Starting A New Business in Indiana? See Indiana Startup.com

Indianapolis attorney Brian Powers has a new site, Indiana Startup.com. Emphasizing start ups, he is tilling a field that Indiana needs more work in: high tech and Internet. The following is an example of his blog.

The Basics Ways to Buy or Sell a Business | Mergers and Acquisitions

* Stock Sales. In a stock sale, the buyer purchases the outstanding stock issue by the selling corporation – or in the case of an LLC, the outstanding membership interests. The buyer typically assumes all liabilities of the Seller, unless otherwise agreed by the parties. The Buyer gets a carry-over basis in seller’s assets. Seller’s shareholders will pay taxes on the appreciation in their shares. Sellers will usually prefer stock sales due to the advantageous tax position as well as the assumption of liabilities (creating a clean break for the seller’s shareholders).

* Asset Sales. In an asset sale, the buyer purchases seller’s assets, and assumes only those liabilities that it agrees to assume. Any liabilities not assumed remain the obligation of the Seller. Typically the selling company with distribute the sale proceeds to its shareholders via a dividend. With the exception of a pass through entity, the selling company will pay taxes on the asset sale, and the shareholders will pay taxes on the dividend. The buyer gets a stepped-up basis in seller’s assets. Buyers usually prefer an asset sale to a stock sale.

* Mergers. In a merger, the target company (i.e. the seller) typically merges with and into the buyer company – which survives the merger. This is typically accomplished by the buyer converting the stock owned by seller’s shareholders into the consideration given for the merger

* Tax-Free Reorganizations. Although there are many forms of a tax-free reorganization, the basic concept of a tax-free reorganization is that buyer pays the purchase price by using buyer’s own stock as the consideration, which results in a tax free transaction, except to the exten

For those looking to start a new business in Indiana - bookmark it, subscribe to it.

Online Resource for Indiana Businesses

Indiana's Secretary of State's Business Services Division maintains a web page here that is actually a portal for all things busienss for the Secretary of State's office. Bookmark it.

New Indiana Business Law Blog - Internet Start Ups

I want to point out Brian Powers' Indianapolis Business Law Blog. I just learned about this blog in the past few days. Mr. Powers appears to be taking on a niche that is a bit different for Indiana and more specific than what I do on this blog: Internet start ups.

Give him a look if you are looking at an Internet (and I would think a tech start up).

By the way, for those lawyers reading this - take a look at his blog. Very interesting and a design that is very useful. Ah, so much enjoyable than this blog.

Lauth Bankruptcy Follow Up

A bit of older news from The Indianapolis Star is Judge: Lauth can operate bankrupt subsidiaries. Interesting to see what they paid out in fees before filing bankruptcy. The real question for a Chapter 11 case is will the business survive the process (which ought to explain the caution and care taken with Chrysler and GM).

Judge Basil H. Lorch III ruled it's in the best interest of creditors and others for Lauth management to continue operating its bankrupt subsidiaries, despite a plea from a major lender that Lauth be removed.

The three Lauth subsidiaries that filed for Chapter 11 reorganization bankruptcy May 1 control dozens of Lauth-developed office, industrial and retail properties across the country.

"Many of the developments are only partially completed, and most are in financial distress," said a court filing by LIP Holdings, a Lauth debtor controlled by Inland American Real Estate Trust of Chicago.

***

The case figures to be one of the largest bankruptcies of an Indiana commercial developer.

Inland, acting through LIP Holdings, accused Lauth managers of trying to bail out the distressed properties with collateral from healthier properties from other subsidiaries. That would benefit Lauth executives who've personally guaranteed debts of some of the properties in bankruptcy, LIP charged.

In his ruling, the judge ordered Lauth not to "cross-collateralize" any assets in bankruptcy or issue new debt.

Resop said Lauth's court filings show it paid $100,000 to a Chicago law firm for debt counseling in November, an indication Lauth contemplated filing for bankruptcy long before Inland made its move in April to take control of some Lauth-developed properties.

Bankruptcy - Southern District of Indiana - New Rules

Effective July 13:

http://www.insb.uscourts.gov/WebForms/notices/prodchange.pdf

Also:

There is a new notice posted regarding a revised general order on the use of electronic filing and a new ECF administrative policies and procedures manual.

http://www.insb.uscourts.gov/WebForms/notices/ecfadminnot.pdf

Bankruptcy News

Is there any surprise in any of these headlines?

