Single Owner LLC, Analytical comparison between Saudi System and US system.

Citation: John C. Barce; Daniel B. Starr, Single-Owner LLCs: The New Disregarded Entity, 41 Res Gestae 8, 16 (1998) Provided by: <br>SMU Underwood Law Library

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By John C. Barce and Daniel B. Starr1

Single-owner LLCs: the new disregarded entity

On Dec. 17, 1996, theTreasury Department (theTreasury") issued final regulations for classifying business organizations under an elective regime (the "check-the-box regula- tions"). These regulations became effective Jan. 1, 1997. Prior to the adoption of the check-the-box reg- ulations, former Treas. Reg. §301.7701, et seq. governed the classification of entities for federal income tax purposes. The classifica- tion rules determined whether an entity would receive the pass- through tax treatment of a partner- ship or be taxed as a corporation. These classification rules were a regulatory response to the decision of United States v. Kintner,2 and were known as the "Kintner regula- tions." The Kintner court held that an organization possessing more corporate than partnership "char- acteristics" should be classified and taxed for federal-tax purposes as a corporation. Partnership classifica-

tion under the Kintner regulations essentially required that the organi- zation lack at least two of four corporate character- istics.

*i' John C. Barce

Barnes & Thornburg Fort Wayne, Ind.

Daniel B. Starr Barnes & Thornburg

Fort Wayne, Ind.

This system of clas- sification resulted in beneficial tax treatment for individuals who sought the involvement of tax professionals. With a little planning, an organization which looked very much like a corporation could be formed and qualify for partnership tax treat- ment. This result became apparent with the advent and popularity of limited liability companies ("LLCs"). In part because the Kintner reg- ulations elevated form over substance in the classification and tax

treatment of entities, the Internal Revenue Service (the "Service") contemplated formally adopting an elective entity classification regime. As early as April 3, 1995, 3 the Service made public its goal to repeal the Kintner regulations. Proposed regulations were issued by the Treasury on May 17, 1996, and on Dec. 17, 1996 the final check-the-box regulations were published.

Under the check-the-box regu- lations, an entity is either a corpo- ration per se or an "eligible entity."

4

An eligible entity may affirmatively elect either to be classified as an association (and therefore taxed as a corporation) or make no election and either be classified under default rules as a partnership or (if the entity has a single owner) disre- garded as an entity separate from its owner.5 The disregarded entity cre- ated by the check-the-box regula- tions, often referred to as a "tax nothing," 6 appears to be another example of an entity disregarded for federal-tax purposes. Other such entities include certain grantor trusts; qualified REIT subsidiaries; single-owner, title holding compa- nies; and qualified subchapter S subsidiaries.

The consequences of being a tax nothing are not fully described in the regulations. The regulations provide only that "if the entity is disregarded its activities are treated in the same manner as a sole pro- prietorship, branch, or division of the owner." 7 Prior to the check-the- box regulations, the Service refused to rule on the tax classification of single-owner LLCs as partnerships.

8

It would now appear that the Service will attribute all actions and items of significance for tax pur- poses to the tax nothing's owner. This seemingly innocuous regulato- ry provision has already spawned numerous articles advocating uses of the tax nothing to achieve

previously unavailable tax results. 9

Unfortunately, with virtually no authority supporting the uses of a tax nothing, the practitioner must remain wary of the Service's ability to characterize a favorable tax result using tax nothings as an abuse of the tax laws. The Joint Committee on Taxation has already suggested that the Treasury and the Service will closely monitor activity grounded on the classification scheme of the check-the-box regu- lations for such abuses.

In its report on entity classifi- cation and partnership tax issues, the staff of the Joint Committee on Taxation stated that it would be appropriate to consider eliminating electivity or amending the rules where the check-the-box regula- tions are inconsistent with the underlying rationale for any affect- ed present-law rules.10

Perhaps more importantly, it remains unknown whether the Treasury possesses the authority to promulgate regulations which may run counter to existing provisions of the Internal Revenue Code of 1986, as amended (the "Code").1 1

As the Joint Committee observed, the check-the-box regulations may be an attempt to effect a result through regulatory action which may only be achieved through leg- islative action.

