§ 4-27-1502 — Consequences of transacting business without authority

(a) A foreign corporation transacting business in this state without a certificate of authority may not maintain a proceeding in any court in this state until it obtains a certificate of authority. (b) The successor to a foreign corporation that transacted business in this state without a certificate of authority and the assignee of a cause of action arising out of that business may not maintain a proceeding based on that cause of action in any court in this state until the foreign corporation or its successor obtains a certificate of authority. (c) A court may stay a proceeding commenced by a foreign corporation, its successor, or assignee until it determines whether the foreign corporation or its successor requires a certificate of authority. If it so determines, the court may further stay the proceeding until the foreign corporation or its successor obtains the certificate. (d) (1) (A) A foreign corporation that transacts business in this state without a certificate of authority shall pay a civil penalty to the state for each year and partial year during which it transacts business in this state without a certificate of authority. (B) The penalty shall be the total of all fees imposed by this chapter upon a foreign corporation that properly obtains and renews a certificate of authority and all penalties imposed by this chapter for the failure to obtain or renew a certificate of authority. (2) In addition to the penalty imposed under subdivision (d)(1) of this section, a foreign corporation that transacts business in this state without a certificate of authority shall pay a civil penalty to the state not to exceed five thousand dollars ($5,000) for each year and partial year during which it transacted business without a certificate of authority, beginning with the date it began transacting business in this state and ending on the date it obtains a certificate of authority. (3) (A) The penalties imposed by this subsection may be recovered in a suit brought by the Secretary of State. (B) (i) In addition to any civil penalty, if the court finds that a foreign corporation has transacted business in violation of this chapter, then the court shall issue an injunction restraining the foreign corporation from any further transactions or the exercise of any rights and privileges in this state. (ii) The injunction shall remain in effect until: (a) All civil penalties and any interest and court costs assessed by the court have been paid; and (b) The foreign corporation has complied with the provisions of this subchapter. (e) The failure of a foreign corporation to obtain a certificate of authority does not impair the validity of its corporate acts or prevent it from defending any proceeding in this state.

Legislative History

Acts 1987, No. 958, § 64-1502; 2005, No. 1925, § 1.