the commissioner the following:

(1) A verified statement of all material facts relating to the proposed offer or sale.

(2) Documentation demonstrating that the requirements for exemption under sections 3, 4, and 5 of this chapter, and any rules adopted under those sections, are met.

(3) A written request for a ruling as to the particular exemption claimed.

(4) A filing fee of fifty dollars ($50.00).

(b) After such notice to interested parties as the commissioner deems proper and after a hearing, if any, the commissioner may enter an order finding the proposed offer or sale entitled or not entitled to the exemption claimed. Any order so entered, unless an appeal be taken therefrom in the manner prescribed in this chapter is binding upon the commissioner and upon all interested parties if the proposed offer or sale of a franchise when consummated or issued conforms in every relevant and material particular with the facts set forth in the verified statement submitted.

Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.205-2021, SEC.1.

IC 23-2-2.5-9Offer or sale of franchise; requisites; disclosure statement Sec. 9. No person may offer or sell any franchise:

(1) unless the franchise is registered under this chapter or is exempt from such registration under sections 3 through 5 of this chapter; and

(2) without first providing to the prospective franchisee at least ten (10) days prior to the execution by the prospective franchisee of a binding franchise or at least ten (10) days prior to the receipt by the franchisor of any consideration, whichever first occurs, a disclosure statement together with a copy of all proposed contracts relating to the sale of a franchise.

Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.233-1985, SEC.2.

IC 23-2-2.5-10RepealedFormerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.8-1993, SEC.310. Repealed by P.L.168-2001, SEC.16.

IC 23-2-2.5-10.5Registration of franchise; notification form Sec. 10.5. (a) A person who wants to offer for sale a franchise in Indiana and who is not exempt under sections 3 through 5 of this chapter shall register the franchise by notification to the commissioner on a notification form prescribed by the commissioner. The notification shall include the following:

(1) The name of the franchisor.

(2) The name or names under which the franchisor intends to do business.

(3) The franchisor's principal business address.

(b) The following items shall be filed with the notification:

(1) One (1) copy of the disclosure statement required under section 13 of this chapter.

(2) The consent to service of process required under section 24 of this chapter, unless consent has previously been filed by the person.

(3) The registration fee required under section 43 of this chapter.

(c) A franchisor may register only one (1) franchise for each notification.

(d) The registration of a franchise under this section is effective upon the commissioner's receipt of the notification. The notification is effective for one (1) year from the date of the commissioner's receipt of the notification.

(e) Except as provided in section 13.1 of this chapter, during the one (1) year registration period, a person is not required to file with the commissioner any supplemental information, including any amendments to the disclosure statement, unless the commissioner, acting under the commissioner's authority to suspend or revoke a registration under section 14 of this chapter, requests the information.

As added by P.L.168-2001, SEC.2. Amended by P.L.152-2020, SEC.2.

IC 23-2-2.5-11Signatures and verifications Sec. 11. Registration notification forms, registration renewal forms, and amendments thereto, shall be signed and verified by the franchisor.

Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.168-2001, SEC.3.

IC 23-2-2.5-12Escrow or impoundment of franchise fees; inadequate funding Sec. 12. If the commissioner finds that:

(1) the franchisor has failed to demonstrate that adequate financial arrangements have been made to fulfill obligations to provide real estate, improvements, equipment, inventory, training, or other items included in the offering; and

(2) the escrow or impoundment of franchise fees is necessary and appropriate to protect prospective franchisees;

the commissioner may by order require the escrow or impoundment of franchise fees and other funds paid by the franchisee until no later than the time of opening of the business of the franchisee.

Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.168-2001, SEC.4.

IC 23-2-2.5-13Disclosure statements Sec. 13. A registration notification form filed under section 10.5 of this chapter shall be accompanied by the fee prescribed in section 43 of this chapter and by one (1) copy of a disclosure statement. The disclosure statement shall be in a form prescribed by the commissioner or in a form permitted under 16 CFR 436, as amended.

Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.168-2001, SEC.5.

IC 23-2-2.5-13.1Material change in information; amended disclosure statement required Sec. 13.1. (a) Subject to subsection (b), a person that has a registration in effect under this chapter shall, not later than thirty (30) days after the occurrence of any material change in the information set forth in the person's disclosure statement under section 13 of this chapter, notify the commissioner of the change by filing an amended copy of the disclosure statement.

(b) A "material change" requiring notification to the commissioner under subsection (a) includes the following:

(1) The occurrence of any of the following within any three (3) month period:

(A) The termination, closing, or failure to renew the franchise of either:

(i) ten percent (10%) of all franchises of the franchisor, regardless of the location of the franchises; or

(ii) ten percent (10%) of the franchisor's franchises that are located in Indiana.

(B) The purchase by the franchisor of either:

(i) ten percent (10%) of the franchisor's existing franchises, regardless of the location of the franchises; or

(ii) ten percent (10%) of the franchisor's existing franchises that are located in Indiana.

(2) Any:

(A) change in control, corporate name, or state of incorporation; or

(B) reorganization;

of the franchisor.

(3) Either of the following:

(A) The introduction of any new product, service, model, or line involving, directly or indirectly, an additional investment by franchisees that exceeds twenty percent (20%) of the average investment made by all franchisees immediately before the introduction of the new product, service, model, or line.

(B) The discontinuation or modification of the marketing plan or marketing system of any product or service of the franchisor if the average total sales attributable to the product or service exceed twenty percent (20%) of the average annual gross sales of existing franchisees immediately before the discontinuation or modification of the marketing plan or marketing system.

(4) Any change in the franchise fees charged by the franchisor.

(5) Any significant change in:

(A) the obligations of a franchisee to purchase items from the franchisor or the franchisor's designated sources;

(B) the limitations or restrictions on goods or services that a franchisee may offer to a customer;

(C) the obligations to be performed by the franchisor or a franchisee; or

(D) the franchise contract or agreement, including any amendments to the franchise contract or agreement.

(6) Any other change designated as material by the commissioner by rule adopted or order issued under this chapter.

As added by P.L.152-2020, SEC.3.

IC 23-2-2.5-14Stop orders; descriptions of charges Sec. 14. (a) The commissioner may, without a hearing, issue a stop order denying the effectiveness of or suspending or revoking the effectiveness of a registration if the commissioner finds that the issuance of the order is in the public interest and also finds that:

(1) there has been a failure to comply with this chapter or the rules or orders of the commissioner pertaining to this chapter;

(2) the offer or sale of the franchise would constitute misrepresentation to, or deceit or fraud on, the purchasers or offerees;

(3) the franchisor has failed to comply with any rule promulgated or order issued pursuant to section 12 of this chapter; or

(4) the franchisor, or the franchisor's predecessor, or any of the franchisor's directors, trustees, general partners, chief executives, financial officers, accounting officers, franchise sales officers, or other principal officers, or, if the franchisor is a limited liability company, any member or manager of the franchisor:

(A) during the ten (10) year period immediately preceding the date of registration, has:

(i) been convicted of a felony;

(ii) pleaded nolo contendere to a felony charge; or

(iii) been held liable in a civil action by final judgment;

if the felony or civil action involved fraud, embezzlement, misappropriation of property, or the violation of any state or federal statute involving the offer or sale of securities or franchises;

(B) is subject to any currently effective order affecting the franchise resulting from a proceeding or pending action brought by any individual or public agency or department;

(C) is a defendant in any pending criminal or material civil proceeding;

(D) during the ten (10) year period immediately preceding the date of registration, has been the defendant against whom a final judgment was entered in any material civil action; or

(E) is the franchisor or a principal executive officer or general partner of the franchisor and has, during the ten (10) year period immediately preceding the date of registration, reorganized due to insolvency or been adjudicated as a bankrupt.

