Foreign Corporations Capacity to Sue in North Carolina

"A foreign corporation may not transact business in this State until it obtains a certificate of authority from the Secretary of State with limited exceptions. Certain specified activities do not constitute transacting business in the state. N.C. Gen. Stat. § 55-15-01

A foreign corporation that does not obtain a certificate of authority is liable to the State for all fees and taxes which would have been imposed by law upon such corporation had it applied for and received such permission, plus interest and all penalties imposed by law.

Failure to obtain a certificate of authority precludes a corporation from maintaining any action or proceeding in any court in the State unless they obtain the certificate before trial. N.C. Gen. Stat. § 55-15-02 "

The statute specifically provides: “An issue under this subsection must be raised by motion and determined by the trial judge prior to trial.” N.C. Gen. Stat. § 55-15-02 (2012). Thus, a debtor failing to raise the issue prior to trial cannot raise the issue by post-trial motion. See Spivey & Self, Inc. v. Highview Farms, Inc., 110 N.C. App. 719 (1993). In Leasecomm Corp. v. Renaissance Auto Care, Inc., 122 N.C. App. 119 (1996), the North Carolina Court of Appeals held that under the old version of N.C. Gen. Stat § 55-15-02 an assignee of a note from a corporation that failed to obtain a certificate of authority could not bring suit on the assigned note, even though the assignee was duly registered, because the assignor of the note was an out of state corporation which had not obtained a certificate of authority in North Carolina. Though Leasecomm has not been expressly overruled by the courts in North Carolina, the Legislature, in amending the section, failed to include new § 55-15-02(b), which provides the assignment provision. Thus the statutory basis for the decision no longer exists. However, please see Lender’s Licenses for another potential trap for the assignee. A recent North Carolina Court of Appeals decision held that for the purposes of determining proper venue, TD Bank, N.A., a National Association organized and existing under the National Bank Act, was considered a foreign corporation, not a resident of the State of North Carolina. TD Bank, N.A. v. Crown Leasing Partners, LLC, 2012 N.C. App. LEXIS 1471 (N.C. Ct. App. Dec. 31, 2012). The Court went on to find that since TD Bank initiated the action against the defendants, as opposed to TD Bank being sued, the following rule applies: “[I]n a civil action in this state where venue is not specifically designated by N.C. Gen. Stat. §§ 1-76 through 1-81, where the plaintiff is a nonresident and the defendants are residents, the proper venue for the action pursuant to N.C. Gen. Stat. § 1-82 is any county in which defendants reside at the commencement of the action.” Stewart v. Southeastern Reg’l Med. Ctr., 142 N.C. App. 456, 460-61, 543 S.E.2d 517, disc. review denied, 353 N.C. 733, 552 S.E.2d 169, (2001).