Sanctioning of tax nothings under Indiana law

Regardless of the validity of the check-the-box regulations for fed- eral-tax purposes, Indiana law pro- vides that regulations adopted under Code Section 7805(a) and in effect on Jan. 1, 1997 (which include the check-the-box regula- tions) are regarded as rules adopted by the Indiana Department of State Revenue. 12 To reinforce its recogni- tion of the tax nothing, the Indiana legislature recently amended the definition of "taxpayer" to specifi-

8 RES GESTE • JUNE 1998

cally except single-member LLCs disregarded for federal income tax purposes.

13

Indiana's recognition of the tax nothing as disregarded for some state-law purposes may produce unintended results. For example, since the passage of Indiana's Business Flexibility Act, practition- ers have considered the extent to which certain common law corpo- rate doctrines apply to LLCs. The doctrine of "piercing the corporate veil" has not yet been applied in the LLC context to seek recovery from its members. Presumably, this doc- trine may have a corollary to LLCs under which the courts would dis- regard the liability protection ordi- narily afforded LLC members in order to prevent a fraud or injus- tice.

Corporate-veil piercing relies on an analysis of several factors

including: undercapitalization, absence of organizational records, fraudulent representations by shareholders or directors, use of the entity to promote fraud or injus- tice, payment of individual obliga- tions, commingling of the assets and affairs of the organization and its owners, a failure to observe cor- porate formalities, and other acts or conduct ignoring, controlling or manipulating the corporate form.

14

Each of these factors reflect an inappropriate use of the corporate form. Indiana's recent endorsement of the use of tax nothings will undoubtedly create increased use of this type of entity. The increased use of LLCs in general, and tax nothings in particular, will likely bring more pressure to bear on Indiana courts to create a corollary to veil piercing applicable to Indiana's Business Flexibility Act.

Potential uses of a tax nothing

Acquisitive reorganizations

Certain tax-free or partially tax-free transactions among corpo- rations are defined in Section 368 of the Code as reorganizations. The acquisitive reorganizations are

commonly known as "A," "B" and

"C" reorganizations.1 5 By defini- tion, these reorganization provi- sions apply only to corporations. However, with the arrival of the

check-the-box regulations and the disregarding of tax nothings for tax purposes, the tax nothing can assist a "party to the reorganization" to achieve certain results under state law while not altering the tax result of the transaction. Accordingly, an

otherwise valid reorganization

(continued on page 10) '0

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involving a corporation's wholly- owned tax nothing and another corporation should qualify as a reorganization under Code Section 368. That is, if a tax nothing is a party to the reorganization, but dis- regarded as an entity separate from its corporate parent for purposes of Section 368, the parent corporation should be deemed the other party

to the acquisitive reorganization. This use of tax nothings may prove to be a valuable transactional tool.

"A" reorganizations. The "A" reorganization is defined as a statu- tory merger or consolidation. 16

The typical transaction involves the merger, pursuant to state law, of one corporation into a second cor- poration or its subsidiary. For

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334-2555 334-2555 334-2555 232-3657 372-2777 232-3657 372-2777 866-1616 866-1616 736-9882 866-1616 372-2777 736-9882 866-1616 866-1616 232-3657 736-9882 334-2555 372-2777 886-0311 866-1616 372-2777 736-9882 334-2555 232-3657 232-3657 886-0311 886-0311

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example, assume that a tax nothing, S, the wholly-owned LLC of P cor- poration, merges under state law with T corporation. In the merger, T's shareholders receive P stock from S, and S would succeed to all of T's assets by operation of law. Under the check-the-box regula- tions, S should be disregarded for federal-tax purposes and the trans- action could be characterized as a merger of T directly into P. In order to effect this "A" reorganiza- tion, S and T must be capable of merger under the statute of S's domicile. At present, 34 states and the District of Columbia specifically permit mergers between corpora- tions and LLCs.