(b) An order issued under this section based on a finding by the commissioner under subsection (a)(4)(A) must include a description of the charge, violation, or judgment referred to in subsection (a)(4)(A). An order issued under this section based on a finding by the commissioner under subsection (a)(4)(B) must include a copy of the order referred to in subsection (a)(4)(B). An order issued under this section based on a finding by the commissioner under subsection (a)(4)(D) must include a description of the judgment referred to in subsection (a)(4)(D). An order issued under this section based on a finding by the commissioner under subsection (a)(4)(E) must include a description of the insolvency or adjudication referred to in subsection (a)(4)(E).

(c) Before issuing a stop order under subsection (a)(4), such an order must be based on a finding by the commissioner that involvement of a person referred to in subsection (a)(4) creates an unreasonable risk to prospective franchisees.

Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.168-2001, SEC.6; P.L.30-2002, SEC.1; P.L.1-2003, SEC.73.

IC 23-2-2.5-15Notice of stop order Sec. 15. (a) Upon the entry of a stop order under section 14 of this chapter, the commissioner shall notify the franchisor:

(1) of the entry of the stop order;

(2) of the reasons for the stop order; and

(3) that, upon receipt of a written request, the matter will be set down for hearing to commence within fifteen (15) days after receipt of such request, unless the franchisor consents to a later date.

(b) If no hearing is requested or none is ordered by the commissioner, the stop order is effective until it is modified or vacated by the commissioner.

(c) If a hearing is requested or ordered, the commissioner, after notice and hearing, may modify or vacate the stop order.

Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.168-2001, SEC.7.

IC 23-2-2.5-16Stop orders; vacating or modifying Sec. 16. The commissioner may vacate or modify a stop order if he finds that the conditions which caused its entry have changed or that it is otherwise in the public interest to do so.

Formerly: Acts 1975, P.L.262, SEC.1.

IC 23-2-2.5-17Effectiveness of registration Sec. 17. If no stop order under section 14 of this chapter is in effect, registration by notification takes effect upon the commissioner's receipt of the notification form. A registration by notification is effective for a period of one (1) year.

Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.168-2001, SEC.8.

IC 23-2-2.5-18Renewal of registration; period Sec. 18. A registration by notification may be renewed by submitting to the commissioner a registration renewal form not later than the date the registration is due to expire. Registration of the offer is renewed at the time the registration would have expired unless the franchisor requests an earlier renewal date. A renewal is effective for a period of one (1) year unless the commissioner specifies a shorter period.

Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.168-2001, SEC.9; P.L.48-2006, SEC.6; P.L.152-2020, SEC.4.

IC 23-2-2.5-19Renewal forms Sec. 19. A registration renewal form shall be in the form and contain the content prescribed by the commissioner and shall be accompanied by one (1) copy of the proposed disclosure statement. Each such registration renewal form shall be accompanied by the fee prescribed in section 43 of this chapter.

Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.168-2001, SEC.10.

IC 23-2-2.5-20RepealedFormerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.233-1985, SEC.3. Repealed by P.L.30-2002, SEC.3.

IC 23-2-2.5-21Records of sales Sec. 21. Every franchisor offering franchises for sale shall maintain a complete set of books, records, and accounts of those sales.

Formerly: Acts 1975, P.L.262, SEC.1.

IC 23-2-2.5-22Experts Sec. 22. The commissioner may accept and act upon the opinions, appraisals, or reports of any experts which may be presented by a franchisor or any interested party, on any question of fact concerning the franchises proposed to be offered or sold. The commissioner may also have any or all matters concerning those franchises investigated, appraised, passed upon or certified to the commissioner by any experts selected by the commissioner, at the expense of the franchisor.

Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.168-2001, SEC.11.

IC 23-2-2.5-23Registration or filing not considered finding upon merits Sec. 23. (a) Neither:

(1) the fact that a registration renewal form has been filed or a registration notification form has been submitted to the commissioner under section 10.5 of this chapter; nor

(2) the fact that such registration has become effective;

constitutes a finding by the commissioner that any document filed under this chapter is true, complete, or not misleading. Neither any such fact nor the fact that an exemption is available for a transaction means that the commissioner has passed in any way upon the merits or qualifications of, or recommended or given approval to, any person, franchise or transaction.

(b) A person may not make or cause to be made to any prospective purchaser or offeree any representation inconsistent with subsection (a).

Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.168-2001, SEC.12.

IC 23-2-2.5-24Consent to service of process on secretary of state Sec. 24. Before a person may offer to sell franchises under this chapter, the person shall file with the commissioner, in the form that the commissioner by rule or order prescribes, an irrevocable consent appointing the secretary of state or any successor secretary of state to be the person's attorney to receive service of any lawful process in any noncriminal suit, action, or proceeding against the person or the person's successor, executor, or administrator that arises under this chapter or any rule or order under this chapter after the consent has been filed with the same force as if served personally on the person filing the consent. A person who has filed a consent with the commissioner for a previous registration or exemption under this chapter is not required to file another consent. The person's previous consent shall remain effective for all subsequent registrations or exemptions filed by the person under this chapter. Service shall be made in accordance with the Indiana Rules of Civil Procedure.

Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.1-1991, SEC.159; P.L.168-2001, SEC.13.

IC 23-2-2.5-25RepealedFormerly: Acts 1975, P.L.262, SEC.1. Repealed by P.L.30-2002, SEC.3.

IC 23-2-2.5-26Advertisements containing false statements; notification; hearing Sec. 26. No person shall publish or cause to be published any advertisement concerning any franchise in Indiana after the commissioner finds that the advertisement contains any statement that is false, is misleading or omits to make any statement necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading and so notifies the person in writing. Such notification may be given without notice of hearing. At any time after the issuance of a notification under this section, the person desiring to use the advertisement may request in writing that the order be rescinded. Upon the receipt of such written request, the matter shall be set down for hearing to commence within fifteen (15) days after receipt of the request unless the person making that request consents to a later date.

Formerly: Acts 1975, P.L.262, SEC.1.

IC 23-2-2.5-27Fraud or deceit unlawful Sec. 27. It is unlawful for any person in connection with the offer, sale or purchase of any franchise, or in any filing made with the commissioner, directly or indirectly: (1) to employ any device, scheme or artifice to defraud; (2) to make any untrue statements of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of circumstances under which they are made, not misleading; or (3) to engage in any act which operates or would operate as a fraud or deceit upon any person.

Formerly: Acts 1975, P.L.262, SEC.1.

IC 23-2-2.5-28Violations; judgment; damages; interest; attorney's fees Sec. 28. A person who recovers judgment for a violation of this chapter may recover, as part of that judgment: (1) any consequential damages; (2) interest at eight percent (8%) on the judgment; and (3) reasonable attorney's fees; unless the defendant proves that the plaintiff knew the facts concerning the violation, or that the defendant exercised reasonable care and did not know, or, if he had exercised reasonable care, would not have known, of the facts concerning the violation.

Formerly: Acts 1975, P.L.262, SEC.1.

IC 23-2-2.5-29Aiders and abettors in violations; joint and several liability Sec. 29. Every person who materially aids or abets in an act or transaction constituting a violation of this chapter is also liable jointly and severally to the same extent as the person whom he aided and abetted, unless the person who aided and abetted had no knowledge of or reasonable grounds to believe in the existence of the facts by reason of which the liability is alleged to exist.

Formerly: Acts 1975, P.L.262, SEC.1.

IC 23-2-2.5-30Limitation of actions Sec. 30. A person may not maintain an action to enforce any liability created under this chapter unless brought before the expiration of three (3) years after discovery by the plaintiff of the facts constituting the violation.

Formerly: Acts 1975, P.L.262, SEC.1.

IC 23-2-2.5-31Survival of actions Sec. 31. Every civil action under this chapter survives the death of any person who might have been a plaintiff or defendant.

Formerly: Acts 1975, P.L.262, SEC.1.

