Indiana Convertible Promissory Note Overview
A convertible promissory note in Indiana is a debt instrument commonly used in startup financing that converts into equity upon a triggering event. As a security, it must comply with both federal regulations (SEC Rule 506 under Regulation D) and Indiana's state securities laws. The primary state exemption is: IC 23-19-2-2 exemption.
Indiana requires Form D filing required when issuing convertible notes. The state provides standard protections for note holders through its securities regulatory framework. The interest rate must comply with Indiana's 21% usury limit, though most convertible note rates (2-8%) fall well below this threshold. Companies should work with an attorney familiar with Indiana securities law to ensure full compliance.
Available
Securities exemption
Required
SOS filing
21%
Usury rate
Standard
Investor protections
Indiana Requirements
Indiana has specific requirements for convertible promissory notes that both parties should understand before entering into the agreement.
- Interest Rate: Must not exceed Indiana's usury limit of 21%
- Written Agreement: Must be in writing and signed by the borrower (maker)
- Clear Terms: Principal amount, interest rate, payment schedule, and maturity date must be clearly stated
- Default Terms: Late fees, grace periods, and acceleration clause must comply with Indiana law
- Governing Law: The note should specify Indiana as the governing jurisdiction
How to Create a Indiana Convertible Promissory Note
Follow these steps to create a Indiana-compliant convertible promissory note using our template.
Enter Party Information
Provide the full legal names and Indiana addresses of both the lender (payee) and borrower (maker). Include the date the note is being executed.
Define Loan Terms
Specify the principal amount, interest rate (within Indiana's 21% usury limit), payment schedule, and maturity date. Our template calculates the payment breakdown automatically.
Set Default and Late Payment Terms
Define the grace period, late fee amount, acceleration clause triggers, and notice requirements. Our Indiana template includes compliant default language.
Sign and Execute
The borrower must sign and date the note. Consider notarization for added legal protection. Both parties should retain a copy. If secured by collateral, file the appropriate security instrument with Indiana's recording office.
Securities Compliance in Indiana
When issuing convertible promissory notes in Indiana, you must comply with the state securities exemption (IC 23-19-2-2 exemption), file the required Form D filing required, ensure the interest rate stays within the 21% usury limit, and follow Indiana's investor protection requirements (standard protections). Federal Form D must be filed with the SEC within 15 days of the first sale. Our Indiana-specific template ensures compliance with both state and federal securities regulations.
Indiana Usury Warning
Indiana's usury limit is 21%. Charging interest above this rate can render your promissory note unenforceable and may subject the lender to penalties under Indiana law. Our template automatically validates your interest rate against Indiana's current limits.
Indiana Convertible Promissory Note FAQ
Answers to common questions about convertible promissory notes in Indiana.
Official Indiana Resources
Use these official resources to verify Indiana requirements for your convertible promissory note.
Other Indiana Promissory Note Types
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Create your Indiana Convertible Promissory Note in under 5 minutes.
Answer a few questions and download a Indiana-compliant document, ready for the state agency.