48-2c-1603 - Consequences of transacting business without authority.
48-2c-1603. Consequences of transacting business without authority.
(1) A foreign company transacting business in this state without authority, or anyone inits behalf, may not maintain a proceeding in any court in this state until an application forauthority to transact business is filed with the division.
(2) The successor to a foreign company that transacted business in this state withoutauthority and the assignee of a cause of action arising out of that business may not maintain aproceeding based on that cause of action in any court in this state until an application forauthority to transact business is filed on behalf of the foreign company or its successor.
(3) A court may stay a proceeding commenced by a foreign company, its successor, orassignee until it determines whether the foreign company, its successor, or assignee is required tofile an application for authority to transact business. If it so determines, the court may furtherstay the proceeding until the required application for authority to transact business has been filedwith the division.
(4) A foreign company that transacts business in this state without authority is subject toa civil penalty, payable to this state, of $100 for each day in which it transacts business in thisstate without authority. However, the penalty may not exceed a total of $5,000 for each year. Each manager or member of a foreign company who authorizes, directs, or participates in thetransaction of business in this state without authority and each agent of a foreign company whotransacts business in this state on behalf of a foreign company that is not authorized is subject toa civil penalty, payable to this state, not exceeding $1,000 for each year.
(5) The civil penalties set forth in Subsection (4) may be recovered in an action broughtin the district court for Salt Lake County or in any other county in this state in which the foreigncompany has an office or in which it has transacted business. Upon a finding by the court that aforeign company or any of its managers, members, or agents has transacted business in this statein violation of this part, the court shall issue, in addition to or instead of a civil penalty, aninjunction restraining the further transaction of the business of the foreign company and thefurther exercise of any rights and privileges in this state. Upon issuance of the injunction, theforeign company shall be enjoined from transacting business in this state until all civil penaltieshave been paid, plus any interest and court costs assessed by the court, and until the foreigncompany has otherwise complied with the provisions of this part.
(6) Notwithstanding Subsections (1) and (2), the failure of a foreign company to haveauthority to transact business in this state does not impair the validity of its acts, nor does thefailure prevent the foreign company from defending any proceeding in this state.
Amended by Chapter 364, 2008 General Session