IC 23-2-2.5-32Remedies Sec. 32. Whenever it appears to the commissioner that any person has engaged or is about to engage in any act or practice constituting a violation of any provision of this chapter or any rule adopted or order issued under this chapter, the commissioner may in the commissioner's discretion bring an action in the appropriate circuit or superior court to enjoin the acts or practices, to enforce compliance with this chapter, or to obtain any other appropriate remedy. Upon proper showing, a permanent or preliminary injunction, restraining order, declaratory judgment or other appropriate remedy shall be granted and, in addition to and independent of any other remedy granted in this section, a receiver or conservator may be appointed for the defendant or the defendant's assets. The court may not require the commissioner to post a bond.

Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.136-2018, SEC.128.

IC 23-2-2.5-33Investigations; proceedings; powers; self-incrimination Sec. 33. (a) The commissioner may in his discretion make such investigations as he deems necessary to determine whether any person has violated or is about to violate any provision of this chapter.

(b) For the purpose of any investigation or proceeding under this chapter, the commissioner or his representative may administer oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, agreements, or other documents or records which the commissioner deems material to the inquiry.

(c) Upon order of the commissioner or his representative in any hearing, depositions may be taken of any witness, to be taken in the manner prescribed by law for depositions in civil actions, and made returnable to the commissioner or his representative.

(d) In case of failure by any person to obey a subpoena, the circuit or superior court, upon application by the commissioner, may issue to the person an order requiring him to appear before the commissioner, or his representative, there to produce documentary evidence, if so ordered, or to give evidence touching the matter under investigation.

(e) No person is excused from attending and testifying or from producing any document or record before the commissioner, or in obedience to the subpoena of the commissioner, or his representative, or in any proceeding instituted by the commissioner, on the grounds that the testimony or evidence, documentary or otherwise, required of him may tend to incriminate him or subject him to a penalty or forfeiture; but no person may be prosecuted or subjected to any penalty or forfeiture for or on account of any transaction, matter, or thing concerning which he is compelled, after validly claiming his privilege against self-incrimination, to testify or produce evidence documentary or otherwise.

Formerly: Acts 1975, P.L.262, SEC.1.

IC 23-2-2.5-34Violations; orders and notices; hearing; costs; civil penalties; enforcement action Sec. 34. (a) If it appears to the commissioner that:

(1) the offer of any franchise is subject to registration under this chapter and it is being, or it has been, offered for sale without such offer first being registered; or

(2) a person has engaged in or is about to engage in an act, a practice, or a course of business constituting a violation of this chapter or a rule or an order under this chapter;

the commissioner may investigate and may issue, with or without a prior hearing, orders and notices as the commissioner determines to be in the public interest, including cease and desist orders, orders to show cause, and notices. After notice and an opportunity for hearing, the commissioner may enter an order of rescission, restitution, or disgorgement, including interest at the rate of eight percent (8%) per year, directed to a person who has violated this chapter or a rule or order under this chapter. In addition to all other remedies, the commissioner may bring an action in the name of and on behalf of the state against any person participating in or about to participate in a violation of this chapter, to enjoin the person from continuing or doing an act furthering a violation of this chapter and may obtain the appointment of a receiver or conservator. Upon a proper showing by the commissioner, the court shall enter an order of the commissioner directing rescission, restitution, or disgorgement against a person who has violated this chapter or a rule or order under this chapter.

(b) Upon the issuance of an order or a notice by the commissioner under subsection (a), the commissioner shall promptly notify the respondent of the following:

(1) That the order or notice has been issued.

(2) The reasons the order or notice has been issued.

(3) That upon the receipt of a written request the matter will be set for a hearing to commence not later than forty-five (45) business days after the commissioner receives the request, unless the respondent consents to a later date.

If the respondent does not request a hearing and the commissioner does not order a hearing, the order or notice will remain in effect until it is modified or vacated by the commissioner. If a hearing is requested or ordered, the commissioner, after giving notice of the hearing, may modify or vacate the order or extend it until final determination.

(c) In a final order, the commissioner may charge the costs of an investigation or a proceeding conducted in connection with a violation of:

(1) this chapter; or

(2) a rule or an order adopted or issued under this chapter;

to be paid as directed by the commissioner in the order.

(d) In a proceeding in a circuit or superior court under this section, the commissioner is entitled to recover all costs and expenses of investigation to which the commissioner would be entitled in an administrative proceeding, and the court shall include the costs in its final judgment.

(e) If the commissioner determines, after notice and opportunity for a hearing, that a person has violated this chapter, the commissioner may, in addition to or instead of all other remedies, impose a civil penalty upon the person in an amount not to exceed ten thousand dollars ($10,000) for each violation. An appeal from the decision of the commissioner imposing a civil penalty under this subsection may be taken by an aggrieved party under section 44 of this chapter.

(f) The commissioner may bring an action in the circuit or superior court of Marion County to enforce payment of any penalty imposed under subsection (e).

(g) Penalties collected under this section shall be deposited in the securities division enforcement account established under IC 23-19-6-1(f).

Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.230-2007, SEC.5; P.L.1-2009, SEC.129.

IC 23-2-2.5-35Offer of franchise exempt from registration without compliance with IC 23-2-2.5-3 and IC 23-2-2.5-27; cease and desist order; hearing Sec. 35. If, in the opinion of the commissioner, the offer of any franchise exempt from registration under this chapter is being or has been offered for sale without complying with sections 3 and 27, the commissioner may order the franchisor or offeror of such franchise to cease and desist from the further offer or sale of such franchise unless and until such offer is made in compliance with this chapter. If, after such an order has been made, a request for a hearing is filed in writing by the person affected, a hearing shall be held to commence within fifteen (15) days after the request is made, unless the person affected consents to a later date.

Formerly: Acts 1975, P.L.262, SEC.1.

IC 23-2-2.5-36Prosecution of violations Sec. 36. The commissioner may refer such evidence as is available concerning any violation of this chapter to the prosecuting attorney of the county in which the violation occurred, who may, with or without such a reference, institute appropriate criminal proceedings under this chapter. If evidence concerning violations of this chapter is referred to a prosecuting attorney, he shall within ninety (90) days file with the commissioner a written statement concerning any action taken or, if no action has been taken, the reasons therefor.

Formerly: Acts 1975, P.L.262, SEC.1.

IC 23-2-2.5-37Violations; felony Sec. 37. A person who knowingly violates this chapter commits a Level 5 felony.

Formerly: Acts 1975, P.L.262, SEC.1. As amended by Acts 1978, P.L.2, SEC.2307; P.L.158-2013, SEC.262.

IC 23-2-2.5-38Conduct equivalent to appointment of secretary of state for service of process Sec. 38. When any person engages in conduct prohibited by this chapter, whether or not he has filed a consent to service of process under section 24 and personal jurisdiction over him cannot otherwise be obtained in this state, that conduct shall be considered equivalent to his appointment of the secretary of state or his successor in office to be his attorney to receive service of any lawful process in any civil action or proceeding against him or his successor or personal representative which grows out of that conduct and which is brought under this chapter, with the same force and validity as if served on him personally. Service shall be made in accordance with the Indiana Rules of Civil Procedure.

Formerly: Acts 1975, P.L.262, SEC.1.

IC 23-2-2.5-39Exemption or classification; burden of proof Sec. 39. The burden of proof of the entitlement to any exemption or classification provided in this chapter, in any civil or criminal proceeding is on the party claiming the exemption or classification.

Formerly: Acts 1975, P.L.262, SEC.1.

IC 23-2-2.5-40Certificate of commissioner as evidence Sec. 40. In any civil or criminal proceeding under this chapter a certificate duly signed by the commissioner showing compliance or noncompliance with this chapter respecting the franchise in question or respecting compliance or noncompliance with this chapter by any person constitutes prima facie evidence of such compliance or such noncompliance and is admissible in evidence in any such proceeding.

Formerly: Acts 1975, P.L.262, SEC.1.

