California Corporations Code section 2203 outlines a critical provision concerning the legal capacity of foreign corporations operating within the state. It provides that without satisfying the prerequisites laid out in Corporations Code section 2105, these entities cannot pursue claims in California courts. Section 2105, mandates that all foreign corporations engaging in business activities within California must obtain a certificate of qualification from the California Secretary of State.
For practitioners representing defendants in California State Court facing claims from out-of-state or foreign corporations, it serves as a pivotal reminder. It is important to ascertain whether the plaintiff corporation possesses a certificate of qualification to conduct business within the state, otherwise it may provide a defense to the claim.