Bankruptcies surge as recession takes toll comes from the Indianapolis Business Journal's reporting

The number of U.S. businesses and individuals declaring bankruptcy is rising with a vengeance amid the recession, despite a three-year-old federal law that made it much tougher for Americans to escape their debts, an Associated Press analysis found.

"There's no end in sight," said bankruptcy lawyer Bryan Elliott of Hickory, N.C., who is working seven days a week and scheduling prospective clients a month in advance. "To be doing this well and having this much business, it is depressing. It's not a laugh-a-minute job."

Then we have Bankruptcies booming again from The Indianapolis Business Journal's NewsTalk blog:

U.S. Bankruptcy Court for the Southern District of Indiana, which includes Indianapolis, logged 2,936 bankruptcies last month. That was a heady increase from a year earlier and nearly three times the level of 2006, when federal law was changed to make filing more difficult.

Indianapolis bankruptcy attorney Mark Zuckerberg noticed a marked uptick in January. People hoped for a good Christmas, then at the start of the year were hit with bills, bad economic news and other realities.

Most have lost jobs and their health insurance, Zuckerberg says. As a result, a medical problem tips them into bankruptcy.

What Was Proposed for Indiana's New Age Discrimination Law?

Thanks to Masson's Blog - HB 1014 - Age Discrimination

DIGEST OF HB 1014

IC 22-9-1-6


(k) The commission shall state its findings of fact after a hearing and, if the commission finds a person has engaged in an unlawful discriminatory practice, shall cause to be served on this person an order requiring the person to cease and desist from the unlawful discriminatory practice and requiring the person to take further affirmative action as will effectuate the purposes of this chapter, including but not limited to the power:
(A) to restore complainant's losses incurred as a result of discriminatory treatment, as the commission may deem necessary to assure justice; however, this specific provision when applied to orders pertaining to employment shall include only wages, salary, or commissions;
(B) to require the posting of notice setting forth the public policy of Indiana concerning civil rights and respondent's compliance with the policy in places of public accommodations;
(C) to require proof of compliance to be filed by respondent at periodic intervals; and
(D) to require a person who has been found to be in violation of this chapter and who is licensed by a state agency authorized to grant a license to show cause to the licensing agency why his license should not be revoked or suspended.

Indiana Franchising Law - New Bills Dies in General Assembly

So reported The Indianapolis Business Journal in Dealers seek brand security - Auto sellers want refuge from industry fallout, but trio of bills have fallen flat at Statehouse

The bills backed by the Automobile Dealers Association of Indiana would have required automakers to buy back cars and parts when terminating dealers and to pay their rent for up to two years.

One measure would have made it an unfair business practice for an automaker to prohibit a dealer from representing more than one brand of vehicles at a site.

As for whether the language could yet be inserted in other bills still on the roll, “We’re looking,” said State Sen. Randy Head, R-Logansport, who sponsored Senate Bills 497, 447 and 432. He said ADAI lobbyist and former Indiana House Speaker Nelson Becker was trying to work out a deal with manufacturing interests.

IBJ.com - Indianapolis Business Journal - Story Detail

SB 497 would have required automakers that terminate a dealer to buy back new vehicles with fewer than 300 miles on the odometer.

Automakers also would’ve had to buy back parts still in original packages and in some cases repurchase for fair-market value special tools, equipment, required computer systems and software.

The bill would have helped dealers recover facilities costs. Dealers who lease a building from someone other than the automaker would be entitled to the lesser of the amount of rent for the unexpired lease term, or two years’ rent.

Dealers owning the facility would be entitled to an amount equal to the reasonable rental value of the dealership facilities for two years.

Manufacturers, predictably, are less than enthusiastic about such legislation, which also has been introduced in other states, such as Colorado, Maryland, Montana, New Hampshire, Utah, Vermont and Virginia.

The politics between the franchisees (the dealers) and the manufacturers (the franchisors) arouses my curiosity a bit but I think the outcome was dictated by the current economy and the state of the Big Three American automakers. If anyone has any background, it might be good to add it as a comment below.

Remember, if you want more information about retaining me for a case, please give me a call at 765-641-7906.