IC 23-2-2.5-41Statements and documents filed with secretary of state as evidence Sec. 41. Copies of any statements and documents filed in the office of the secretary of state and of any records of the secretary of state certified by the commissioner are admissible in any civil or criminal proceeding under this chapter to the same effect as the original of such statement, document or record would be if actually produced.

Formerly: Acts 1975, P.L.262, SEC.1.

IC 23-2-2.5-42Administration of chapter Sec. 42. This chapter shall be administered by the office of the secretary of state of Indiana through the commissioner.

Formerly: Acts 1975, P.L.262, SEC.1.

IC 23-2-2.5-43Fees and funds; accounting; fees for registration and renewal Sec. 43. (a) All fees and funds of whatever character accruing from the administration of this chapter shall be:

(1) accounted for by the secretary of state;

(2) paid into the state treasury monthly; and

(3) placed in the same account of the state general fund as established by IC 23-19-6-1(f), from which all compensation and expenses shall be paid for the administration of this chapter.

(b) The fee for filing a form for registration by notification of the sale of franchises under section 10.5 of this chapter is five hundred dollars ($500).

(c) The fee for filing a registration renewal form under section 18 of this chapter is two hundred fifty dollars ($250).

(d) If a registration notification form or registration renewal form is denied or withdrawn, the commissioner shall retain the amount of the fee submitted under subsection (b) or (c), as applicable.

Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.233-1985, SEC.4; P.L.168-2001, SEC.14; P.L.30-2002, SEC.2; P.L.27-2007, SEC.11; P.L.152-2020, SEC.5.

IC 23-2-2.5-44Appeal Sec. 44. An appeal may be taken by any person from any final order of the commissioner affecting such person in the same manner as prescribed in IC 23-19-6-9.

Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.27-2007, SEC.12.

IC 23-2-2.5-45Assistance of attorney general; expenses Sec. 45. In connection with the administration and enforcement of the provisions of this chapter, it is hereby made the duty of the attorney general of Indiana to render all necessary assistance to the commissioner upon the commissioner's request, and to that end the attorney general shall employ such legal and such other professional services as shall be necessary to adequately and fully perform such service under the direction of the commissioner as the demands of the securities division shall require, and any expenses so incurred by the attorney general for the purposes aforesaid shall be chargeable against and paid out of the securities division fund and if such fund is insufficient for the payment of such expenses and any expenses of the securities division incident to the administration of this chapter, then a sufficient sum of money for the payment of any such deficiency is hereby appropriated annually out of any money received by the secretary of state as fees for the incorporation and for the filing of the biennial reports of corporations.

Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.119-2015, SEC.24.

IC 23-2-2.5-46Liability for performance of official duties Sec. 46. Neither the secretary of state nor the commissioner, nor any employee of the securities division shall be liable in their individual capacity, except to the state of Indiana, for any act done or omitted in connection with the performance of their respective duties under the provisions of this chapter.

Formerly: Acts 1975, P.L.262, SEC.1.

IC 23-2-2.5-47Construction and purpose of chapter Sec. 47. All provisions of this chapter delegating and granting power to the secretary of state, the securities division and the commissioner shall be liberally construed to the end that the practice or commission of fraud may be prohibited and prevented, disclosure of sufficient and reliable information in order to afford reasonable opportunity for the exercise of independent judgment of the persons involved may be assured, in connection with the issuance, barter, sale, purchase, transfer or disposition of franchises in this state. It is the intent and purpose of this chapter to delegate and grant to and vest in the secretary of state, the securities division and the commissioner full and complete power to carry into effect and accomplish the purpose of this chapter and to charge them with full and complete responsibility for the effective administration thereof.

Formerly: Acts 1975, P.L.262, SEC.1.

IC 23-2-2.5-48Public records; inspection; disclosure or use of information restricted; copies; destruction Sec. 48. (a) All registration notification forms, registration renewal forms, applications to amend registrations, reports, and other papers and documents filed with the commissioner under this chapter shall be open to public inspection. The commissioner may publish any information filed with or obtained by the commissioner. No provision of this chapter authorizes the commissioner or any of the commissioner's assistants, clerks, or deputies to disclose any information withheld from public inspection except among themselves or when necessary or appropriate in a proceeding or investigation under this chapter or to other federal or state regulatory agencies. No provision of this chapter either creates or derogates from any privilege which exists at common law or otherwise when documentary or other evidence is sought under a subpoena directed to the commissioner or any of the commissioner's assistants, clerks, or deputies.

(b) It is unlawful for the commissioner or any of the commissioner's assistants, clerks, or deputies to use for personal benefit any information which is filed with or obtained by the commissioner and which is not then generally available to the public.

(c) Upon request, and at such reasonable charges as the commissioner prescribes by rule, the commissioner shall furnish to any person photostatic or other copies (certified by the commissioner if certification is requested) of any document which is retained as a matter of public record, except that the commissioner shall not charge or collect any fee for photostatic or other copies of any document furnished to public officers for use in their official capacity.

(d) The commissioner may destroy any registration notification forms, together with the files and folders, as useless or obsolete, four (4) years after the date of registration; provided that a permanent record shall be maintained of any disciplinary action taken by the commissioner and of all orders issued under this chapter.

(e) Copies on microfilm or in other form which may be retained by the commissioner of any records destroyed under this section shall be accepted for all purposes as equivalent to the original when certified by the commissioner.

Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.168-2001, SEC.15.

IC 23-2-2.5-49Construction with other laws Sec. 49. Nothing in this chapter shall be construed to relieve corporations or other business organizations from making reports required by law to be made to the secretary of state, or any other state officer, or paying the fees to be paid by corporations or other business organizations. This chapter shall not be construed to repeal any law now in force regulating the organization of corporations or other business organizations in Indiana, or the admission of any foreign corporation but the provisions of this chapter shall be construed to be additional to any provisions regulating the organization of a corporation or other business organization under the laws of Indiana, or the admission of a foreign corporation to do business in Indiana.

Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.136-2018, SEC.129.

IC 23-2-2.5-50Administrative orders and procedures Sec. 50. IC 4-21.5 does not apply to proceedings under this chapter.

Formerly: Acts 1975, P.L.262, SEC.1. As amended by P.L.7-1987, SEC.103.

IC 23-2-2.5-51Service stations; succession to ownership by family member of deceased franchisee Sec. 51. (a) Any designated family member of a deceased service station franchisee may succeed to the ownership of the existing agreement if all of the following conditions are met:

(1) The designated family member gives the service station franchisor written notice of the intention to succeed to the service station agreement within thirty (30) days of the service station franchisee's death.

(2) The designated family member agrees to be bound by all terms and conditions of the existing owner's franchise agreement.

(3) There is no good cause for the service station franchisor to refuse to honor the succession.

For purposes of this subsection, the grounds for termination or nonrenewal of a franchise set out in the federal Petroleum Marketing Practices Act (15 U.S.C. 2801 et seq.) constitute good cause. Notification of the refusal must be submitted to the designated family member in writing within sixty (60) days after the date of the service station franchisee's death, and must specify the reasons for the refusal. The form of the written notice required under this subsection shall be prescribed in the terms of the agreement.

(b) This section does not apply to agreements between franchisors and service station franchisees entered into or renewed before July 1, 1983.

As added by P.L.241-1983, SEC.2.