17

Unfortunately, Indiana has yet to introduce and pass a bill to amend either its Business Corporation Law or Business Flexibility Act to permit such merg- ers. The ability to merge entities in this manner would present a num- ber of distinct advantages over the conventional "A" reorganization. The acquired entity would remain separate for state and federal non- tax law purposes. This would gen- erally mean that the acquired enti- ty's liabilities would remain segre- gated within the organizational confines of the surviving LLC. Despite the separation of liabilities, the parent corporation should be permitted to completely consoli- date financial and tax functions and file only one return. In addition, most inter-company transfers or even a liquidation of the tax noth- ing should not result in the required recognition of income to either the parent or the tax nothing.

To ensure the viable use of a tax nothing in an "A" reorganiza- tion, clarification is needed. Treasury regulations presently state that, in order to qualify as an "A" reorganization, the transaction must be a merger or consolidation effected pursuant to the "corpora-

10 RES GEST_ - JUNE 1998

tion laws of the United States or a State or Territory or the District of Columbia." 18 Many states' corpo- rate statutes contain provisions per- mitting a merger between a corpo- ration and an LLC, which would appear to satisfy this requirement.19 However, at least one commentator has suggested that, because the tax nothing is not a corporation for state-law purposes, the transaction might not qualify as an "A" reorga- nization.2 0 Also troubling is the effect of using a tax nothing to achieve a so-called "reverse triangu- lar merger." In this type of reorga- nization, a corporate parent of a tax nothing would merge the tax noth- ing into a target corporation, with the target surviving the transaction. The tax nothing would transfer its parent's stock to the target (which would flow out to the target share- holders), and the parent's owner- ship interests in the tax nothing would be converted by operation of law into stock of the target. Ordinarily, corporate parties to such a transaction would qualify under the "A" reorganization defin- ition, subject to the additional requirements of Code Section 368(a)(2)(E). However, because the tax nothing is disregarded, the Service may determine that it is actually an "A" reorganization, and not a reverse triangular merger, or the Service could re-characterize the entire transaction as one which does not qualify under any defini- tion of reorganization. There is also some question regarding the effect of a conversion, by operation of law, of ownership interests in an LLC to corporate stock.

"B" and "C" reorganizations. The "B" reorganization is an acqui- sition by one corporation (or its subsidiary) of the stock of a target corporation, solely for all or a part of the acquiror's stock if, immedi- ately after the acquisition, the acquiring corporation holds stock

representing "control" of the target.21 The "C" reorganization is an acquisition by one corporation (or its subsidiary) of substantially all of the assets of a target corpora- tion, solely for all or a part of the acquiror's stock.22 Because the "B" and "C" reorganizations do not involve a state-law merger, the con- cerns addressed above with respect to Indiana entities is not applicable. It would now appear that a tax nothing may act as the conduit for the acquiror's transfer of shares to a target, and receive the stock or assets of the target corporation in a "B" or "C" reorganization, respec- tively.

Consolidated groups vs. groups of tax nothings

Code Section 1501 allows a group of corporations, affiliated through stock ownership with a common parent, to file a consoli- dated return. The consolidated group income tax return results in the computation of a single tax lia- bility for separate entities. Despite the privilege of filing a consolidated income tax return, members of a

consolidated group must account for, and sometimes recognize gain on, intercompany transactions.

2 3

In addition, the consolidated group is subject to the complex require- ments of the investment adjust- ment regulations.

2 4

In contrast, the tax nothing should, in effect, be capable of a consolidated-return result without the additional requirement of com- plying with these regulations. As previously stated, the check-the- box regulations describe the corpo- rate wholly-owned LLC as a branch or division of its corporate owner.

2 5

This characterization of the tax nothing will apparently allow a cor- poration to organize multiple whol- ly-owned LLCs and file only one return.

This method of creating a con- solidated group could eliminate the applicability of the consolidated- return regulations and permit the group to combine items of income, gain, loss, deduction and credit.

