How to Move an LLC to Indiana

There are many reasons why a business owner may want to move an LLC to Indiana. This article discusses the use of domestication, known in some states as LLC conversion, to transfer an LLC to Indiana.

What is Indiana LLC Domestication?

Indiana domestication is a legal procedure that changes a business entity’s state of formation—the state that primarily governs the entity.¹ An out-of-state (or foreign) LLC can use the Indiana LLC domestication process to become an Indiana LLC.² The LLC is still fundamentally the same company after the domestication—except that it is now primarily governed by Indiana LLC law and not the law of the former state.³

An Indiana LLC domestication changes only the company’s state of formation. Indiana recognizes a similar procedure—called a conversion—that changes a business’s entity type.⁴ An Indiana conversion can change an LLC into a corporation—for example—or change a corporation into an LLC.

Some states authorize one conversion procedure that can change an LLC’s entity type or change its state of formation. In those states, an LLC can complete a conversion to become a corporation, partnership, or another entity type. Or, it can complete a conversion to remain an LLC but change the state where the LLC is legally domiciled.

Indiana has a separate procedure for each goal:

• An Indiana LLC conversion always changes the business’s entity type.
• An Indiana LLC domestication changes only the company’s state of formation (its domicile).

Why Transfer an LLC to Indiana?

Moving an existing business to a new state is sometimes a good business decision, and it is sometimes personally convenient for business owners. An LLC owner might want to domesticate an out-of-state business to Indiana for any one or more of the following reasons:

• Legal climate. Domestication to Indiana may make sense if Indiana has legal advantages over the LLC’s current state. Indiana is generally considered a pro-business state, and its LLC law is designed to give owners a high degree of flexibility.⁵ A business could benefit from a move to Indiana if it wants to adopt a more customized ownership or management structure or use the series LLC model.
• Tax savings. Indiana ranks as a top ten state for its business tax climate. Along with low business tax rates, Indiana also offers tax incentives targeted to certain industries and tax credits for research and development. Another Indiana program provides tax credits for existing companies that relocate their headquarters to Indiana. A move to Indiana could also let an LLC avoid being taxed by multiple states if the company ends its connection—or taxable nexus—with its original state.
• Reduced reporting. Indiana LLCs must file reports every two years—not every year like many states. And the filing fee for the Indiana biennial report is only $20.00 if it is e-filed. Indiana’s reduced reporting and fees may save an LLC time and money—especially if the LLC will no longer do business in the original state.
• Owner convenience. It is often more convenient for an LLC owner if the business is domiciled where the owner lives. The consistency avoids the potential confusion involved in dealing with two states’ law. A business formed in the owner’s home state may allow benefit from more convenient relations with state government offices.
• Professional hiring. Most businesses must occasionally hire attorneys, accountants, or other professionals. Laws and regulations in these areas are often state-specific, so a professional needs to be familiar with the right state. An owner who lives in Indiana has easier access to local professionals who know Indiana law. Hiring local professionals in Indiana who are familiar with a different state’s law may be more of a challenge.

What are the Benefits of Indiana LLC Domestication?

An Indiana LLC domestication is the simplest and lowest-cost approach to change an out-of-state business’s legal home state to Indiana. The benefits of domestication compared to alternate ways of moving a business include:

• The LLC’s keeps the same identity. When the domestication becomes effective, the LLC becomes an Indiana LLC, but it is otherwise the same entity as before the domestication.⁶ It still has the same history for tax and administrative purposes, and it can keep the same Employer Identification Number.
• The LLC has the same bank accounts and other assets. Any assets of the out-of-state LLC before domestication are the assets of the Indiana LLC after domestication.⁷ The company keeps its same bank accounts unless the members want to open new accounts.
• Business contracts are still valid and enforceable. The out-of-state LLC’s business contracts from before domestication are not affected by the process. Contracts are still enforceable, and the Indiana LLC has the same contractual rights and obligations after the domestication.⁸ There is no need to negotiate or sign new agreements.
• The LLC’s ordinary business is not disrupted. A business can continue to function as normal during and after domestication. Office locations can stay open, and employees can keep working as usual—with no break in employer-employee relationships.
• The LLC need not register as a foreign LLC. When domestication is complete, the LLC is no longer organized under the former state’s law. The LLC need not apply to the former state for authorization to do business there as a foreign LLC—unless the company actually intends to do business there.