IC 23-2-2.7Chapter 2.7. Deceptive Franchise Practices

23-2-2.7-1Franchise agreement; unlawful provisions 23-2-2.7-2Franchise agreement; unlawful acts and practices 23-2-2.7-3Termination or election not to renew franchise; notice 23-2-2.7-4Action to recover damages or reform franchise agreement 23-2-2.7-5Franchise defined 23-2-2.7-6Application of chapter 23-2-2.7-7Limitation of actions

IC 23-2-2.7-1Franchise agreement; unlawful provisions Sec. 1. It is unlawful for any franchise agreement entered into between any franchisor and a franchisee who is either a resident of Indiana or a nonresident who will be operating a franchise in Indiana to contain any of the following provisions:

(1) Requiring goods, supplies, inventories, or services to be purchased exclusively from the franchisor or sources designated by the franchisor where such goods, supplies, inventories, or services of comparable quality are available from sources other than those designated by the franchisor. However, the publication by the franchisor of a list of approved suppliers of goods, supplies, inventories, or service or the requirement that such goods, supplies, inventories, or services comply with specifications and standards prescribed by the franchisor does not constitute designation of a source nor does a reasonable right of the franchisor to disapprove a supplier constitute a designation. This subdivision does not apply to the principal goods, supplies, inventories, or services manufactured or trademarked by the franchisor.

(2) Allowing the franchisor to establish a franchisor-owned outlet engaged in a substantially identical business to that of the franchisee within the exclusive territory granted the franchisee by the franchise agreement; or, if no exclusive territory is designated, permitting the franchisor to compete unfairly with the franchisee within a reasonable area.

(3) Allowing substantial modification of the franchise agreement by the franchisor without the consent in writing of the franchisee.

(4) Allowing the franchisor to obtain money, goods, services, or any other benefit from any other person with whom the franchisee does business, on account of, or in relation to, the transaction between the franchisee and the other person, other than for compensation for services rendered by the franchisor, unless the benefit is promptly accounted for, and transmitted to the franchisee.

(5) Requiring the franchisee to prospectively assent to a release, assignment, novation, waiver, or estoppel which purports to relieve any person from liability to be imposed by this chapter or requiring any controversy between the franchisee and the franchisor to be referred to any person, if referral would be binding on the franchisee. This subdivision does not apply to arbitration before an independent arbitrator.

(6) Allowing for an increase in prices of goods provided by the franchisor which the franchisee had ordered for private retail consumers prior to the franchisee's receipt of an official price increase notification. A sales contract signed by a private retail consumer shall constitute evidence of each order. Price changes applicable to new models of a product at the time of introduction of such new models shall not be considered a price increase. Price increases caused by conformity to a state or federal law, or the revaluation of the United States dollar in the case of foreign-made goods, are not subject to this subdivision.

(7) Permitting unilateral termination of the franchise if such termination is without good cause or in bad faith. Good cause within the meaning of this subdivision includes any material violation of the franchise agreement.

(8) Permitting the franchisor to fail to renew a franchise without good cause or in bad faith. This chapter shall not prohibit a franchise agreement from providing that the agreement is not renewable upon expiration or that the agreement is renewable if the franchisee meets certain conditions specified in the agreement.

(9) Requiring a franchisee to covenant not to compete with the franchisor for a period longer than three (3) years or in an area greater than the exclusive area granted by the franchise agreement or, in absence of such a provision in the agreement, an area of reasonable size, upon termination of or failure to renew the franchise.

(10) Limiting litigation brought for breach of the agreement in any manner whatsoever.

(11) Requiring the franchisee to participate in any:

(A) advertising campaign or contest;

(B) promotional campaign;

(C) promotional materials; or

(D) display decorations or materials;

at an expense to the franchisee that is indeterminate, determined by a third party, or determined by a formula, unless the franchise agreement specifies the maximum percentage of gross monthly sales or the maximum absolute sum that the franchisee may be required to pay.

As added by Acts 1976, P.L.116, SEC.1. Amended by P.L.233-1985, SEC.5; P.L.11-1987, SEC.27.

IC 23-2-2.7-2Franchise agreement; unlawful acts and practices Sec. 2. It is unlawful for any franchisor who has entered into any franchise agreement with a franchisee who is either a resident of Indiana or a nonresident operating a franchise in Indiana to engage in any of the following acts and practices in relation to the agreement:

(1) Coercing the franchisee to:

(i) order or accept delivery of any goods, supplies, inventories, or services which are neither necessary to the operation of the franchise, required by the franchise agreement, required by law, nor voluntarily ordered by the franchisee;

(ii) order or accept delivery of any goods offered for sale by the franchisee which includes modifications or accessories which are not included in the base price of those goods as publicly advertised by the franchisor;

(iii) participate in an advertising campaign or contest, any promotional campaign, promotional materials, display decorations, or materials at an expense to the franchisee over and above the maximum percentage of gross monthly sales or the maximum absolute sum required to be spent by the franchisee provided for in the franchise agreement; in the absence of such provision for required advertising expenditures in the franchise agreement, no such participation may be required; or

(iv) enter into any agreement with the franchisor or any designee of the franchisor, or do any other act prejudicial to the franchisee, by threatening to cancel or fail to renew any agreement between the franchisee and the franchisor. Notice in good faith to any franchisee of the franchisee's violation of the terms or provisions of a franchise or agreement does not constitute a violation of this subdivision.

(2) Refusing or failing to deliver in reasonable quantities and within a reasonable time after receipt of an order from a franchisee for any goods, supplies, inventories, or services which the franchisor has agreed to supply to the franchisee, unless the failure is caused by acts or causes beyond the control of the franchisor.

(3) Denying the surviving spouse, heirs, or estate of a deceased franchisee the opportunity to participate in the ownership of the franchise under a valid franchise agreement for a reasonable time after the death of the franchisee, provided that the surviving spouse, heirs, or estate maintains all standards and obligations of the franchise.

(4) Establishing a franchisor-owned outlet engaged in a substantially identical business to that of the franchisee within the exclusive territory granted the franchisee by the franchise agreement or, if no exclusive territory is designated, competing unfairly with the franchisee within a reasonable area. However, a franchisor shall not be considered to be competing when operating a business either temporarily for a reasonable period of time, or in a bona fide retail operation which is for sale to any qualified independent person at a fair and reasonable price, or in a bona fide relationship in which an independent person has made a significant investment subject to loss in the business operation and can reasonably expect to acquire full ownership of such business on reasonable terms and conditions.

(5) Discriminating unfairly among its franchisees or unreasonably failing or refusing to comply with any terms of a franchise agreement.

(6) Obtaining money, goods, services, or any other benefit from any other person with whom the franchisee does business, on account of, or in relation to, the transaction between the franchisee and the other person, other than compensation for services rendered by the franchisor, unless the benefit is promptly accounted for, and transmitted to the franchisee.

(7) Increasing prices of goods provided by the franchisor which the franchisee had ordered for retail consumers prior to the franchisee's receipt of a written official price increase notification. Price increases caused by conformity to a state or federal law, the revaluation of the United States dollar in the case of foreign-made goods or pursuant to the franchise agreement are not subject to this subdivision.

(8) Using deceptive advertising or engaging in deceptive acts in connection with the franchise or the franchisor's business.

As added by Acts 1976, P.L.116, SEC.1. Amended by P.L.233-1985, SEC.6.

IC 23-2-2.7-3Termination or election not to renew franchise; notice Sec. 3. Unless otherwise provided in the agreement, any termination of a franchise or election not to renew a franchise must be made on at least ninety (90) day's notice.

As added by Acts 1976, P.L.116, SEC.1.

IC 23-2-2.7-4Action to recover damages or reform franchise agreement Sec. 4. Any franchisee who is a party to a franchise agreement entered into or renewed after July 1, 1976 which contains any provision set forth in Section 1 of this chapter or who is injured by an unfair act or practice set forth in Section 2 of this chapter may bring an action to recover damages, or reform the franchise agreement.

As added by Acts 1976, P.L.116, SEC.1.

IC 23-2-2.7-5Franchise defined Sec. 5. For the purposes of this chapter, franchise means any franchise as defined in IC 23-2-2.5-1, clauses (a) (1) (2) and (3), and any agreement meeting the provisions of IC 23-2-2.5-1, clauses (a) (1) and (2) which relates to the business of selling automobiles and/or trucks and the business of selling gasoline and/or oil primarily for use in vehicles with or without the sale of accessory items.

