Legal Question in Construction Law in California

Yes, IF the action does not arise out of facts and circumstances that would have required the LP to register. So, for example, if the LP takes an order for 5,000 widgets from a California customer, ships the widgets, and the customer doesn't pay. The LP is free to come to California courts to sue. If the LP sets up a widget plant in California, however, and orders 200 gross of "widget pak" shipping boxes, and the supplier is late delivering the widget paks so the LP loses a $100,000 widget order, and the LP has not registered as a CA foreign entity, the LP will not have access to CA courts to sue the widget pak maker. Although there are lots of holes and exceptions to that rule to prevent an unjust windfall to the widget pak maker, you never want to be the one counting on persuading the court to find an exception to the law.

I don't necessarily agree with Mr. McCormick. An out-of-state business entity may sue in a California court, but there are exceptions for entities which are not paying taxes they are required to pay for the privilege of doing business in California. See, e.g., Revenue & Taxation Code sections 23301 et seq.

Since you have a California Zip code, I suspect you are operating a business in California which is set up as a Delaware limited partnership but which in fact operates from a computer at your desktop in 94566. Maybe I'm wrong, but the assumption allows me to give you a possibly-useful answer.

If a business entity is required to pay a tax under the Revenue & Taxation Code because it is operating in California, such as a franchise tax, it may be barred from bringing or defending a suit in California courts.

Nevertheless, there is an appellate case in which a defectively-formed limited partnership was allowed to sue. I have skimmed the case, and haven't studied it. Yet, I believe the court's holding may be interpreted to mean that your suit could proceed even if you were required to pay some California tax to do business here. Have the lawyer who will be filing your suit look up American Alternative Energy Partners II v. Windridge, Inc. (1996) 42 Ca.App.4th 551. The appellate court overturned a trial court's ruling that the LP couldn't sue because it wasn't properly formed. It may shed light on your situation.