What LLCs can Convert to Indiana LLCs?

The general rule is that an out-of-state LLC can domesticate to Indiana if the LLC’s current state authorizes LLC domestications.⁹ The name domestication is not crucial. The current state may call it conversion. The critical factor is that there is a statutory procedure for an LLC to change its domicile to a new state.

Domestication must also be permissible under the LLC’s articles of organization and operating agreement (or its current state’s equivalent governing documents). The governing documents need not expressly authorize domestication, but they cannot prohibit it. If a governing document disallows domestication, the members will need to go through the proper amendment process before starting a domestication.

An out-of-state LLC should verify that Indiana LLCs can do its kind of business before domesticating. Indiana gives LLCs broad authority to do most business that another entity or individual can do.¹⁰ However, if the company’s business is unlawful in Indiana, an Indiana LLC domestication is unwise.

Professional Services

Some states do not allow LLCs to provide professional services—which are services that only a person with the required license may provide to the public.¹¹ Some states allow an LLC to provide professional services if it forms as a professional limited liability companies (PLLCs). Indiana does not specifically authorize PLLCs, but an Indiana LLC with all required licensed can offer professional services.

An out-of-state LLC or PLLC that provides professional services should ensure it holds any necessary licenses and complies with the licensing authority’s regulations before starting an Indiana domestication.

How Much Does Indiana LLC Domestication Cost?

An LLC that domesticates from another state into Indiana will need to pay the service provider’s labor costs, the filing fees charged by state agencies, and commercial registered agent fees (if applicable).

Labor Costs

A service provider hired to handle an Indiana LLC domestication will charge for the labor involved in the project. Providers may offer a flat rate or bill by the hour. Work needed to manage an LLC domestication includes:

• Review and organization of the necessary information;
• Preparation of domestication documents;
• Communications with business owners’ for revisions and signatures; and
• Filing documents with the Indiana Secretary of State’s Office and the current state’s equivalent office.

The precise service-provider costs needed for a domestication vary according to the provider and the complexity of the domestication.

Filing Fees

An out-of-state LLC domesticating to Indiana must pay filing fees for the domestication documents. The Indiana Secretary of State’s office and the current state’s equivalent will each charge filing fees. Indiana charges total filing fees of $130.00 for an LLC domestication. The amount consists of $100.00 for the Articles of Organization and $30.00 for the Articles of Domestication. ¹² Indiana offers discounted filing fees for electronically filed documents. The discounted total for an e-filed LLC domestication is $95.00 ($75.00 for the Articles of Organization plus $20.00 for the Articles of Domestication).

The domesticating LLC’s filing fees payable to the other state depend on the state where the LLC is currently domiciled. Most states charge lower fees to file domestication documents for an LLC that is moving out of the state than for an LLC domesticating into the state.

Commercial Registered Agent Fees

Any LLC that does business in Indiana must appoint a registered agent with authority to accept service of process on the LLC.¹³ A registered agent can be an individual—including an LLC’s member or manager—or an entity that does business in Indiana.¹⁴

A commercial registered agent is an individual or entity that agrees to act as registered agent for businesses in return for a yearly fee.¹⁵ There are multiple reasons why LLCs choose to hire commercial registered agents. Hiring a commercial registered agent:

• Avoids making public a member or manager’s name, address, and email address;
• Allows for reliable service of legal documents and notices on the LLC;
• Provides a consistent, long-term point of contact for official documents; and
• Lets members and managers avoid the disruption of being served at inconvenient times.

The Indiana Secretary of State keeps a list of authorized commercial registered agents. Commercial registered agent fees are relatively low—typically around $50.00 to $150.00 per year in Indiana—so hiring a commercial registered agent is often worth the cost for Indiana LLCs.