As added by Acts 1976, P.L.116, SEC.1.

IC 23-2-2.7-6Application of chapter Sec. 6. The provisions of this chapter apply only to agreements entered into or renewed, or act or practice occurring after July 1, 1976.

As added by Acts 1976, P.L.116, SEC.1.

IC 23-2-2.7-7Limitation of actions Sec. 7. No action may be brought for a violation of this chapter more than two (2) years after the violation.

As added by Acts 1976, P.L.116, SEC.1.

IC 23-2-3Chapter 3. RepealedRepealed by Acts 1979, P.L.235, SEC.2.

IC 23-2-3.1Chapter 3.1. Takeover Offers

23-2-3.1-0.5Legislative finding; purpose 23-2-3.1-1Definitions 23-2-3.1-2Compliance with designated sections 23-2-3.1-3Statement; filing with commissioner; copy to target company 23-2-3.1-4Statement; consent to service of process; filing fee 23-2-3.1-5Contents of statement; document prepared under federal law 23-2-3.1-5.5Definitions; application of section 23-2-3.1-6Repealed 23-2-3.1-6.5Terms of offer; requisites; number of offerees 23-2-3.1-7Hearing; findings and order; notices; expenses; right to appear; insurance companies 23-2-3.1-8Purchase of shares; prohibition 23-2-3.1-8.4Subsequent acquisition of equity securities by offeror; equivalent terms; limitation 23-2-3.1-8.5Statements of material fact; omissions; false or misleading statements; fraudulent, deceptive, or manipulative acts 23-2-3.1-8.6Exempt acquisitions; notice and hearing to precede order 23-2-3.1-9Administration of chapter; regulations; immunity 23-2-3.1-10Cease and desist orders; injunctions; subpoenas; production of books and papers 23-2-3.1-11Appeal; notice; transcript; disposition on appeal

IC 23-2-3.1-0.5Legislative finding; purpose Sec. 0.5. (a) The general assembly finds that it is often difficult for corporate shareholders to obtain sufficient information to make an informed and timely decision when faced with the questions of accepting or rejecting a takeover offer. Moreover, there have emerged a number of practices which have resulted in shareholders of Indiana corporations losing the benefits of takeover offers because they lacked the sophistication and ability to secure those benefits. These practices have included multiple proration pools, two-step transactions and similar practices, and have resulted in relatively small shareholders losing both the advantages of the takeover offer and their equity positions in the corporation.

(b) By enacting this chapter, it is the intent and purpose of the general assembly to provide for full and fair disclosure of all material information concerning takeover offers to shareholders of Indiana corporations, so that the opportunity of each shareholder to make an informed and well-reasoned investment decision may be secured. It is also the purpose of the general assembly to protect shareholders of Indiana corporations from being disadvantaged by those practices described in subsection (a). Finally, it is the purpose of the general assembly to provide for adequate disclosure and that protection in a manner consistent with the Constitutions of the United States and of Indiana.

As added by Acts 1981, P.L.215, SEC.1. Amended by P.L.242-1983, SEC.1.

IC 23-2-3.1-1Definitions Sec. 1. As used in this chapter:

"Affiliate" means any person controlling, controlled by, or under the common control of another person.

"Beneficial owner of a security" means any person who, directly or indirectly, has the power to vote or direct the voting of all or part of the voting rights of the security, or has the power to dispose of or direct the disposition of the security.

"Commissioner" means the securities commissioner as defined in IC 23-19-1-2(4).

"Control" means possession, direct or indirect, of the power to direct or to cause the direction of the management and policies of a person, through the ownership of voting securities, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless that power is the result of an official position or corporate office. The term includes "controlling", "controlled by", and "under common control with." Control is presumed to exist if any person is the beneficial owner of ten percent (10%) or more of any class of the voting securities of any other person. This presumption may be rebutted only by a showing that control does not exist in fact, at a hearing pursuant to section 9 of this chapter.

"Equity security" means:

(1) any share or similar security carrying, at the time of the takeover offer, the right to vote on any matter by virtue of the articles of incorporation, bylaws, or governing instrument of the target company or the right to vote for directors or persons performing substantially similar functions by operation of law;

(2) any security convertible into a security described in subdivision (1) or any warrant or right to purchase that security; or

(3) any other security which, for the protection of investors, is an equity security pursuant to a regulation of the commissioner.

"Offeror" means a person who makes or in any way participates in making a takeover offer. The term includes all affiliates of that person and all persons who act jointly or in concert with that person for the purpose of acquiring, holding, or disposing of, or exercising any voting rights attached to, the equity securities of a target company. It also includes the target company with respect to acquisitions of its own equity securities and with respect to periods of time when it is controlled by or under common control with the offeror. It does not include a financial institution or broker-dealer loaning funds or extending credit to any offeror in the ordinary course of its business, or any accountant, attorney, financial institution, broker-dealer, newspaper or magazine of general circulation, consultant, or other person furnishing information, services, or advice to or performing ministerial or administrative duties for an offeror and not otherwise participating in the takeover offer.

"Offeree" means a record or beneficial owner of equity securities of the class which an offeror acquires or offers to acquire in connection with a takeover offer.

"Person" means an individual, corporation, limited liability company, association, partnership, trust, or other entity.

"Substantially equivalent terms" means terms under which the fair market value of the consideration offered any offeree of a class of equity securities of the target company (determined on a per share or a per unit basis) are equal to the highest consideration offered in connection with a takeover offer to any other offeree of that class (determined on a per share or per unit basis).

"Takeover offer" means an offer to acquire or an acquisition of any equity security of a target company, pursuant to a tender offer or request or invitation for tenders, if, after the acquisition, the offeror is directly or indirectly a record or beneficial owner of more than ten percent (10%) of any class of the outstanding equity securities of the target company.

"Target company" means an issuer of securities which is organized under the laws of this state, has its principal place of business in this state, and has substantial assets in this state. Target company does not include:

(1) a financial institution subject to regulation by the department of financial institutions under IC 28, if the takeover offer is subject to approval by the department of financial institutions;

(2) a corporation subject to regulation by the utility regulatory commission under IC 8, if the takeover offer is subject to approval of the commission; or

(3) a public utility, public utility holding company, bank holding company, or savings association subject to regulation by a federal agency, if the takeover offer is subject to the approval by that federal agency.

As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981, P.L.215, SEC.2; P.L.242-1983, SEC.2; P.L.23-1988, SEC.111; P.L.8-1993, SEC.311; P.L.79-1998, SEC.21; P.L.27-2007, SEC.13.

IC 23-2-3.1-2Compliance with designated sections Sec. 2. A person shall not make a takeover offer unless the offer is in compliance with sections 3, 4, 5.5, 6.5, 7, and 8 of this chapter.

As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981, P.L.215, SEC.3; P.L.242-1983, SEC.3; P.L.229-1989, SEC.1.

IC 23-2-3.1-3Statement; filing with commissioner; copy to target company Sec. 3. Any offeror, before making a takeover offer, shall:

(1) file any required statements with the commissioner in compliance with sections 5 and 5.5 of this chapter; and

(2) not later than the filing date of the statements, deliver a copy of each statement to the president of the target company at its principal office.

As added by Acts 1979, P.L.235, SEC.1. Amended by P.L.229-1989, SEC.2.

IC 23-2-3.1-4Statement; consent to service of process; filing fee Sec. 4. Each statement required under section 5 or 5.5 of this chapter must be accompanied by:

(1) a consent of the offeror to service of process specified in IC 23-19-6-11; and

(2) a filing fee of seven hundred fifty dollars ($750).

As added by Acts 1979, P.L.235, SEC.1. Amended by P.L.229-1989, SEC.3; P.L.27-2007, SEC.14.

