Legal Question in Business Law in New York

Re: corporation law

A foreign corporation must file with the Secretary of State if it is �doing business� in New York. NY BCL �1301. Courts have held that �isolated transactions having no continuity, and those having no profit motive or commercial significance do not amount to "doing business". McDowell v Starobin Electrical Supply Co. (1918) 104 Misc 596, 172 NYS 221.

Examples of doing business in New York are as follows:

�Subletting to different tenants, of a building in city of New York leased to a foreign corporation under a lease delivered in this state, constitutes �doing business in this state�." Cassidy's, Ltd. v Rowan (1917) 99 Misc 274, 163 NYS 1079.

�Regular and long-continued buying of goods in New York can constitute doing business here, however, in like manner as selling them or performing services for pay.� Merchandise Reporting Co. v L. Oransky & Sons (1929) 133 Misc 890, 234 NYS 83.

�Corporation was clearly engaged in doing business in New York where, over a two and one-half year period, it had been engaged in erecting houses and general building construction work in New York, where its employees resided for varying periods of time while working on such contracts, and where its machinery and equipment was stationed in New York for weeks and sometimes months.� Berkshire Engineering Corp. v Scott-Paine (1961) 29 Misc 2d 1010, 217 NYS2d 919.

Examples of not doing business in New York are as follows:

�Foreign corporation which enters into single transaction in New York, maintains bank account in New York, and retains New York law firm to represent it, with partner of law firm being director of foreign corporation, is not "doing business" in New York, so as to be precluded from maintaining action in New York.� Azuma N.V. v Sinks (1986, SD NY) 646 F Supp 122.

�Texas corporation was not "doing business" in New York and was thus not precluded, by virtue of being unlicensed under � 301, from maintaining action in New York, despite its solicitation of business in New York, where work performed need not by its nature have been performed in New York and plaintiff claimed to have performed all its work in Texas.� Expense Reduction Services, Inc. v Jonathan Woodner Co. (1989, SD NY) 720 F Supp 262.

�Foreign corporations maintaining exhibits at New York World's Fair are not doing business in this state so as to be subject to taxation or require qualification.� 1938 Ops Atty Gen 331.

Mike.