How Long Does Indiana LLC Domestication Take?

The time needed for an Indiana LLC domestication varies according to how long the parties take to finish each step. Factors affecting the turnaround time for a domestication include:

• How long the business owners take to provide information to the document preparer;
• How long the document preparer takes to draft domestication documents;
• How long the business owners take to review and sign documents;
• How long the state agencies take to process the domestication documents.

What Laws Govern Indiana LLC Domestication?

An Indiana LLC domestication must comply with the domestication laws of two states: Indiana and the LLC’s current state. A domestication that observes only one states requirements will not be effective.

Some aspects of a domestication are specifically governed by one state’s rules. Indiana law governs the process and documents filed in Indiana—along with the effective date and legal effects of the domestication to Indiana.¹⁶ The LLC’s current state specifically controls:

• Whether domestication from that state to Indiana is possible;¹⁷
• The contents of the plan of domestication (if the state requires a written plan);
• The approval standard for the plan of domestication;¹⁸ and
• The domestication documents that must be filed in the original state.

What is the Indiana LLC Domestication Process?

The Indiana LLC domestication process consists of two components: document preparation and administrative tasks.

Document Preparation

The Indiana LLC domestication process requires careful preparation of several domestication documents that lay out the details of the LLC’s domestication to Indiana.

• Plan of Domestication. A Plan of Domestication that is designed to comply with the requirements of both Indiana law and the law of the state that the LLC is moving from.
• Indiana Articles of Domestication. The Indiana Articles of Domestication with all information and any related documents needed for filing with the Business Division of the Secretary of State.
• Domestication Document for Filing in Prior State. Depending on state law, this document may be called articles of domestication, statement of domestication, articles of conversion, certificate of conversion, statement of conversion, certificate of conversion, or a similar term.¹⁹
• Indiana Articles of Organization. The Indiana Articles of Organization for filing with the Business Division of the Secretary of State.
• Indiana Operating Agreement. A state-specific Operating Agreement to properly structure the LLC as an Indiana LLC, provide rules for profit distributions and decision-making, clarify the federal income tax classification, and help provide maximum liability protection.
• Resolution Authorizing Domestication. A resolution approving the transaction and adopting the Indiana organizational documents as the LLC’s governing documents.

Administrative Tasks

A domesticating LLC must complete several administrative tasks to implement the domestication. After successfully completing all tasks, the business becomes an Indiana LLC governed by Indiana law.

• Conduct preliminary name search. Check the official records of the Business Division of the Indiana Secretary of State to determine whether the LLC’s name is available in Indiana. (If the name is unavailable, a slight name change may be required to complete the domestication.)
• Obtain signatures on the Articles of Domestication. The Articles of Domestication must be signed by the required parties. The Indiana Secretary of State’s Business Division allows the Articles of Domestication to be e-signed.
• Obtain signatures on the Articles of Organization. The Articles of Organization must be signed by the required parties. The Indiana Secretary of State’s Business Division allows the Articles of Organization to be e-signed.
• File the Articles of Domestication. File the Articles of Domestication with the Indiana Secretary of State’s Business Division. The Business Division allows the Articles of Domestication to be e-filed.
• File the Articles of Organization. File the Articles of Organization with the Indiana Secretary of State’s Business Division. The Business Division allows the Articles of Organization to be e-filed. The Articles of Organization is filed as an attachment with the Articles of Domestication.
• File domestication documents with prior state. File the domestication documents with the Secretary of State or equivalent agency for the state that the LLC is moving from.

What is the Legal Effect of Indiana LLC Conversion?