IC 23-2-3.1-5Contents of statement; document prepared under federal law Sec. 5. (a) If the takeover offer is subject to any federal law, including the Securities Exchange Act of 1934 (15 U.S.C. 78), the statement must consist of one (1) copy of each document required to be filed with the Securities and Exchange Commission or any other federal agency.

(b) If the takeover offer is not subject to any requirement of federal law, the statement must be filed on forms prescribed by the commissioner and contain the following information:

(1) The identity of and material information concerning the offeror, including:

(A) if the offeror is a corporation:

(i) information concerning its organization, including the year and jurisdiction of its organization;

(ii) a description of each class of its capital stock and long-term debt;

(iii) a description of the business done by the offeror and its affiliates and any material changes of its business during the past three (3) years;

(iv) a description of the location and character of the principal properties of the offeror and its affiliates;

(v) a description of any material pending legal or administrative proceedings in which the offeror or any of its affiliates is a party;

(vi) the names of all directors and executive officers of the offeror and their material business activities and affiliations during the past three (3) years; and

(vii) audited financial statements of the offeror and its affiliates for its three (3) most recent annual accounting periods and interim financial statements for any current period; and

(B) if the offeror is not a corporation:

(i) information concerning the background of the person, including the person's material business activities and affiliations during the past three (3) years; and

(ii) a description of any material pending legal or administrative proceeding in which the person is a party.

(2) The source and amount of funds or other consideration used or to be used in acquiring any equity security, including:

(A) a statement describing any securities being offered in exchange for the equity securities of the target company; and

(B) if any part of the acquisition price is or will be represented by borrowed funds or other consideration, a description of the transaction and the names of all the parties.

(3) If the purpose of the acquisition is to gain control of the target company, a statement of any plans or proposals or negotiations with respect to the acquisition which the offeror has upon gaining control to:

(A) liquidate the target company;

(B) sell its assets;

(C) effect its merger or consolidation; or

(D) make any other major change in its business, corporate structure, management or personnel.

(4) The number of shares or units of any equity security of the target company of which each offeror is the record or beneficial owner or which the offeror has a right to acquire, directly or indirectly.

(5) Information as to any contracts, arrangements, understandings, or negotiations with any person concerning any equity security of the target company, including:

(A) transfers of any equity security, joint ventures, loan or option arrangements, puts and calls, guarantees of loan, guarantees against loss, guarantees of profits, division of losses or profits; or

(B) the giving or withholding of proxies;

naming the persons with whom those contracts, arrangements, or understandings have been entered into.

(6) Information as to any contracts, arrangements, understandings, or negotiations, with any officer, director, administrator, manager, executive employee, or record or beneficial owner of equity securities of the target company with respect to the tender of any equity securities of the target company, the purchase by the offeror of any equity securities owned by that person otherwise than pursuant to the takeover offer, the retention of any person in the person's present position or in any other management position or with respect to that person giving or withholding a favorable recommendation to the takeover offer.

(7) A description of the provisions made or to be made for providing all material information concerning the takeover offer to the offerees, including a description of the proposed takeover offer in the form proposed to be published or sent the offerees initially disclosing the takeover offer.

(8) Any other information which the commissioner prescribes by rule.

(c) In addition to information required under subsection (a) or (b), a statement filed under this section must include the following information:

(1) A description of any contract between the offeror and a government (other than the United States, a state of the United States, a commonwealth or possession of the United States, a government in free association with the United States, or a political subdivision of a state) executed during the three (3) years preceding the date of the filing of the statement.

(2) A description of any subsidy received by the offeror from a goverment described in subdivision (1) during the three (3) years preceding the date of the filing of the statement.

(3) A list of any offices or appointments held under a government described in subdivision (1) by the offeror if the offeror is an individual, or by a member of the board of directors or principal officer if the offeror is a corporation.

As added by Acts 1979, P.L.235, SEC.1. Amended by P.L.229-1989, SEC.4.

IC 23-2-3.1-5.5Definitions; application of section Sec. 5.5. (a) The definitions in IC 23-1-20 apply to this section, except to the extent of any conflict with section 1 of this chapter.

(b) This section applies to:

(1) a foreign corporation incorporated under a law other than the law of the United States or any state of the United States (as defined in IC 1-1-4-1); or

(2) a person who is not a citizen of the United States.

(c) This section does not apply to the initiation of a new business in Indiana by a person subject to this section.

(d) Notwithstanding any other provision of this title, a person subject to this section may not make a takeover offer unless the person files a statement with the commissioner under this subsection.

(e) The statement filed under subsection (d) must state the following:

(1) The financial sources to be used by the person in the takeover offer.

(2) The proposed consummation date of the takeover.

As added by P.L.229-1989, SEC.5.

IC 23-2-3.1-6RepealedAs added by Acts 1979, P.L.235, SEC.1. Repealed by Acts 1981, P.L.215, SEC.11.

IC 23-2-3.1-6.5Terms of offer; requisites; number of offerees Sec. 6.5. No takeover offer may be made which is not made to all offerees holding the same class of equity securities of the target company on substantially equivalent terms. A takeover offer to purchase less than any or all equity securities of the same class of the outstanding equity securities of the target company is not considered as having been made to all offerees of that class on substantially equivalent terms if the pro rata portion of equity securities of that class tendered by any offeree which will be accepted by the offeror is not equal to the highest pro rata portion of equity securities of that class tendered by any other offeree which will be accepted by the offeror. A takeover offer permitting offerees to elect to receive one (1) or more differing kinds of consideration is not considered as having been made to all offerees holding the same class of equity securities of the target company on substantially equivalent terms if proration occurs and the pro rata share of any one (1) or more differing kinds of consideration which is allocable to any offeree is not equal to the highest pro rata share allocable to any other offeree.

As added by P.L.242-1983, SEC.4.

IC 23-2-3.1-7Hearing; findings and order; notices; expenses; right to appear; insurance companies Sec. 7. (a) A hearing shall be held at any time within twenty (20) business days after the required statements under sections 5 and 5.5 of this chapter are filed. If, following the hearing, and within twenty (20) business days after a statement is filed, the commissioner finds by a preponderance of the evidence that:

(1) the takeover statement fails to provide full and fair disclosure to the offerees of all material information concerning the takeover offer; or

(2) the takeover offer is not made to all offerees of the same class of equity securities of the target company on substantially equivalent terms; the commissioner shall by order prohibit the purchase of shares tendered in response to the takeover offer or condition purchase upon changes or modifications.

(b) At least five (5) days notice shall be given to the target company, the offeror, and such other persons as the commissioner may designate that a hearing will be held under this section.

(c) The expenses, including the cost of transcripts, of all hearings held under this section shall be borne by the offeror. As security for the payment of the expenses, the offeror shall file with the commissioner an acceptable bond or other deposit in an amount determined by the commissioner.

(d) The target company, the offeror, any offeree, and any other person whose interests may be affected have the right to appear at any hearing held pursuant to this chapter and to become a party to the proceeding. Each such person has the right to present evidence, examine and cross-examine witnesses, offer oral written arguments and, in connection with the proceeding may conduct discovery proceedings in the manner provided in the Indiana Rules of Trial Procedure. The commissioner may employ any sanction or power granted courts in the Indiana Rules of Trial Procedure, excluding the power of contempt, to enforce the commissioner's discovery rulings or orders.

(e) In the case of a takeover offer subject to the approval of the insurance commissioner, the offeror within five (5) days after the statement is filed shall mail a notice to all offerees of the target company advising the offerees of the general terms and conditions of the takeover offer and the date of the hearing at which they may appear. No shares shall be tendered, or purchased by the offeror, until after approval by both the securities commissioner and the insurance commissioner. All expenses of notifying the offerees shall be borne by the offeror.

As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981, P.L.215, SEC.4; P.L.242-1983, SEC.5; P.L.229-1989, SEC.6.

IC 23-2-3.1-8Purchase of shares; prohibition Sec. 8. No shares shall be purchased or paid for pursuant to a takeover offer within the first twenty (20) business days after the offer is made. No shares shall be purchased or paid for in violation of any order of the commissioner.

