§ 22-4-32-23 — Dissolution, liquidation, or withdrawal of corporation; notification; clearance

Indiana § 22-4-32-23

• Jurisdiction: Indiana
• Art. 4: UNEMPLOYMENT COMPENSATION SYSTEM
• Ch. 32: Employer Liability, Rights, and Remedies

Text

(a) As used in this section:
(1) "Dissolution" refers to dissolution of a corporation under IC 23-0.5-6, IC 23-1-45, IC 23-1-47, or IC 23-1-48, or dissolution
under Indiana law of an association, a joint venture, an estate, a
partnership, a limited liability partnership, a limited liability
company, a joint stock company, or an insurance company
(referred to as a "noncorporate entity" in this section).
(2) "Liquidation" means the operation or act of winding up a
corporation's or entity's affairs, when normal business activities
have ceased, by settling its debts and realizing upon and
distributing its assets.
(3) "Withdrawal" refers to the withdrawal of a foreign corporation
from Indiana under IC 23-0.5-5-7.
(b) The officers and directors of a corporation effecting dissolution,
liquidation, or withdrawal or the appropriate individuals of a
noncorporate entity shall do the following:
(1) File all necessary documents with the department in a timely
manner as required by this article.
(2) Make all payments of contributions to the department in a
timely manner as required by this article.
(3) File with the department a notification within thirty (30) days
of the adoption of a resolution or plan in the form and manner
prescribed by the department. The notification may require
information concerning:
(A) the corporation's or noncorporate entity's assets;
(B) the corporation's or noncorporate entity's liabilities;
(C) details of the plan or resolution;
(D) the names and addresses of corporate officers, directors,
and shareholders or the noncorporate entity's owners, members,
or trustees;
(E) a copy of the minutes of the shareholders' meeting or the
noncorporate entity's meeting at which the plan or resolution
was formally adopted; and
(F) such other information as the department may require.
The commissioner may accept, in lieu of the department's
prescribed notification, a copy of Form 966 that the corporation
filed with the Internal Revenue Service.
(c) Unless a clearance is issued under subsection (g), for a period of
one (1) year following the filing of the notification with the department,
the corporate officers and directors of a corporation and the chief
executive of a noncorporate entity remain personally liable, subject to
IC 23-1-35-1(e), for any acts or omissions that result in the distribution
of corporate or noncorporate entity assets in violation of the interests
of the state. An officer or director of a corporation or a chief executive
of a noncorporate entity held liable for an unlawful distribution under
this subsection is entitled to contribution:
(1) from every other director who voted for or assented to the
distribution, subject to IC 23-1-35-1(e); and
(2) from each shareholder, owner, member, or trustee for the
amount the shareholder, owner, member, or trustee accepted.
(d) The corporation's officers' and directors' and the noncorporate
entity's chief executive's personal liability includes all contributions,
penalties, interest, and fees associated with the collection of the
liability due the department. In addition to the penalties provided
elsewhere in this article, a penalty of up to thirty percent (30%) of the
unpaid contributions may be imposed on the corporate officers and
directors and the noncorporate entity's chief executive for failure to
take reasonable steps to set aside corporate assets to meet the liability
due the department.
(e) If the department fails to begin a collection action against a
corporate officer or director or a noncorporate entity's chief executive
within one (1) year after the filing of a notification with the department,
the personal liability of the corporate officer or director or noncorporate
entity's chief executive expires. The filing of a substantially blank
notification or a notification containing misrepresentation of material
facts does not constitute filing a notification for the purpose of
determining the period of personal liability of the officers and directors
of the corporation or the chief executive of the noncorporate entity.
(f) In addition to the remedies contained in this section, the
department is entitled to pursue corporate assets that have been
distributed to shareholders or noncorporate entity assets that have been
distributed to owners, members, or beneficiaries, in violation of the
interests of the state. The election to pursue one (1) remedy does not
foreclose the state's option to pursue other legal remedies.
(g) The department may issue a clearance to a corporation or
noncorporate entity effecting dissolution, liquidation, or withdrawal if:
(1) the:
(A) officers and directors of the corporation have; or
(B) chief executive of the noncorporate entity has;
met the requirements of subsection (b); and
(2) request for the clearance is made in the form and manner
prescribed by the department by the officers and directors of the
corporation or chief executive of the noncorporate entity within
thirty (30) days after the filing of the notification with the
department.
(h) The issuance of a clearance by the department under subsection
(g) releases the officers and directors of a corporation and the chief
executive of a noncorporate entity from personal liability under this
section.

Legislative History

As added by P.L.107-1987, SEC.2. Amended by P.L.21-1995, SEC.127; P.L.290-2001, SEC.31; P.L.1-2002, SEC.93; P.L.175-2009, SEC.43; P.L.42-2011, SEC.46; P.L.171-2016, SEC.45; P.L.118-2017, SEC.4; P.L.122-2019, SEC.46.