Foreign LLC Can Enforce Sister-State Judgment without Qualifying to Do Business

In Conseco Marketing, LLC v. IFA and Insurance Services, Inc. (2013) 221 Cal. App. 4th 831, the court held that a limited liability company formed under the law of another state (a “foreign LLC”) need not qualify to do business in California to enforce a judgment obtained in another state (a “sister-state judgment”).

Under the Sister State and Foreign Money—Judgments Act (CCP § 1710.10 et seq.), a California judgment can be obtained simply by registering a sister-state judgment with the superior court, thereby avoiding the necessity of bringing a completely independent action here.

The question presented here was whether a foreign limited liability company can enforce a sister-state judgment in California without first qualifying to do business in California.

Under the Corporations Code’s definition of  “transacting intrastate business” a foreign LLC is not considered to be transacting intrastate business … solely by reason of “maintaining or defending any action or suit” or “securing or collecting debts.” Corp. Code § 17001 (ap)(2)(A) & (H). Thus a foreign limited liability company that is a judgment creditor does not have to qualify to do business in California in order to enforce a sister-state judgment because it is only collecting a debt.

Contact Richard G. Burt, Attorney and Counselor at Law with questions regarding doing business in California and foreign state judgments.

This entry was posted in Foreign LLC, Limited liability companies (LLC), Qualifying to Do Business. Bookmark the permalink.

Comments are closed.