As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981, P.L.215, SEC.5.

IC 23-2-3.1-8.4Subsequent acquisition of equity securities by offeror; equivalent terms; limitation Sec. 8.4. No offeror may acquire in any manner any equity security of any class of a target company at any time within two (2) years following the conclusion of a takeover offer with respect to that class, including but not limited to acquisitions made by purchase, exchange, merger, consolidation, partial or complete liquidation, redemption, reverse stock split, and any other recapitalization or reorganization, unless the holder of that equity security is also afforded, at the time of that acquisition, a reasonable opportunity to dispose of that security to the offeror upon substantially equivalent terms.

As added by P.L.242-1983, SEC.6.

IC 23-2-3.1-8.5Statements of material fact; omissions; false or misleading statements; fraudulent, deceptive, or manipulative acts Sec. 8.5. In connection with any takeover offer, or any solicitation of offerees in opposition to or in favor of any takeover offer, it is unlawful for any person to make any untrue statement of a material fact or to omit to state any material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or to engage in any fraudulent, deceptive, or manipulative acts or practices.

As added by Acts 1981, P.L.215, SEC.6.

IC 23-2-3.1-8.6Exempt acquisitions; notice and hearing to precede order Sec. 8.6. (a) The provisions of sections 2 through 7 of this chapter do not apply to the following:

(1) An acquisition by an offeror, if the instant transaction and all acquisitions of equity securities of the same class during the preceding twelve (12) months by the offeror or any of its affiliates do not exceed two percent (2%) of that class.

(2) An acquisition of equity securities of a target company having seventy-five (75) or fewer holders of record of equity securities at the time of the takeover offer.

(3) An acquisition determined by order of the commissioner to be a takeover offer that is not made for the purpose of, and not having the effect of, changing or influencing the control of a target company.

(b) An order may only be adopted under subsection (a)(3) of this section after a hearing. Not less than five (5) business days' notice of a hearing must be given to the target company, the offeror, and such other persons as the commissioner may designate.

(c) The burden of establishing entitlement to any exemption is on the offeror.

As added by Acts 1981, P.L.215, SEC.7. Amended by P.L.242-1983, SEC.7.

IC 23-2-3.1-9Administration of chapter; regulations; immunity Sec. 9. (a) This chapter shall be administered by the secretary of state of Indiana by and through the commissioner, who may exercise all powers granted to the commissioner under IC 23-19.

(b) Subject to the approval of the secretary of state, the commissioner may promulgate regulations necessary to carry out the purposes of this chapter under IC 4-22-2.

(c) Neither the secretary of state, nor the securities commissioner, nor any employee of the securities division, shall be liable in their individual capacity, except to the state of Indiana, for any act done or omitted in connection with the performance of their respective duties under the provisions of this chapter.

As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981, P.L.215, SEC.8; P.L.27-2007, SEC.15.

IC 23-2-3.1-10Cease and desist orders; injunctions; subpoenas; production of books and papers Sec. 10. (a) Whenever it appears to the commissioner that any person has engaged or is about to engage in any act or practice constituting a violation of any provision of this chapter or any regulation or order adopted under this chapter, the commissioner may investigate and issue orders and notices, including ex parte cease and desist orders without notice. In addition to all other remedies, he may bring an action in any circuit or superior court in the name and on behalf of the state of Indiana against any person or persons participating in or about to participate in a violation of this chapter to enjoin those persons from continuing or doing any act in violation of this chapter or to enforce compliance with this chapter. In any court proceedings, the commissioner may apply for and on due showing be entitled to have issued the court's subpoena requiring:

(1) the appearance of any defendant or his employees or agents to testify and give evidence concerning the acts or conduct or things complained of; or

(2) the production of documents, books and records;

as may appear necessary for the hearing of the petition.

(b) Whenever any person has engaged or is about to engage in any act or practice constituting a violation of this chapter or any regulation or order adopted under this chapter, the offeror, target company or any record or beneficial owner of an equity security of the target company may bring an action in the circuit or superior court of the county where the target company has its principal office or Marion County to enjoin that person from continuing or doing any act in violation of this chapter or to enforce compliance with this chapter.

(c) Upon a proper showing, the court may grant a permanent or preliminary injunction or temporary restraining order or may order rescission of any sales, tenders for sale, purchases or tenders for purchase of equity securities determined to be unlawful under this chapter or any regulation or order of the commissioner. The court may not require the commissioner to post a bond.

As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981, P.L.215, SEC.9.

IC 23-2-3.1-11Appeal; notice; transcript; disposition on appeal Sec. 11. An appeal may be taken by any offeror, target company, or other party to any proceeding before the commissioner from any final order of the commissioner to the court of appeals for errors of law under the same terms and conditions as govern appeals in ordinary civil actions, except as otherwise provided in this section. An assignment of errors that the decision, ruling, or order of the commissioner is contrary to law is sufficient to present both the sufficiency of the facts found to sustain the decision, ruling, or order, and the sufficiency of the evidence to sustain the findings of facts upon which it was rendered. Within twenty (20) days from the entry of an order, the commissioner shall be served with a written notice of the appeal which states the grounds upon which a reversal of the final order is sought and with a demand in writing for a certified transcript of the record and of all papers on file in the commissioner's office affecting or relating to that order. The commissioner shall within twenty (20) days after service of the notice of appeal make, certify, and deliver to the appellant the transcript. The appellant shall, within five (5) days after the receipt of the transcript, file the transcript and a copy of the notice of appeal with the clerk of the court. The notice of appeal shall stand as the appellant's assignment of errors. If the order of the commissioner is reversed, the court shall direct the commissioner's further action in the matter, including the making and entering of any order and the conditions, limitations, or restrictions to be contained in the order. However, the commissioner is not barred from later revoking or altering the order for any proper cause which may later accrue or be discovered. If the order is affirmed, the appellant may file a new disclosure statement after thirty (30) days from the ruling of the court of appeals if the disclosure statement is not otherwise barred or limited. The appeal does not suspend the operation of the order appealed from during the pendency of the appeal unless upon proper order of the court.

As added by Acts 1979, P.L.235, SEC.1. Amended by Acts 1981, P.L.215, SEC.10; P.L.3-1989, SEC.138.

IC 23-2-4Chapter 4. Supervision of Continuing Care Contracts

23-2-4-1Definitions 23-2-4-2Application of chapter 23-2-4-3Registration; application; order 23-2-4-4Initial disclosure statement; contents 23-2-4-5Annual disclosure statement; contents; fee 23-2-4-6Disclosure statements; amendment 23-2-4-7Delivery of disclosure statements to persons executing agreements 23-2-4-7.5Termination of contract 23-2-4-8Sanctions against registration of providers or execution of new continuing care agreements; findings of fact; cease and desist order; notice and hearing 23-2-4-9Offense 23-2-4-10Conditions of registration; deposit of entrance and refurbishment fees into escrow account; limitations 23-2-4-11Letter of credit, negotiable securities, or bond instead of escrow account 23-2-4-12Entrance fees; use 23-2-4-13Retirement home guaranty fund; creation and expiration; purpose; levy 23-2-4-14Fund; board of directors; membership; compensation 23-2-4-15Board; submission and approval of plan of operation; contents of plan; adoption of rules 23-2-4-16Termination of bankrupt home; payments to residents from fund; subrogation rights of board 23-2-4-17Fund; examination and regulation by commissioner; reports 23-2-4-18Fund; exemption from certain fees and taxes 23-2-4-19Repealed 23-2-4-20Disclosure statements; liability of provider 23-2-4-21Commissioner; petition for appointment of receiver 23-2-4-22Commissioner; powers; hearings and investigations 23-2-4-23Violations; cease and desist orders; actions for injunctive relief 23-2-4-24Rules