State Codes and Statutes
Statutes > Utah > Title-16 > Chapter-10a > 16-10a-150216-10a-1502. Consequences of transacting business without authority.
(1) A foreign corporation 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 corporation 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 for authorityto transact business is filed on behalf of the foreign corporation or its successor.
(3) A court may stay a proceeding commenced by a foreign corporation, its successor, orassignee until it determines whether the foreign corporation, its successor, or assignee is requiredto file 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 filedby the division.
(4) A foreign corporation that transacts business in this state without authority is subjectto a 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 officer of a foreign corporation who authorizes, directs, or participates in the transaction ofbusiness in this state without authority and each agent of a foreign corporation who transactsbusiness in this state on behalf of a foreign corporation that is not authorized is subject to a civilpenalty, payable to this state, not exceeding $1,000.
(5) The civil penalties set forth in Subsection (4) may be recovered in an action brought inan appropriate court in Salt Lake County or in any other county in this state in which thecorporation has a registered, principal, or business office or in which it has transacted business.Upon a finding by the court that a foreign corporation or any of its officers or agents havetransacted business in this state in violation of this part, the court shall issue, in addition to orinstead of a civil penalty, an injunction restraining the further transaction of the business of theforeign corporation and the further exercise of any corporate rights and privileges in this state.Upon issuance of the injunction, the foreign corporation shall be enjoined from transactingbusiness in this state until all civil penalties have been paid, plus any interest and court costsassessed by the court, and until the foreign corporation has otherwise complied with theprovisions of this part.
(6) Notwithstanding Subsections (1) and (2), the failure of a foreign corporation to haveauthority to transact business in this state does not impair the validity of its corporate acts, nordoes the failure prevent the corporation from defending any proceeding in this state.
Amended by Chapter 184, 1993 General Session