Indiana and Small Businesses

Just some news and statistics from the SBA (the tables did not come through) but I doubt that the numbers will bear today's reality:

Indiana's 483,848 small businesses provide
economic opportunities to diverse groups of
people and bring innovative products and
services to the marketplace.* This profile from
the Office of Advocacy compiles the latest
facts and figures on the status and role of
small business in the state. (Note that a small
business is defined here as one with fewer
than 500 employees.)
• Indiana had 115,275 small employers in
2006, representing 97.6% of the state’s
employers and 48.6% of its private-sector
employment.
• The manufacturing industry was the state’s
largest small business and overall employer in
2006 (Table 1).
• Small businesses created 38.8% of the state's
net new jobs from 2004 to 2005 (Table 2).
• Indiana's real gross state product increased
by 0.3% in 2007. By comparison, growth in
the Great Lakes regon was 0.5% and the
United States, 2.0%. (Source: U.S. Dept. of
Commerce: Bureau of Economic Analysis)
For Further Information
• Data on all the states and territories is available
at www.sba.gov/advo/research/profiles.
• For other small business data and analysis, visit
www.sba.gov/advo/research, call (202) 205-6533,
or email advocacy@sba.gov.
• To learn about state efforts to adopt or
implement regulatory flexibility, visit
www.sba.gov/advo/laws/law_modeleg.html.
• Visit http://web.sba.gov/list to subscribe to
listservs for Advocacy’s newsletter, press releases,
regulatory news and research reports.
• Visit www.sba.gov/advo/rsslibrary.html for
RSS feeds.
* The number of small businesses is the number of small
employers plus the number of nonemployers in 2006.

Indiana Businesses and Property Tax Appeals

The Indianapolis Business Journal's Appeals pay off for biz owners Over 1 in 4 assessments challenged needs read not only for businesses in Marion County but throughout Indiana.

More than one in four Marion County commercial and industrial property owners has appealed its property tax assessments this year, and the challenges often are paying off in a big way.

With only 11 percent of the 6,503 appeals complete, local officials already have agreed to more than $567 million in reductions. That represents a 43-percent drop from the amounts they were challenging.

An IBJ analysis of the 708 business appeals that have been settled found 123 cases where appeals resulted in decreases of $1 million or more. A handful produced assessment cuts in the tens of millions.

Indiana law Blogs

I ran across a few new - to me - Indiana law blogs that might be of interest here.

First, Harrison & Moberly publishes a blog here. Not a very extensive list of archives, no RSS feed, and it does seem mostly to be a repository of the firm's employment law newsletters.

Second, the Judicial Technology & Automation Committee of the Indiana Supreme Court began publishing the Bits & Bytes Blog. No RSS feed either - which is a bit weird considering who is publishing the blog. Mostly news about e-ticket, the Odyssey case management program and the like.

I found a blog at Bose, McKinney & Evans. No name to it , but it does have an RSS feed and a topical archive. What I found was brief analysis of Indiana appellate court opinions - mostly a quote of the facts and a quote of the key reasoning. Which seems both a bit barren and a good idea at the same time.

Indiana University's Law Journal has a blog, The Indiana Law Journal Supplement, as an adjunct to its regular law review publications. I thought this might be a first until I did a quick Google search and found The MTTLR Blog which has a sidebar of similar blogs. (I am spending very little time nowadays reading law reviews online or visiting their websites). Pretty cool but can anyone explain to me why no RSS feed?

Last of the new ones, although not as new as the preceding ones. I thought I had previously mentioned The Indiana Lawyer's First Impression Blog. I cannot find the post and so I am thinking it must be a figment of my memory. News with archives, comments, and RSS feed makes this more like the common variety of blogs.

Finally, I would like to mention that Kemplaw is publishing again.

November 11 Lecture on Valuing Art in Indianapolis

From The Indiana Lawyer:

The Jordan H. and Joan R. Leibman Annual Forum this month at Indiana University-Purdue University Indianapolis will discuss the valuation of art. The event examines issues related to the legal and business environment of the arts.

John Vanausdall, president and CEO of the Eiteljorg Museum of American Indians and Western Art in Indianapolis, and Debra Force, president and founder of Debra Force Fine Art, will be the featured speakers at the event. Vanausdall joined the Eiteljorg Museum in 1996 after spending 18 years at the Indianapolis Children's Museum. Force's company - formed in 1999 - offers American art and provides appraisal and consulting services. She lectures frequently about American art and has appeared on PBS' Antiques Roadshow.

The event, free and open to the public, is presented by the Indiana University Kelley School of Business - Indianapolis, Herron School of Art & Design, and the IU School of Law - Indianapolis. The lecture begins at 5:30 p.m. Nov. 11 in the Herron School's Frank and Katrina Basile Auditorium, 735 W. New York St., Indianapolis. A reception will immediately follow in the Grand Hall. For more information, contact Shaun Ingram at (317) 278-4789 or slingram@iupui.edu.