26

At the same time, the parent's

(continued on page 13)

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liability should generally be limited to its investment in each respective tax nothing.

A tax nothing may also be used to, in effect, achieve selective con- solidation. Under the consolidated group regulations, the consolidated return includes items of income, gain, deduction, loss and credit for the common parent and each of its subsidiaries. 27 This means that selective consolidation is not an option. Either all subsidiaries are included on the common parent's return or none. However, a corpo- rate parent could use a tax nothing to achieve selective consolidation. For example, assume that a corpo- rate parent owns two subsidiaries and does not file a consolidated return. The parent could convert one of the subsidiaries into a tax nothing and realize the benefits of consolidation with the tax nothing without filing a consolidated return. 28 The second subsidiary should continue to fie a separate return. It remains unclear whether selective consolidation of entities is an intended result of the check-the- box regulations.

Like-kind exchanges under Section 1031

Section 1031 of the Code pro- vides for the non-recognition of gain on the exchange of like-kind property. However, stocks, bonds, notes, interests in a partnership, and other securities are specifically excepted from the application of Section 1031.29 Despite the exclu- sion of interests in partnerships, it now appears that an individual or corporation which owns a tax noth- ing may exchange all of the inter- ests in the tax nothing for other qualifying like-kind property. For example, assume that P, an Indiana corporation, forms several wholly- owned Indiana LLCs (A, B and C). A, B and C do not elect to be taxed as associations, and are therefore tax nothings. C engages in the busi-

ness of real-estate acquisition, own- ership, development and leasing. P would like to assign all its owner- ship interest in C to D, an individ- ual, in exchange for D's developed real estate. Prior to the check-the- box regulations, this exchange would not qualify as a Section 1031 like-kind exchange.

With the advent of the tax nothing, P is deemed to own, for tax purposes, all of the real estate held by C. As a result, it appears that the exchange in this example may be eligible for like-kind- exchange treatment under Code Section 1031. At least one Treasury official has stated that this particu- lar use of a tax nothing should be respected by the Service.

30

Subchapter S corporation shareholder

A "small business corporation" may elect to be taxed in accordance with the provisions of Subchapter S of the Code. For purposes of Subchapter S, a small business cor- poration is limited by the number and character of persons or entities that may be shareholders. 3' Prior to adoption of the check-the-box reg- ulations, an LLC was an ineligible, small-business-corporation share- holder. However, under the check- the-box regulations, it now appears as though a tax nothing may become a shareholder in an S cor- poration if its single owner is itself eligible as an S corporation share- holder. The tax nothing would be ignored and the Service would only examine the eligibility of the single owner. If the single owner is not otherwise ineligible as a sharehold- er, the tax nothing should be able to own shares in the S corporation. This is exactly the analysis the Service adopted in a recently pub- lished, private-letter ruling. 32 The Service held that the ownership of S corporation shares by a single- member LLC neither terminates S elections already made nor affects

the ability of a corporation to quali- fy as an S corporation. Although private-letter rulings possess no precedential value, this ruling appears to be the first instance in which the Service respected the use of tax nothings to achieve previous- ly unavailable tax results.

S corporation shareholders are often concerned with the potential for inadvertent terminations of S corporation status due to the trans- fer of shares to an ineligible share- holder. A common protection against this result is a buy-sell agreement restricting each share- holder's ability to transfer, pledge or assign the shares. Tax-nothing, S corporation shareholders increase the potential for inadvertent termi- nations of S corporation status. If the tax nothing's single owner per- mits another individual or entity to become an owner of the tax noth- ing, it will lose its status as a tax nothing and immediately be classi- fied under the check-the-box regu- lations as a partnership. 33 A part- nership is not an eligible S corpora- tion shareholder, and therefore the S corporation election would termi- nate pursuant to Code Section 1362(d)(2).

