Foreign Corporations

TITLE 13-C

§1501. Authority to transact business required

       1. Application for authority. A foreign corporation may not transact business in this State until the foreign corporation files an application for authority to transact business with the Secretary of State.

       2. Transacting business. Activities that do not constitute transacting business within the meaning of subsection 1 include but are not limited to:

           A. Maintaining, defending or settling any proceeding;

           B. Holding meetings of the board of directors or shareholders or carrying on other activities concerning internal corporate affairs;

           C. Maintaining bank accounts;

           D. Maintaining offices or agencies for the transfer, exchange and registration of the corporation's own securities or maintaining trustees or depositories with respect to those securities;

           E. Selling through independent contractors;

           F. Soliciting or obtaining orders, whether by mail or through employees or agents or otherwise, if the orders require acceptance outside this State before they become contracts;

           G. Creating or acquiring indebtedness, mortgages and security interests in real or personal property;

            I. Owning, without more, real or personal property other than agricultural real estate;

            J. Conducting an isolated transaction that is completed within 30 days and that is not one in the course of repeated transactions of a like nature;

            K. Transacting business in interstate commerce;

            L. Engaging as a trustee in those actions defined by Title 18-A, section 7-105 as not in themselves requiring local qualification of a foreign corporate trustee; or

            M. Owning and controlling a subsidiary corporation incorporated in or transacting business within this State.

§1502. Consequences of transacting business without authority

       1. No court proceeding. A foreign corporation transacting business in this State without authority may not maintain a proceeding in any court in this State until it files an application for authority and pays the applicable filing fee.

       2. Successor; assignee of cause of action. The successor to a foreign corporation that transacted business in this State without 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 files an application for authority.

       3. Stay proceeding. A court may stay a proceeding commenced by a foreign corporation, its successor or assignee until the court determines whether the foreign corporation or its successor requires authorization. If the court so determines, the court may further stay the proceeding until the foreign corporation or its successor files an application for authority.

       4. Civil penalty. A foreign corporation is liable for a civil penalty of $500 for each year, or portion thereof, it transacts business in this State without authority. The Attorney General may collect all penalties due under this subsection.

       5. Validity of corporate acts. Notwithstanding subsections 1 and 2, the failure of a foreign corporation to file an application for authority does not impair the validity of its corporate acts, including contracts, or prevent it from defending any proceeding in this State.