FACT PATTERN 1: ORGANIZATION OF A CORPORATION - FOREIGN CORPORATIONS....almost never tested

Question 1

Why do we need to know what a foreign corp is?

Answer 1

Foreign corporations transacting business in this state must qualify and pay prescribed fees.

Question 2

What is a foreign corporation?

Answer 2

A foreign corporation is one incorporated outside this state

Question 3

Is Dunder-Mifflin Paper Co., which is incorporated in Pennsylvania, foreign in CA?

Answer 3

Yes, it is not incorporated in CA

Question 4

What does transacting business mean?

Answer 4

Transacting business means the regular course of intrastate (not interstate) business activity.

Question 5

Does transacting business include occasional or sporadic activity in this state or simply owning property in the state?

Answer 5

No.

Question 6

How does a foreign corporation qualify?

Answer 6

The foreign corporation qualifies by getting a certificate of authority from the Secretary of State. It gives information from its articles and proves good standing in its home state. It must have a registered agent in this state and pay fees too.

Question 7

What happens if a foreign corporation transacts business without qualifying?

Answer 7

Two things: (1) civil fine and (2) cannot sue in this state (but it can be sued and defend).

Question 8

Once the corporation qualifies and pays back fees and fines, can it then sue in the state?

Answer 8

Generally, yes