An Indiana LLC domestication allows an out-of-state LLC to transfer to Indiana with little to no disruption to its day-to-day operations. Indiana’s domestication law lists the following legal effects on the company:

• Governance. When a domestication becomes effective, the LLC becomes an Indiana LLC governed by Indiana law.²⁰ The company’s Indiana Articles of Organization and the new written operating agreement (if created) take effect and are binding on the LLC and its members.²¹ The LLC is otherwise the same entity as before domestication.²²
• Company property. The Indiana LLC still owns and has the same rights in all real estate, personal property, and other assets that the out-of-state LLC owned before domestication. The domestication is not treated as an asset transfer, and deeds and other transfer documents are unnecessary.²³
• Company debts. The Indiana LLC still owes all the same debts and has the same liabilities and obligations that the company had before the domestication.²⁴ The Indiana domestication does not affect any members’ personal liability for the LLC’s obligations—except to the extent a person agrees to assume liability in the plan of domestication.²⁵
• Legal proceedings. Legal cases or administrative proceedings involving the LLC move forward as though there had been no domestication. If the LLC adopted a new name in the domestication process, the new name is substituted for the former name.²⁶
• Ownership interests. When the domestication takes effect, ownership interests in the out-of-state LLC become ownership interests in the Indiana LLC—unless the plan of domestication provides for a different treatment.²⁷
• Continuous existence. The LLC continues to exist as the same entity during and after domestication.²⁸ Domestication does not count as a dissolution of the LLC, and there is no need to wind up affairs. The Indiana domestication does not trigger any third-party rights that take effect in the event of dissolution, winding up, or liquidation—unless the plan of domestication provides otherwise.²⁹

1. Ind. Code § 23-0.6-5-1.
2. Ind. Code § 23-0.6-5-1(b).
3. See Ind. Code, Title 23, Art. 18.
4. Ind. Code § 23-0.6-4-1.
5. See Indiana Business Flexibility Act, Ind. Code §§ 23-18-1-1, et. seq.
6. Ind. Code § 20-0.6-5-6(a)(1)(B).
7. Ind. Code §§ 20-0.6-5-6(a)(2)-(4).
8. Ind. Code §§ 20-0.6-5-6(a)(3)-(4).
9. Ind. Code § 23-0.6-5-1(b).
10. Ind. Code § 23-18-2-1.
11. Ind. Code § 23-1.5-1-11.
12. Ind. Code §§ 23-0.5-9-19; 23.0.5-9-51.
13. Ind. Code §§ 20-0.5-4-1 and 4-10.
14. Ind. Code § 20-0.5-4-3(a).
15. Ind. Code § 20-0.5-4-4.
16. Ind. Code §§ 20-0.6-5-5; 20-0.6-5-6.
17. Ind. Code § 23-0.6-5-1(b).
18. Ind. Code § 20-0.6-5-3(b).
19. Fourteen states use the term articles of domestication to refer to the document that must be filed with the state to approve the domestication: Iowa, Massachusetts, Minnesota, Nebraska, New Hampshire, New Jersey, North Dakota, South Dakota, Utah, Vermont, Virginia, Wisconsin, Wyoming, and Indiana. The corresponding document may be called a statement of domestication (Alaska, Arizona, Connecticut, Idaho, Illinois, Mississippi, and Pennsylvania); articles of conversion (Florida, Nevada, North Carolina, Oregon, and Washington) or certificate of conversion (California, Delaware, Georgia, Michigan, Ohio, and Texas). It may also be called a statement of conversion (Colorado, Maine), certificate of domestication (Kansas), request for conversion (Louisiana), or statement/plan of domestication (District of Columbia).
20. Ind. Code § 20-0.6-5-6(a)(1)(A).
21. Ind. Code §§ 20-0.6-5-6(a)(6)-(7).
22. Ind. Code § 20-0.6-5-6(a)(1)(B).
23. Ind. Code § 20-0.6-5-6(a)(2).
24. Ind. Code § 20-0.6-5-6(a)(3).
25. Ind. Code § 20-0.6-5-6(d).
26. Ind. Code §§ 20-0.6-5-6(a)(5) and (a)(9).
27. Ind. Code § 20-0.6-5-6(a)(8).
28. Ind. Code § 20-0.6-5-6(a)(1)(B).
29. Ind. Code § 20-0.6-5-6(b) and (g).