Foreign Corporations' Capacity to Sue in Iowa

A foreign corporation doing business in this state shall not maintain a proceeding in any court of this state until it is registered to do business in this state. (I.C.A. § 490.1502)

The operative word in that section is "maintain." Iowa case law has interpreted subsection (1) of this statute as allowing a foreign corporation not authorized to do business in this state to commence or instigate a proceeding, but it cannot maintain a proceeding until the corporation complies with the statute by filing its certificate of authority. In effect, the court proceeding is held in abeyance until the corporation is authorized to do business in Iowa by filing the certificate of authority. Inn Operations, Inc. v. River Hills Motor Inn Co., 152 N.W.2d 808, 813 (Iowa 1967).

Inn Operations, Inc. v. River Hills Motor Inn Co., 152 N.W.2d 808, 813 (Iowa 1967) also took this reasoning one step further in acknowledging that the failure to obtain a certificate of authority does not prevent a foreign corporation from defending any action, suit or proceeding in any court in Iowa. Id.