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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 under this chapter shall 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, acquiring or incurring obligations, 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. (Deleted by amendment).
  11. Doing business in interstate or foreign commerce.
  12. Acquiring, owning, holding, leasing as a lessee, conveying and transferring, without more and whether as fiduciary or otherwise: 
    (i)  real estate and mortgages and other liens thereon; or 
    (ii)  personal property and security interests therein.
  13. Conducting operations or performing work or services in good faith in response to a disaster or emergency event.
 
Participation in other associations. Being an interest holder or governor of a foreign association that does business in this Commonwealth shall not by itself constitute doing business in this Commonwealth.
Applicability. The above shall not apply in determining the contacts or activities that may subject a foreign filing association or foreign limited liability partnership to service of process, taxation or regulation under laws of this Commonwealth other than this title.

15 Pa.C.S. § 403 (relating to Activities not constituting doing business)

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.

The above 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. An association that has registered (or is required to register) will generally be subject to suit and state taxation, while an association that is subject to service of process or state taxation will not necessarily be required to register.

The list of activities set forth in subsection (a) is not exhaustive.

For more information, see the Committee Comments to 15 Pa.C.S. § 403.