Qualification to Do Business (no ability to cure)

A foreign entity transacting business in this state, except a corporation or other organization formed pursuant to federal law, may not maintain any action, suit, or proceeding in any court of this state until it has registered in this state. The failure of a foreign entity to register in this state does not impair the validity of any contract or act of the foreign entity or prevent the foreign entity from defending any action, suit, or proceeding in any court of this state. A foreign entity, by transacting business in this state without registration, shall be deemed to consent to service of process with respect to causes of action arising out of business transacted in this state, or to service of any notice or demand required or permitted by law, by registered mail addressed to the foreign entity at the office required to be maintained in the state or other jurisdiction where it is organized, or, if not so required, at the principal office of the entity, or by serving the entity by any method permitted under state law. The liability of an owner or owners of a foreign entity is governed by the laws of the state or other jurisdictions where it is organized, and any limitations on that liability are not waived solely by reason of having transacted business in Alabama without registration. (Ala.Code 1975 § 10A-1-7.21)

"Alabama case law is not clear as to what activities of foreign corporations in Alabama will require qualification and what activities do not require qualification. See eg. Stewart Machine & Engineering Co., Inc. v. Checker's Drive-in Restaurants of North America, Inc., 575 So.2d 1072 (Ala. 1991). According to Alabama courts, each case must be decided based on its own particular facts. See e.g. Vines v. Romar Beach, Inc. 670 So.2d 901 (Ala. 1995).

In the case of Allstate Leasing Company v. Scroggins, a Virginia leasing company was held to have transacted business in Alabama by virtue of the fact that it leased equipment to lessees located in Alabama. 541 So.2d 17. The court held:

Even if we concede that no agent of [the leasing company] has ever set foot in Alabama, it is clear that [the leasing company's] business consists of owning equipment and collecting rents thereon.... These pieces of equipment are located in Alabama, on what is intended to be a permanent basis. Alabama citizens, on an ongoing basis, pay rent with respect to that equipment. [The leasing company's] activity in Alabama is not incidental to the sale, installation or servicing of the equipment. Owning that equipment in Alabama and collecting rent from citizens of Alabama are the sum and substance of [the leasing company's] business. Furthermore, this is not an isolated transaction; there have, since 1984, been thirty-one (31) transactions involving about $350,000. Id. at 18.

Although this particular lessor had thirty one leases with equipment in Alabama, the Court explicitly noted that, as a general rule, ""a single act of business' is sufficient to bring a foreign corporation within the purview of 'doing business' in Alabama."" Id."

None.