Setting Up a Manufacturing Relationship in Indiana (2026)
Reviewed by DocDraft Legal Team · Indiana · Last updated 2026-05-18
Setting up a new manufacturing or supply relationship in Indiana means working within Indiana's codification of UCC Article 2, the state's sales/use tax regime, and the state's trade-secret rules. Indiana's UCC Article 2 codification is Ind. Code § 26-1-2-101 et seq. Sales-tax registration runs through Indiana Department of Revenue. Indiana has adopted the UTSA, which governs trade-secret claims in the manufacturing relationship.
Key Considerations
Drafting a choice-of-law clause for a Indiana-connected manufacturing deal requires reading the state's rule: IC 26-1-1-301 A manufacturer organized outside Indiana but doing business inside it must qualify as a foreign entity with the Indiana Secretary of State.
Manufacturing supply agreements in Indiana fall under the state's UCC Article 2, codified inside the Indiana Uniform Commercial Code at Ind. Code § 26-1-2-101 et seq. In Indiana, UCC Article 2 sale-of-goods provisions are part of the state's Indiana Uniform Commercial Code, located at Ind. Code § 26-1-2-101 et seq. Under Indiana's UCC Article 2, a sale-of-goods action carries a four-year limitations period from accrual.
Indiana's mechanic's or materialmen's lien statute is the recovery backstop for unpaid manufacturers and suppliers: Indiana Code Title 32, Article 28, Chapter 3 Indiana's UTSA codification supplies the substantive definitions and remedies for trade-secret misappropriation in the supply context.
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Relevant Documents
In Indiana, the manufacturing supply contract should cite Ind. Code § 26-1-2-101 et seq. for UCC Article 2 (or, if Indiana is the holdout, the Indiana civil-code sale provisions). Register for sales tax with Indiana Department of Revenue. Foreign qualification with the Secretary of State is required if the manufacturer is organized outside the state.
Intellectual Property Assignment Agreement
Ensures that any intellectual property created during the manufacturing process belongs to you rather than the manufacturer. This is particularly important if the manufacturer will be developing custom processes or designs.
Manufacturing Agreement
This is the primary contract that governs the relationship between you and the manufacturer. It outlines the terms of the manufacturing arrangement, including production specifications, quality standards, delivery schedules, pricing, payment terms, and duration of the relationship.
Non-Disclosure Agreement
Protects your confidential information, trade secrets, and intellectual property that you may need to share with the manufacturer during the course of your relationship. This should be signed before detailed discussions begin.
Quality Control Agreement
Specifies the quality standards, testing procedures, and acceptance criteria for the manufactured products. This document helps ensure that the manufacturer meets your quality requirements.
Supply Chain Agreement
Outlines the logistics of the manufacturing relationship, including raw material sourcing, inventory management, shipping arrangements, and delivery schedules.
Termination and Transition Agreement
Outlines the procedures and responsibilities in case the manufacturing relationship ends, including return of materials, transfer of production to another manufacturer, and handling of remaining inventory.
Tooling Agreement
Addresses ownership, maintenance, and usage rights for any specialized tools, molds, or equipment created or purchased specifically for manufacturing your products.
Relevant Laws
Indiana Uniform Commercial Code (UCC)
The UCC governs commercial transactions in Indiana, including manufacturing relationships. It provides rules for contracts, sales, warranties, and remedies that will apply to your manufacturing agreement. Understanding these provisions is essential when drafting contracts with manufacturers.
Indiana Trade Secrets Act
When establishing a manufacturing relationship, you'll likely share proprietary information. This law protects confidential business information that provides a competitive advantage. Ensure your manufacturing agreements include proper confidentiality provisions aligned with this law.
Indiana Product Liability Act
This law determines liability for defective products manufactured in Indiana. It's crucial to understand how liability is allocated between you and your manufacturer, and to address indemnification in your manufacturing agreement.
Indiana Environmental Management Laws
Manufacturing operations in Indiana must comply with state environmental regulations. Your agreement should address compliance responsibilities and liability for environmental issues that may arise from the manufacturing process.
Indiana Business Corporation Law
If you're forming a business entity in Indiana to engage in manufacturing relationships, this law governs corporate formation and operations. Understanding entity structure is important for liability protection and tax considerations.
