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.