Conclusion The tax nothing was an unher-

alded by-product of the check-the- box regulations. Despite these humble beginnings, the tax noth- ing's potential impact may be tremendous. Practitioners should explore the use of tax nothings in structuring business transactions. The Service is actively considering the use of tax nothings in various tax-planning scenarios, and has recognized their use to obtain tax results previously unattainable. Unfortunately, to date, the Service has issued little authoritative guid- ance with respect to the use of tax nothings. Accordingly, practition-

(continued on page 14)

RES GESTk ° JUNE 1998 13

TAX COUNSEL continued from page 13

ers utilizing tax nothings to achieve results previously unattainable should remain cognizant of the risks of such uses and, where appropriate, seek a ruling from the Service. In addition, practitioners must be cautious not to run afoul of the limits established by Indiana courts for respecting investor limited liability in the corporate context.A

1. The authors wish to thank Timothy J. Riffle for his assistance in the preparation of this article.

2. 216 F.2d 418 (9th Cir. 1954).

3. See Notice 95-14, 1995-1 C.B. 297.

4. A business entity that is not classified under the check-the-box regulations as a corporation is by definition an eligible entity. Treas. Reg. §301.7701-3(a).

5. Note that only single-owner LLCs may be disregarded entities. The same treatment is not afforded single-member LLCs. As a practi- cal matter, most single-member LLCs are also single-owner LLCs. However, under Indiana's Business Flexibility Act, a member may assign part of the economic-ownership interest in an LLC without bestowing upon the assignee the status of member. As a result, it is possible for an LLC to have only one member and multiple owners. Ind. Code Ann. §23-18-6-3 (Michie 1997).

6. See Schler, "Initial Thoughts on the Proposed 'Check-the-Box' Regulations," 71 Tax Notes 1679 (June 17, 1996); Miller, "The Tax Nothing," 74 Tax Notes 619 (Feb. 3, 1997); Barton, "Much Ado About a Nothing: The Taxation of Disregarded Entities," 75 Tax Notes 1883 (June 30, 1997); Lipton, "Impact of Final 'Check-the-Box' Regulations Awaits Further IRS Guidance and States' Input," 14 J. Partnership Taxation 91 (Summer 1997).

7. Treas. Reg. §301.7701-2(a).

8. See Rev. Proc. 95-10, 1995-1 C.B. 501, Section 4.01 (providing that the Service would consid- er ruling on LLC classification only if the LLC had at least two members).

9. See Starr, Schmalz, Baucum, Crnkovich, 725 T.M., Limited Liability Companies, at C&A 2-3; Collins, Garrett, Panitch, Sargent, Consolidated Return Planning and Issues Involving Disregarded Entities, 414 PLI/Tax 711; and the articles cited, supra note 4.

10. Joint Committee on Taxation, Review of Selected Entity Classification and Partnership Tax Issues (JCS-6-97), April 8, 1997.

I1. Id. (proposing a legislative authorization for the check-the-box regulations or, in the alternative, a codification of elective entity classification).

