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New York Foreign Registration › Penalties

The consequences for a New York foreign LLC that lacks authority

A foreign LLC without a certificate of authority, which costs $250 to apply for, cannot keep a lawsuit in a New York court while it does business there. Section 808 of the LLC Law sets four consequences, and section 809 lets the attorney general step in.

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The consequences at a glance

Lawsuits
No lawsuit or special proceeding can be started in New York courts before authority is granted
Contracts
Remain valid; the LLC can still defend a suit
Members, managers, agents
Not liable for the LLC's obligations on this ground alone
Service of process
The Secretary of State becomes the LLC's agent for claims from its New York business
Attorney general
Must sue to restrain business done in violation of the chapter

Section 808(a): the courthouse is closed

Until it holds a certificate, the LLC cannot begin an action or special proceeding before a New York court. The bar lifts when authority is granted.

Section 808(b): contracts stand

Non-compliance with the chapter leaves every contract and act of the LLC valid, and the LLC may still answer any claim brought against it in a New York court. Customers and suppliers keep their rights. What the company loses is the right to start a case.

Section 808(c): no personal liability for this alone

A member, manager or agent of the foreign LLC is not liable for its contractual obligations or other liabilities solely because the LLC did or has done business in New York without a certificate. The liability shield is not lost by the lapse. Other grounds of personal liability, if any, are unaffected.

Section 808(d): the Secretary of State as agent

Doing business without authority makes the Secretary of State the LLC's agent for any claim stemming from its New York business, and process can be served on the Secretary of State in the way article 3 of the chapter describes. That makes the lapse risky for a different reason: papers may reach you late, through a forwarding address you did not choose.

Section 809: the attorney general

Section 809 directs the attorney general, acting alone or at a proper party's request, to sue to stop a foreign LLC that lacks a certificate from operating in breach of the chapter or in a way state law prohibits. The attorney general may also seek to annul the authority of an LLC doing prohibited business. Annulment is a separate matter from suspension and follows a court order filed with the Department.

Suspension for missed publication

An LLC that has authority can lose it for want of publication. If proof of publication is not filed within 120 days of the application, authority to do business is suspended, and filing proof in substantial compliance later annuls the suspension. While suspended, the LLC is in much the same position as one that never applied. The publication page describes the steps.

What the cure costs

Applying costs $250, and publishing and proving costs $50 at the Department plus the newspapers' charges. The Department fees come to $300. Whether anything else attaches to months of unauthorized business depends on your facts; a New York business lawyer can tell you.

Keeping authority once you have it

Authority holds while the LLC publishes in time and files the $9 biennial statement every two years. A suspension for late proof is annulled by a later filing in substantial compliance, and the Secretary of State stays the agent for process throughout.

Corporations

Section 1312 of the Business Corporation Law treats a foreign business corporation in the same spirit: it cannot sue until it is authorized and current on what it owes the state, and its contracts stay valid. See the corporation page.

Who decides if you were doing business

The consequences all turn on one question, whether the LLC was doing business here. The doing business page covers the four excluded activities. The Department gives no opinion on the question.

Penalty questions

What can the attorney general do?

Sue to restrain a foreign LLC from doing business without a certificate.

Can an unauthorized LLC enforce a contract in court?

Not until it has a certificate of authority.

Does lacking authority void my contracts?

No, they stand.

Does a member become personally liable?

Not on that ground alone.

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Our fee and the New York fee

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  • The New York Application for Authority drafted from your replies
  • Your home-state certificate of existence checked for age before filing
  • A New York registered agent, ours or yours
  • The filed record emailed to you
  • Renewal: after the first year, the agent service renews at $149 a year
New York

$199

+ $250 New York fee (LLC)

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New York charges $250 for an LLC, $225 for a corporation and $135 for a nonprofit. Publication for an LLC is a separate step with its own costs. $199 plus the state fee, including your first year of registered agent service; after that the agent service renews at $149 a year.

Sources

  1. New York Department of State, Application for Authority for foreign limited liability companies
  2. New York Department of State, Form DOS-1361-f-a, Application for Authority of a foreign LLC
  3. New York Department of State, fee schedules
  4. New York Department of State, Application for Authority for a foreign business corporation
  5. New York Business Express, foreign not-for-profit Application for Authority
  6. New York Limited Liability Company Law, section 808
  7. New York Limited Liability Company Law, section 809
  8. New York Department of State, Certificate of Publication for a foreign limited liability company
  9. New York Limited Liability Company Law, section 802
  10. New York Department of State, biennial statements
  11. New York Business Corporation Law, section 1312

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