A bit off the usual track for this blog but I cannot help but think this could be very interesting.

Court amends public accessibility, other rules

The Indiana Supreme Court has revised its administrative and appellate rules governing how trial courts make records publicly accessible and how appeals are handled in certain cases requiring confidentiality.

An order dated Oct. 6 dictates access to court records and says trial courts may manage access to audio and video recordings of its proceedings to the extent that may be deemed appropriate and not interfering with court operations. Justices reached a decision on the issue late last week during a weekly conference.

***

"This doesn't
attempt to create a formula," Justice Dickson said. "It's basically an
operational call by the clerk, and the clerk is to come up with what
they find appropriate for designations to meet the rule and comply with
statutory obligations."

In the order, the court also amended its
rule regarding court record security and added commentary that includes
examples of what judges can do to ensure recordings aren't altered.

"The
court is required to preserve the integrity of audio and video
recordings of court proceedings," the rule states, adding that options
include supervised playback for listening or copying, creating a copy
of the record for use during playback, and notifying the involved
parties about the accessed record.

Rule revisions take effect Jan. 1, 2009.

The new rules are here (in PDF format).

Follow up on Larry Bird Suit

I wrote about this lawsuit here and it is settled:

Bird settles French Lick lawsuit

Larry Bird has settled a lawsuit against a bed-and-breakfast that operates from his boyhood home in the southern Indiana town of French Lick.

Attorneys for the basketball icon and Legend of French Lick LLC would not discuss the settlement, saying the parties had signed a confidentiality agreement.

The Web site of Legend of French Lick Resort carries a disclaimer saying the resort is "not affiliated with, or endorsed or sponsored by Larry Bird or the Larry Joe Bird Revocable Living Trust." It was not immediately clear whether the disclaimer was used prior to the settlement, which was closed yesterday.

Indiana Court of Appeals Visits Anderson on Thursday

So reports The Indiana Lawyer. Arguments in gambling case Thursday:

"The Indiana Court of Appeals hits the road Thursday to hear arguments at Anderson University in a case involving a compulsive gambler and what duty the casino had to prevent her from gambling.

In Caesars Riverboat Casino LLC v. Genevieve M. Kephart, No. 31A01-0711-CV-530, Caesars Riverboat Casino sued Genevieve Kephart to recover $125,000 after the six counterchecks she wrote to the casino were returned for insufficient funds. Kephart filed a counterclaim alleging the casino knew she suffered from compulsive gambling disorder and owed her a duty to refrain from enticing her to visit the casino."

Checklist - Incorporating the New Business

The following are the steps for incorporating in Indiana. Yes, these are things that a non-lawyer can do but do you really want to? If not, get yourself a lawyer. I am always open to taking on new incorporations through out Indiana.

1. Check the availability of the corporate name with the Secretary of State, Division of Corporations. You cna create all the necessary Indiana government documents online.

2. Prepare the Articles of Incorporation.

3. Mail the original Articles of Incorporation, together with a copy for certification, a letter of transmittal and the appropriate fees, to the Secretary of State, Division of Corporations.

4. Upon receipt of a returned certified copy of the Articles of Incorporation, order a corporate book from an appropriate supplier containing pre-printed forms. Check with a local office supply store.

5. Prepare the By-laws and a Notice or Waiver of Notice and Minutes of Organizational Meeting or Consent to Action Taken in Lieu of Organizational Meeting of Incorporators.

6. Comply with all applicable state laws concerning any fictitious name under which the corporation will conduct its activities.

7. If "S Corporation" status is desired, file an Election by a Small Business Corporation, IRS Form No. 2553, with the Internal Revenue Service. This form can be obtained from the Internal Revenue Service.

8. Apply for and obtain a federal identification number. The EIN number is obtained though the IRS. Check out this publication here.

9. Apply for a state sales tax number, if the corporation will be responsible for collecting state sales tax.

10. Prepare a Stockholders' Agreement if desired.

11. Issue stock certificates to the stockholders of the corporation.

12. Prepare a Waiver of Notice or Notice and Minutes of Annual eeting of Stockholders and Directors.

13. Comply with all state statutes concerning annual meetings of stockholders and directors, filing of annual reports and payment of annual fees by the corporation.