12. Ind. Code Ann. §6-3- 1- 11 (b) (Michie 1997).

13. Ind. Code Ann. §6-2.1-1-16 (27) (Michie 1997).

14. Hart v. Steel Producs, Inc., 666 N.E.2d 1270 (Ind.App. 1996).

15. Referring to Sections 368(a)(I)(A), 368(a)(1)(B), and 368(a)(1)(C) of the Code.

16. Code Section 368(a)(1)(A).

17. Ala. Code §10-12-58 (1997); Ariz. Rev. Stat. §10-1108 (1996); Ark. Code Ann. §4-32-1201 (Michie 1997); Cal. Corporations Code §1113 (Deering 1997); Del. Code Ann. tit. 8, §264 (1997); D.C. Code Ann. §29-372.2 (1997); Ga. Code Ann. §14-2-1109 (1997); Haw. Rev. Stat. §415-75.6 (1997); Idaho Code §30-1-1101 (1997); Iowa Code §490A. 1201 (1996); Kan. Stat. Ann. §17-7701 (1996); Ky. Rev. Stat. Ann. §271B.1 1-080 (Michie 1996); La. Rev. Stat. Ann. §12:117 (1997); Md. Code Ann., Corp. and Ass'n, §4A-701 (1997); Mass. Gen. Laws ch. 156B, § 83(A) (1997); Minn. Stat. §302A.601 (1997); Mo. Rev. Stat. §347.710 (1996); Neb. Rev. Stat. §67-248.02 (1997); Nev. Rev. Stat. §92A.100 (1997); N.H. Rev. Stat. Ann. §304-C:18 (1996); N.J. Stat. Ann. §14A:10-14 (1997); N.M. Stat. Ann. §53-19-62 (1997); N.D. Cent. Code §10-19.1-96 (1997); Ohio Rev. Code Ann. §1701.791 (Anderson 1997); Okla. Stat. tit. 18, §2054 (1997); 15 Pa. Cons. Stat. §8956 (1997); R.I. Gen. Laws §7- 16-59 (1996); S.C. Code Ann. §33-44-904 (Law. Co-op. 1997); S.D. Cod. Laws §47-34-38 (Michie 1997); Tenn. Code Ann. §48-21-102 (1997); Vt. Stat. Ann. tit. 11, §3124 (1997); Va. Code Ann. §13.1-722 (Michie 1997); Wash. Rev. Code §25.15.395 (1997); W. Va. Code §31B-9-904 (1997); Wyo. Stat. Ann. §17-15-139 (Michie 1997).

18. Treas. Reg. §1.368-2(b)(1).

19. Seesupra note 17.

20. Washington Items, Single Member LLC Status and Corporate Reorganization Rules, Tax Management Memorandum (April 13, 1998), Vol. 39, No. 8, at 119.

21. Code Section 368(a)(1)(B).

22. Code Section 368(a)(1)(C).

23. Treas. Reg. §1502-13.

24. Treas. Reg. §§ 1502-19 and 1502-32.

25. Treas. Reg. §301.7701-2(a).

26. One advocated use of tax nothings in the consolidated-group context is the perceived ability to plan around the application of the separate-return, limitation-year (SRLY) rules. See Collins, Garrett, Panitch, Sargent, Consolidated Return Planning and Issues Involving Disregarded Entities, 414 PLI/Tax 711,763. Although such an application of tax nothings may be permitted, the SRLY rules or Code Section 382 may nevertheless impose limitations on the ability to use an acquired entity's net operating losses.

27. Treas. Reg. §1.1502-76(b)(1)(i).

28. Such a conversion may be treated as a liquida- tion and trigger the recognition of income to the shareholders.

29. Code Section 1031(a)(2).

30. Speaking to the American Bar Association's Partnerships Committee during the Jan. 10, 1997 ABA Section of Taxation's midyear meet- ing, John J. Rooney, Treasury Associate Tax Legislative Counsel, suggested that use of tax nothings in a 1031 is implied. ("Although it was not stated directly in the regulations, Rooney said he believes it is implied that a sin- gle-member limited liability company would be disregarded in the case of a transaction under Section 1031, but guidance maybe needed to give practitioners comfort on that point."), "Treasury Official Says IRS May Issue Follow-Up Guidance to Check-the-Box," 1997 BNA Daily TaxReport 10, at d7 (Jan. 15, 1997).

31. Code Section 1361(b).

32. Priv. Ltr. Rul. 97-39-014 (June 26, 1997).

33. Assuming that no election is made to be taxed as an association, the default classification of a two-owner LLC under the check-the-box regu- lations is a partnership for federal income tax purposes.

John C. Barce is a partner resident in the Fort Wayne office of Barnes 6 Thornburg, practicing in the firm's Business, Tax & Real Estate Department

in the areas offederal and state taxation,

corporate law, and acquisitions and

mergers.

Daniel B. Starr is an associate in the

Fort Wayne office of Barnes & Thorn- burg, also practicing in the firm's

Business, Tax & Real Estate Department

in the areas of federal and state taxation,

corporate law, and acquisitions and

mergers.

