Registration of Foreign Associations – General Rule and Exclusions
General Rule – A foreign filing association or foreign limited liability partnership may not do business in this Commonwealth until it registers with the Department of State.
Exclusions – Activities of a foreign filing association or foreign limited liability partnership that do not constitute doing business in this Commonwealth include the following:
(1) Maintaining, defending, mediating, arbitrating or settling an action or proceeding.
(2) Carrying on any activity concerning its internal affairs, including holding meetings of its interest holders or governors.
(3) Maintaining accounts in financial institutions.
(4) Maintaining offices or agencies for the transfer, exchange and registration of securities of the association or maintaining trustees or depositories with respect to the securities.
(5) Selling through independent contractors.
(6) Soliciting or obtaining orders by any means if the orders require acceptance outside of this Commonwealth before the orders become contracts.
(7) Creating or acquiring indebtedness, mortgages or security interests in property.
(8) Securing or collecting debts or enforcing mortgages or security interests in property securing the debts and holding, protecting or maintaining property so acquired.
(9) Conducting an isolated transaction that is not in the course of similar transactions.
(10) Owning, without more, property.
(11) Doing business in interstate or foreign commerce.
Being an interest holder or governor of a foreign association that does business in this Commonwealth does not by itself constitute doing business in this Commonwealth.
In general terms, any conduct more regular, systematic, or extensive than that
described above constitutes doing business and requires the foreign association
to register to do business. Typical conduct requiring registration includes
maintaining an office to conduct local intrastate business, selling personal
property not in interstate commerce, entering into contracts relating to the
local business or sales, and owning or using real estate for general purposes.
But the passive owning of real estate for investment purposes does not
constitute doing business. See (10).
The above eleven criteria apply only to the question whether the association's contacts with Pennsylvania are such that it must register with the Department
of State. The test of "doing business" as defined in the negative is not
applicable to other questions such as whether the association is amenable to
service of process, is liable for state or local taxes or is subject to regulation under other laws of this Commonwealth.
For more information, see the Committee Comments to 15 Pa.C.S. § 403.