2023 Indiana Code › Title 22. Labor and Safety › Article 4. Unemployment Compensation System › Chapter 32. Employer Liability, Rights, and Remedies › 22-4-32-23. Dissolution, Liquidation, or Withdrawal of Corporation; Notification; Clearance

Sec. 23. (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.
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.