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Supreme Court plans to continue IOLTA start up D espite a ruling last month by

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Indiana became the final state in the United States to adopt an IOLTA rule last fall when it amend- ed the Indiana Rules of Professional Conduct to allow its attorneys to maintain IOLTA accounts.

"We didn't become the last state to adopt an IOLTA rule sim- ply to be the first to bail out. Until persuaded otherwise, the Indiana Supreme Court is going to stand shoulder to shoulder with the rest of the IOLTA nation and continue with its plans to set up IOLTA here," said David J. Remondini, Counsel to Chief Justice of Indiana Randall T. Shepard.

The Indiana IOLTA rule became effective in February of this year. However, the Indiana Bar Foundation, which will operate the program, is still awaiting final approval from the IRS. As of today, there are no IOLTA accounts open in Indiana.

Funds from an IOLTA pro- gram in Indiana are expected to total between $500,000 and $1 mil- lion a year. The Indiana Supreme Court has already determined that the bulk of the funds will go toward a statewide pro bono initiative that will encourage lawyers to donate their time to assist civil litigants of modest means through locally operated pro bono programs.

The U.S. Supreme Court ruled on June 15 in Phillips v. Washington Legal Foundation, No. 96-1578 (Washington Legal Foundation v. Texas Equal Access to Justice Fund, 94 F.3rd 996 (5th Cir. 1996), cert. granted sub nom., 66 U.S.L.W. 3030,

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Dearborn, Floyd, Harrison,

Jefferson, Jennings, Lawrence,

Ohio, Orange, Ripley, Switzerland, Scott and Washington counties are invited to participate.

Panelists for the evening will

include Samuel A. Day and James

E. Bourne, New Albany; and Judge Lloyd Mark Bailey, Court of Appeals of Indiana. The meeting

is sponsored by LEXIS-NEXIS.

RSVP to the Association office at 800/266-2581. Our last town meeting is scheduled for Sept. 3 at the ICLEF Conference Facility

in Indianapolis. A

Attn: attendees of the ABA Annual Meeting in Toronto A reception honoring Chief

justice of Indiana Randall T. Shepard will be held in Toronto on

Saturday, Aug. 1, in the Manitoba Room of the Royal York Hotel from 5:30 to 7 p.m. Chief Justice Shepard assumes the chair of the American Bar Association's Standing Committee on Legal Education and Admission to the Bar during the ABA's Annual Meeting. All Hoosier lawyers are invited to attend. A

Secretary of State Web project update T he Secretary of State's

Technology Enhancement

Project is continuing on schedule

to be available by late summer. Many of the interactions you for-

merly performed with the Secretary of State's Office via walk-in, FedEx, telephone and fax will be available to you electronically via the World Wide Web.

Corporations customers will be able to search the database, print certificates of existence, order

copies, and file annual reports online. UCC customers will be able

to do UCC l's, 3's and l1's online. Searches on debtor and similar

names will be viewable free of charge.

The walk-in and mail-in ser- vice of the Secretary of State's

Office will continue as it exists

today. Those who choose to use the enhanced services over the Internet will pay an enhanced access fee for that information.

(continued on page 16) -O

RES GESTk - JUNE 1998 15

ICLEF CALENDAR Programs are subject to cancellation without notice other than to pre-registrants. Call ICLEF at 317/637-9102 to verify dates and locations. Seatingfor ICLEF Computer Lab Courses is limited to 12, and walk-ins can be accepted on a space-available-only basis. Call ICLEF before attend- ing to verify that space is still available.

