Indiana House Bill 1593: Fraud Prevention

Update on Bill Actions

• HB 1593 was passed by the House of Representatives on February 17, 2025.  It was referred to the Senate and assigned to the Judiciary Committee on March 3, 2025.
• On March 13, the bill was reported out of the Senate Judiciary Committee, do pass, with no further revisions.

The Bill

Indiana House Bill 1593, currently pending in the 2025 General Assembly, amends several parts of the Indiana’s version of the Uniform Business Organizations Code, Ind. Code art. 23-0.5. The bill’s title, Fraud Prevention, both overstates and understates its substance. It overstates the bill’s scope in that the fraud prevention measures are relatively narrow and relate only to documents filed with the Indiana Secretary of State by entities such as business corporations, nonprofit corporations, and limited liability companies. It understates the bill’s scope in that it includes some amendments and new provisions that are, at best, remotely relevant to preventing fraud.

Identify Verification Related to Biannual Business Entity Reports

HR 1593 has two similar provisions (in new subsections to IC 23-0.5-2-1 and -13) that are clearly intended to prevent fraud, each of which requires a person submitting a biannual business entity report to the Secretary of State on behalf of another person to take reasonable steps to verify the identity of the person on whose behalf the document is submitted. Reasonable steps may include manual verification, background checks, or collecting copies of a driver’s license, passport, or other identifying documents.

The Use of Virtual Addresses in Lieu of a Principal Office

Some documents filed with the Secretary of State require the entity – a corporation, LLC, etc. – to list a principal office. The Uniform Business Organizations Code currently defines a principal office as the entity’s principal executive office, whether in Indiana or elsewhere. HB 1593 would amend the definition of principal office so that it generally means an entity’s “usual place of business, headquarters, or other office at which a governing person is commonly present.” The statute already defines “governing person” as, among others: (1) a director of a business corporation; (2) a director or trustee of a nonprofit corporation; (3) a member of a limited liability company (LLC) that is managed by its members; or (4) a manager of an LLC that is managed by one or more managers.

However, HB 1593 permits the use of a “contact address” (a new defined term) in lieu of the address of a principal office if the entity conducts business entirely by telecommunications and has no physical office other than a residence and if the entity also discloses an email address related to the entity. A “contact address” can be the residential address of a governing person or an address provided by a commercial mail receiving agency.

“Commercial mail receiving agency” (or “CMRA”) is not defined by the current statute or by HB 1593 but rather by regulations of the United States Postal Service. A CMRA is a private business that receives mail from the U.S. Postal Service on behalf of customers. Each customer of the CMRA is given a unique address, sometimes called a virtual address. In its most basic form, the CMRA places the customer’s mail in a private mailbox from which the customer retrieves it. Most CMRAs offer other services, such as forwarding the customer’s mail to another address.

HB 1593 contains a new chapter IC 23-0.5-2.5 that will, if it passes, establish a requirement for CMRAs to register with the Secretary of State and provisions for using a CMRA address in lieu of a principal office in documents filed with the Secretary. Anyone operating a CMRA in Indiana must file a listing statement which includes some basic information, including contact information for the CMRA and the person operating it. The listing statement is in addition to PS Form 1583-A that must be filed with the USPS.

Postal regulations require customers of CMRAs to complete PS Form 1583, which includes information about the customer and the person who is authorized to accept mail from the CMRA on behalf of the customer. HB 1593 also requires the person operating the CMRA to follow “the service agreement process” to be established by the Secretary of State.  The bill does not define “service agreement process,” but it is apparent from the context that it means a process by which the CMRA creates a virtual address for a customer. Customers of CMRAs must complete PS Form 1583, which requires the customer to disclose information about the customer and the person who is authorized to accept mail from the CMRA on behalf of the customer.

HR 1593 also requires the person operating CMRA to notify the Secretary of State whenever it has reason to believe that a customer is using the CMRA address as a contact address. Moreover, any person who uses a CMRA address in any filing with the Secretary of State must disclose the person’s email address and information about the CMRA’s customer, including names, addresses, and contact information.

Reinstatement of Entities Administratively Dissolved Longer Than Five Years

LLCs, corporations, and other entities are required to file business entity reports with the Indiana Secretary of State and pay a modest filing fee every two years. Failure to do so can lead to administrative dissolution by the Secretary. The current statute permits an entity to apply for reinstatement within five years of dissolution. If the entity pays all the delinquent filing fees and satisfies other requirements, the Secretary of State must reinstate the entity. The result is that the entity is returned to good standing as if it were never dissolved.

HR 1593 contains a new provision at IC 23-0.5-6-3(e) that would permit the reinstatement of entities that have been administratively dissolved more than five years. With one exception discussed below, the requirements for reinstatement are the same regardless of how long the entity has been dissolved. The distinction is that reinstatement after five years is discretionary, not mandatory. The bill contains nothing to assist the Secretary of State in exercising that discretion. Maybe reinstatement will be granted freely, or maybe the Secretary of State will write policies or procedures to guide the exercise of that discretion.

The procedures for reinstatement of an entity dissolved for more than five years include provisions to verify the identity of a governing person of the dissolved entity, similar to the provisions requiring identity verification related to biannual business entity reports.

If you have questions about Indiana House Bill 1593 or need assistance with Secretary of State filings, the team at Harshman Ponist Smith & Rayl is here to help. Our experienced attorneys can provide you with the guidance and support you need to navigate the complexities of this important legislation.