Can a foreign corporation/entity legally foreclose on a property in a state in which they are not registered to do business?

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Can a foreign corporation/entity legally foreclose on a property in a state in which they are not registered to do business?

Foreign corporation must be registered with the Secretary of State in MA. If they are not can they still legally foreclose on a property? No registered agent.

Asked on July 8, 2011 under Real Estate Law, Massachusetts

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

A little know issue with the foreign corporations and secretary of state is that in many states, corporate entities, sole proprietorships and limited liability companies still conduct business despite lack of registration (think of Internet companies). In many states, the secretary of state will only state the entity is not active or lacks good standing for simply failing to file an annual report but will not actually file orders against the company; other states do have the ability to take action and can revoke licensure of entities, which will ultimately impact the legality of such lawsuits like foreclosure. So this is the first thing you need to find out from your secretary of state. Next, contract law is a funny thing. If the contract is construed such that you voluntarily agreed to subject yourself to the laws of another state, then you pretty much would be at the mercy of those laws. If it is land, it is usually going to be the law of the situs (where the property resides).


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