Transacting Business Without Certificate of Authority

1. Law
2. Georgia Code
3. Corporations, Partnerships, and Associations
4. Nonprofit Corporations
5. Foreign Corporations
6. Certificate of Authority
7. Transacting Business Without Certificate of Authority

1. 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.
2. 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 unless before the commencement of the proceeding the foreign corporation or its successor obtains a certificate of authority.
3. Notwithstanding subsections (a) and (b) of this Code section, 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.

(Code 1981, §14-3-1502, enacted by Ga. L. 1991, p. 465, § 1.)

Law reviews.

- For article, "Foreign Corporations in Georgia," see 10 Ga. St. B. J. 243 (1973).

COMMENT

This section differs from its Business Code counterpart in that it does not provide for a monetary penalty for a corporation's failure to obtain a certificate of authority.

JUDICIAL DECISIONS

Editor's notes.

- In light of the similarity of the statutory provisions, annotations decided under former Code 1933, § 22-1421 are included in the annotations for this Code section.

Inapplicable to federal courts.

- O.C.G.A. § 14-3-1502 does not apply to federal courts in the State of Georgia when exercising federal question jurisdiction and, therefore, did not prevent a consumer organization with members in the state from challenging the validity of a senatorial run-off election, even though the organization had not obtained a certificate of authority. Public Citizen, Inc. v. Miller, 813 F. Supp. 821 (N.D. Ga.), aff'd, 992 F.2d 1548 (11th Cir. 1993).

Unqualified foreign corporation may become third-party defendant.

- An unqualified foreign corporation has the right despite absence of legal service to file its defensive pleadings on its own initiative and become a third-party defendant without penalty. American Photocopy Equip. Co. v. Lew Deadmore & Assocs., 127 Ga. App. 207, 193 S.E.2d 275 (1972) (decided under former Code 1933, § 22-1421).

RESEARCH REFERENCES

Am. Jur. 2d.

- 36 Am. Jur. 2d, Foreign Corporations, § 225 et seq.

C.J.S.

- 19 C.J.S., Corporations, §§ 1004, 1005, 1006.

ALR.

- Right of foreign corporation or its assignee to maintain an action in federal court which it could not have maintained in state court because of noncompliance with conditions of doing business in state, 133 A.L.R. 1171.

Rule that in general inhibits foreign corporation which has failed to comply with conditions of doing or continuing business in state, or domestic corporation which has forfeited its charter, from maintaining action, as applicable to action at law to vindicate corporation's property rights against tort-feasor, 136 A.L.R. 1160.

Effect of execution of foreign corporation's contract which, while executory, was unenforceable because of noncompliance with conditions of doing business in state, 7 A.L.R.2d 256.

Compliance after commencement of action as affecting application of statute denying access to courts or invalidating contracts where corporation fails to comply with regulatory statute, 6 A.L.R.3d 326.

Application of statute denying access to courts or invalidating contracts where corporation fails to comply with regulatory statute as affected by compliance after commencement of action, 23 A.L.R.5th 744.

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