Regional Variances
Northern Indiana
Lake County has additional environmental compliance requirements for manufacturing operations due to its proximity to Lake Michigan. Manufacturers must comply with stricter wastewater discharge regulations and may need to obtain special permits from the Northwest Indiana Regional Planning Commission.
South Bend offers specific tax incentives for manufacturing businesses that create a minimum of 25 new jobs. The city also has a streamlined permitting process through its Economic Development Corporation for manufacturers in designated industrial zones.
Central Indiana
Indianapolis has established Manufacturing Revitalization Zones with special tax abatements and reduced regulatory requirements. Manufacturers must register with the Indy Chamber's Regulatory Assistance Program to access these benefits. The city also has specific noise ordinances that affect manufacturing operations in areas adjacent to residential zones.
Hamilton County requires additional traffic impact studies for new manufacturing facilities that expect more than 50 employee vehicles or 10 commercial vehicles daily. The county also offers expedited permitting for manufacturers implementing green technology or sustainable practices.
Southern Indiana
Evansville has specialized zoning requirements for manufacturing operations near the Ohio River. Manufacturers must comply with additional flood prevention measures and may need to contribute to the city's infrastructure improvement fund based on facility size and expected water usage.
Clark County, part of the Louisville metropolitan area, offers unique cross-border incentives for manufacturers who source materials or distribute products in Kentucky. The River Ridge Commerce Center in Clark County also provides special regulatory assistance for manufacturers in this designated economic development zone.
Suggested Compliance Checklist
Anchor the supply contract to UCC Article 2 as enacted in Indiana
Before signing days after startingIn Indiana, UCC Article 2 sale-of-goods provisions are part of the state's Indiana Uniform Commercial Code, located at Ind. Code § 26-1-2-101 et seq. Use Ind. Code § 26-1-2-101 et seq as the controlling state citation.
Open a Indiana sales-tax registration before goods ship
Before goods ship days after startingRegistration runs through Indiana Department of Revenue.
Out-of-state manufacturers should foreign-qualify in Indiana before the supply relationship goes live
Before operations begin days after startingA manufacturer organized outside Indiana but doing business inside it must qualify as a foreign entity with the Indiana Secretary of State.
Use Indiana's UTSA codification as the substantive trade-secret backstop
During drafting days after startingRequire an NDA plus internal access controls so the state remedies are not defeated by lax handling.
Pick governing law and forum with the Indiana-specific enforceability rule in front of you
Before relying on lien rights days after startingIC 26-1-1-301
Preserve mechanic's or supplier's lien rights under Indiana's lien statute
Ongoing days after startingThe citation is in Indiana Code Title 32, Article 28, Chapter 3.
| Task | Description | Document | Days after starting |
|---|---|---|---|
| Anchor the supply contract to UCC Article 2 as enacted in Indiana | In Indiana, UCC Article 2 sale-of-goods provisions are part of the state's Indiana Uniform Commercial Code, located at Ind. Code § 26-1-2-101 et seq. Use Ind. Code § 26-1-2-101 et seq as the controlling state citation. | - | Before signing |
| Open a Indiana sales-tax registration before goods ship | Registration runs through Indiana Department of Revenue. | - | Before goods ship |
| Out-of-state manufacturers should foreign-qualify in Indiana before the supply relationship goes live | A manufacturer organized outside Indiana but doing business inside it must qualify as a foreign entity with the Indiana Secretary of State. | - | Before operations begin |
| Use Indiana's UTSA codification as the substantive trade-secret backstop | Require an NDA plus internal access controls so the state remedies are not defeated by lax handling. | - | During drafting |
| Pick governing law and forum with the Indiana-specific enforceability rule in front of you | IC 26-1-1-301 | - | Before relying on lien rights |
| Preserve mechanic's or supplier's lien rights under Indiana's lien statute | The citation is in Indiana Code Title 32, Article 28, Chapter 3. | - | Ongoing |
Frequently Asked Questions
A manufacturer organized outside Indiana but doing business inside it must qualify as a foreign entity with the Indiana Secretary of State.
Under Indiana's UCC Article 2, a sale-of-goods action carries a four-year limitations period from accrual.
Indiana's UTSA codification supplies the substantive definitions and remedies for trade-secret misappropriation in the supply context.