Online Resource for Indiana Businesses: 21st Century Fund - Home

How many business owners know of Indiana's 21st Century Fund? That you do not may say more about the agency than you. If you are looking at starting a high tech business, then you really should check out this agency:

"The Indiana 21st Century Research and Technology Fund was created in 1999 by the General Assembly to stimulate the process of diversifying the State's economy by developing and commercializing advanced technologies in Indiana. The Fund is now an integral element of the Indiana Economic Development Corporation’s Small Business and Entrepreneurship Division."

Another help for businesses from Indiana's government is Ball State University. Ball State?Yes, the teacher's college aggressively pursued high tech and business and has Ball State University - Assisting Businesses:

Assisting businesses supports both our mission of community outreach and our dedication to providing educational programs and projects. Businesses benefit through consulting provided by students and summer internships, while students gain hands-on experience outside of the classroom.

The school has an online form for businesses looking for assistance.

Ball State's business school will probably remain in the shadow of Indiana University's Kelley School of Business. As a BSU alum, I am not sure that is right but I can deal with it. Meanwhile, IU has a page of Entrepreneur Resources:

"How to Start a Company The Johnson Center for Entrepreneurship & Innovation is dedicated to supporting entrepreneurial interests, and to providing information and resources to realize this goal. The online resources listed below are available to those wishing to start up new ventures.

A business plan has three primary functions:

* To determine the viability of a business
* As an instrument for management
* To raise capital

The business plan is both a written summary of your projection for the business and a marketing document intended to attract prospective investors. It should talk about your objectives for the company and how your resources are going to work to assist you in meeting those objectives.

The business plan is extremely vital to each start-up activity and should be maintained and updated on a regular basis. It will aid you in identifying the competitive environment that you will need to operate in for your business to be successful. Furthermore, it will develop your overall ability to manage your business."

I could say that IU is feeling the heat from Muncie but I will not. It really does not matter for the goal of both schools is to help Indiana businesses. I suggest you who are starting a new business or are looking for help with an existing business take them up with their offers to help.

Forms: Indiana State Agency Forms

Courtesy of the Indiana Commission on Public Records (ICPR), there is a partial catalog of state agency forms:

Note: Not all state forms are available on this catalog. Each state form is the property of a specific government agency, and a form is only available online if the agency has requested that it be placed in the catalog.

For questions about specific forms (how to fill out a form, how to find a form that you do not see listed here), you will have to contact the agency which owns that form. The Commission on Public Records only provides a central posting-place for electronic forms, and is unable to answer questions regarding the functions of other agencies. For further information about individual forms, contact the forms coordinator for the agency which owns the form.

Trademarks and Larry Bird

News from The Indiana Daily Lawyer about a new trademark case out of Indiana. Larry Bird sues over use of name and I am hard put to think of another name in this state and especially in French Lick which lead to this kind of lawsuit.

"Bird filed the suit, Larry Bird v. Legend of French Lick LLC, No. 4:08-CV-0070-DFH-WGH, in the U.S. District Court, Southern District of Indiana, New Albany Division Monday against Georgianna Lincoln and Christopher Cooke, who purchased Bird's childhood home in French Lick from the Larry Joe Bird Revocable Living Trust.

The two marketed the property as a bed and breakfast, promoting the house as, 'Legend of French Lick, the Former Home of Larry Bird Resort.' The two also attempted to purchase memorabilia from Bird and wanted to use his name to identify the house; those requests were denied.

The lawsuit seeks to stop Lincoln and Cooke's unauthorized use of Bird's name in violation of federal trademark laws and state publicity laws. Bird has registered his name as a trademark with the U.S. Patent and Trademark Office, according to the suit. The suit also seeks damages for the improper use of his name and for the impoundment and turnover of certain properties the defendants used improperly."

I wish I had a bit more time to dig into this one. I am a bit surprised that the seller did not impose some limitations on the buyers that might have prevented this suit. Does it seem like such a stretch of the imagination to think the buyer of Larry Bird's childhood home would not try to use the home to make money based on that association? Or that the seller would react in this way? I think not.

10/19/2008: Update - the lawsuit settled.

Indiana Business News: State Funds for ESOPs

The Indianapolis Star reports on a new sate program which should encourage employee stock ownership programs here.

Indiana State Treasurer Richard Mourdock on Tuesday announced a $50 million program to help workers set up employee stock ownership programs.

***

Under the state plan, workers can get loans from participating banks to set up ESOPs. The state doesn't guarantee the loans, but encourages banks to participate by buying certificates of deposit at reduced interest rates. In turn, the banks provide loans at reduced rates to Indiana businesses that are setting up ESOP programs.

The initial rates that financial institutions will be charging Indiana businesses through the program will be 4.25 percent.