West Virginia Foreign Registration / If you skipped it
The legal position of a foreign LLC that has worked in West Virginia without a certificate of authority
Registering costs $150. For skipping it, the consequence the LLC act names is this: a foreign limited liability company transacting business in the state may not maintain an action or proceeding in the state unless it has a certificate of authority.
What the LLC act provides
| Subject | Rule |
|---|---|
| Suing | No action or proceeding in the state until the company has a certificate |
| Defending | The company can still defend an action or proceeding here |
| Contracts | A contract or act of the company stays valid |
| Owners | Limits on liability for managers, members and transferees are not waived solely by the lapse |
| Service | The Secretary of State is the company's agent for claims from its business here |
| Injunction | The state's Attorney General can sue to stop the company's business here |
The first rule: no lawsuit
A foreign limited liability company transacting business in the state may not maintain an action or proceeding in the state unless it has a certificate of authority. A company that wants to enforce a contract, collect a debt or defend its rights as a plaintiff in a West Virginia court has to register first.
The second rule: contracts survive
The failure to have a certificate of authority does not impair the validity of a contract or act of the company or prevent it from defending an action or proceeding in the state. A customer or supplier cannot treat the contract as void just because the company was unregistered.
The third rule: owners keep their protection
Limitations on personal liability of managers, members and their transferees are not waived solely by transacting business in the state without a certificate of authority. The statute draws a line between losing access to the courts and losing the limited liability the owners chose.
The fourth rule: the Secretary of State receives the lawsuit
A company that transacts business without a certificate of authority appoints the Secretary of State as its agent for service of process for claims arising out of that business. That gives a plaintiff a way to serve the company without finding an agent of the company's own.
The fifth rule: the Attorney General
The statute gives the state a remedy: the Attorney General may maintain an action to restrain a foreign limited liability company from transacting business in the state in violation of the article. It is a power to restrain.
Corporations are different
For a foreign corporation the corporate statute adds a bill: a foreign corporation that transacts business without a certificate of authority is liable for all fees and taxes it would have paid had it applied and filed its reports, plus all penalties for failing to pay them. The same section says a foreign corporation's lack of a certificate does not impair the validity of its corporate acts or prevent it from defending a proceeding.
Practical effects of the no-suit rule
The bar on maintaining an action bites hardest when the company needs to collect from a customer or enforce a contract. Defending a case is still allowed, and the contract being enforced is still valid. Registering removes the bar, so the real cost of waiting is the time during which the company cannot go to court.
Fixing it
The fix is to apply. The application costs $150 and the annual report $25. Whether and from when your company has been transacting business in West Virginia is a legal judgment based on the facts, and a West Virginia business lawyer can answer it. After that we complete the form and file. Registering ends the bar on suing; the rules on contracts, owners and service stay as they are.
Penalty questions
What does the LLC act attach to skipping registration?
A bar on starting court cases until the company has a certificate, and an Attorney General power to restrain. Contracts stay valid.
Do the company's contracts fail?
No. Its contracts and acts remain valid.
May the company start a case before registering?
Only after it holds a certificate of authority.
Can the Attorney General stop the company?
The statute lets the Attorney General sue to restrain a company working here in violation of the article.
Does the company lose its liability protection?
Not solely because it lacked a certificate.
What you pay
Get authority in West Virginia
West Virginia$199
+ $150 state fee
- Form LLF-1 prepared from your questionnaire answers
- A home-state good standing certificate dated in the current tax year
- A West Virginia agent for service of process, ours or your choice
- The filed certificate of authority, passed on to you
- Renewal: after the first year, the agent service renews at $149 a year
$150 is the Secretary of State's fee for an LLC. Veteran-owned companies can have it waived, and an exemption application costs $25. $199 plus the state fee, including your first year of registered agent service; after that the agent service renews at $149 a year.
Sources
- West Virginia SOS, register an out-of-state (foreign) business
- Form LLF-1 and instructions, application for certificate of authority of a limited liability company
- West Virginia SOS, fee schedule for services and registration
- West Virginia SOS, annual reports
- W. Va. Code 31B-10-1003, activities not constituting transacting business
- Form LLF-2, application for exemption from certificate of authority of a limited liability company
- W. Va. Code 31B-10-1008 and 1009, effect of failure to obtain a certificate of authority
- W. Va. Code 31D-15-1502 and 1503, foreign corporations
Working in West Virginia?
Order now and the application is on file before another reporting season passes.