July 1998 20-24 Family Mediation Training (LIVE-40 Hours / 24 CLE Hours / 6 Hours

Professional Responsibility Credit) - Fort Wayne

21 Mechanic's Liens & Related Claims (Video-6 CLE Hours / .5 Hours Professional Responsibility Credit) - Fort Wayne

22 Trial Techniques: Advocacy from the Inside Out (LIVE-6 CLE Hours / I Hour Professional Responsibility Credit) - ICLEF Conference Facility

22 Divorce Practice: Issues That Will Trip You Up (Video-6 CLE Hours) - Valparaiso

23 Practical Tax: Individual & Estate Taxation for the Non-Tax Lawyer (LIVE-6 CLE Hours / I Hour Professional Responsibility Credit) - ICLEF Conference Facility

24 Section 1031 Real Estate Exchanges (Video-6.75 CLE Hours) - Crown Point

24 Recent Developments in Long Term Care (Video-3 CLE Hours) - South Bend

27 Basic Bankruptcy Chapters 7 & 13 (Video-6.25 CLE Hours) - ICLEF Conference Facility

28 Juvenile Law Update (LIVE-2 CLE Hours) - ICLEF Conference Facility

28 Recent Developments in Long Term Care (Video-3 CLE Hours) - Evansville

28 Mechanic's Liens & Related Claims (Video-6 CLE Hours / .5 Hours Professional Responsibility Credit) - Kokomo

29 Advanced Family Law (LIVE-6 CLE Hours) - ICLEF Conference Facility

29 The Automobile Injury Case In Indiana (Video-6 CLE Hours) - Valparaiso

30 Trust Account Management (Video-3 CLE Hours / 3 Hours Professional Responsibility Credit) - Fort Wayne

31 Corporate Counsel Forum (Video-6 CLE Hours / 1 Hour Professional Responsibility Credit) - ICLEF Conference Facility

August 1998 5 Ethics for the Family Lawyer (LIVE-3 CLE Hours / 3 Hours Professional

Responsibility Credit) - ICLEF Conference Facility

11 Pension Plan Primer for the Non-ERISA Attorney (LIVE-2 CLE Hours) - ICLEF Conference Facility

20 Family Law (LIVE-3 CLE Hours) - Muncie

20 Risk Management for Attorneys: The Cutting Edge (LIVE-3 CLE Hours / 3 Hours Professional Responsibility Credit) - Fort Wayne

21-22 Sigmund J. Beck Advanced Bankruptcy Roundtable (LIVE-6 CLE Hours) - Columbus

21 Improving Your Presentation Skills (LIVE- No CLE Hours) - ICLEF Conference Facility

26 Planning Your First Real Estate Transaction (LIVE-6 CLE Hours) - ICLEF Conference Facility

26 Child Support Guidelines & Valuing Pensions & Dissolutions (LIVE-3 CLE Hours) - Kokomo

27 Real Estate Transactions & Exchanges (LIVE-2 CLE Hours) - Covington

28-29 Advanced Insurance Law (LIVE-6 CLE Hours / I Hour Professional Responsibility Credit) - Bloomington

16 RES GESTAk • JUNE 1998

NEWS continued from page IS

For more information on the new service - or to set up your account in advance - call Access Indiana Information Network at 317/233-2010 or 800/236-5446. A

Title 34 conversion tables available at State Bar D uring the 1998 legislative ses-

sion the Indiana Civil Procedure Code, Title 34, was recodified. Although no substantive changes were made the Tide has been completely reorganized. The new code cites will be effective July 1. For a copy of the Title 34 conversion tables (old code cite to new code cite and new code cite to old code cite), contact the Indiana State Bar Association at 800/266- 2581 or 317/639-5465. A fee of $5 will be assessed to cover the cost of postage and copying. A

Local rule amended L ocal Rule 39.1 of the Local

Rules of the United States District Court for the Southern District of Indiana was adopted effective June 8, 1998. The amend- ment was adopted as follows:

Each Bankruptcy Judge of this Court is authorized to conduct jury trials in any proceeding to which, under applicable law, the right to a jury trial exits. This designation is made pursuant to 28 U.S.C. §157(e). No such trial shall be held absent the express consent of all the parties. When such a trial is scheduled, the presiding judge may utilize the then-current pool of prospective jurors of the District Court.

Effective June 8, 1998, Local Rule 72.5 of the Local Rules of the U.S. District Court for the Southern District of Indiana was renumbered to 72.4. 6