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  1. #1

    Default Dispute With a Company That May Not be in Good Standing

    My question involves business law in the state of: Florida.

    As I was doing my due diligence on an arbitration case, I found out that the company owned by the other party, and which operates in Florida, is probably not in good standing.

    The company was originally incorporated as an LLC with the Secretary of State of Minnesota. Management overlooked to file annual renewals in Minnesota 2017 and 2018, and the MN Secretary of State put them in administrative termination in March 2018. The company is now considered inactive there. Management renewed registration as a foreign entity in Florida in April 2018. Is it correct to consider the company in Florida as unregistered at this time?

    I know this is a technicality, because there are procedures to reinstate companies by paying a nominal fee; when the issue will be raised they will have to first to file for reinstatement in Minnesota, reactivate their status there, and the renew their registration in Florida again; but for now they are deficient. I'm looking at this from my arbitration angle, because if the arbitrator rules in my favor, I will most probably have to enforce it by filing in federal court a petition of confirmation of arbitral award; in the past all payments due to me by the other party (and which came from an agreement) have been handled through his Miami company, because he resides overseas.

  2. #2
    Join Date
    Oct 2016
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    3,304

    Default Re: Foreign LLC

    You can check here to see if they are in good standing in Florida. http://search.sunbiz.org/Inquiry/Cor...nSearch/ByName

  3. #3

    Default Re: Foreign LLC

    Quote Quoting PayrolGuy
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    You can check here to see if they are in good standing in Florida.
    I had already checked the Florida secretary of state web site, and that's where I got my information that the company filed their annual report. However, the Florida SoS doesn't check whether the company is or is not active in MN. Therefore the information in the Florida Sos is technically not correct. The question for me is to see if there is any angle I can exploit from the non compliance.

  4. #4
    Join Date
    Oct 2016
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    Default Re: Foreign LLC

    They are registered and in good standing in Florida. That really is all that matters to you at this point because you action is taking place in Florida

  5. #5

    Default Re: Foreign LLC

    Quote Quoting PayrolGuy
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    They are registered and in good standing in Florida. That really is all that matters..
    I disagree with that; the registration loses validity, if they are not registered in the state of origin, because they are registered in Florida as a foreign company.

  6. #6
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    Jul 2018
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    Default Re: Foreign LLC

    Quote Quoting gciriani
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    As I was doing my due diligence on an arbitration case, I found out that the company owned by the other party, and which operates in Florida, is probably not in good standing.
    Let's start here. I assume you are a party to the arbitration case. When you refer to "the other party," that implies that there is only one other party. You indicated that the company in question is "owned by the other party," so I assume that the company is not also a party. All correct? Why were you researching this company?


    Quote Quoting gciriani
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    Is it correct to consider the company in Florida as unregistered at this time?
    Not sure what you mean by "unregistered." However, according to what you told us, notwithstanding the LLC's status in Minnesota, it sounds like it is active and in good standing in Florida.

    Going back to my first comment above, if the LLC in question is merely "owned by the other party" to the arbitration, why does any of this matter?

  7. #7

    Default Re: Foreign LLC

    Quote Quoting pg1067
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    Let's start here. I assume you are a party to the arbitration case. When you refer to "the other party," that implies that there is only one other party. You indicated that the company in question is "owned by the other party," so I assume that the company is not also a party. All correct?
    That is correct, the other party is an individual.
    Quote Quoting pg1067
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    Why were you researching this company?
    The company may be important after the arbitration process. Because the other party is a foreign national, he may resist by simply refusing to pay the award. Confirmation of an arbitral award usually is requested by filing a petition in court to confirm the award. It would next to impossible to collect against the individual, but it would be possible to collect against assets he has in this country. If the liability veil is pierced things might be even easier.
    Quote Quoting pg1067
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    Not sure what you mean by "unregistered." However, according to what you told us, notwithstanding the LLC's status in Minnesota, it sounds like it is active and in good standing in Florida.
    Because the company is registered in Florida as a foreign entity, if the foreign entity ceases to exist, you can't renew something that doesn't exist. There are other consequences I think, such as the impossibility of filing a lawsuit, and anything else that has a legal connotation.https://www.bizfilings.com/toolkit/r...-qualification
    Quote Quoting pg1067
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    Going back to my first comment above, if the LLC in question is merely "owned by the other party" to the arbitration, why does any of this matter?
    Every previous transaction between the other party and me (i.e. payments that are part of the contract for which I'm requesting arbitration), has been flowing through this Florida LLC.

  8. #8
    Join Date
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    Default Re: Foreign LLC

    Quote Quoting gciriani
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    That is correct, the other party is an individual. it would be possible to collect against assets he has in this country. If the liability veil is pierced things might be even easier.
    "Piercing the corporate veil" is a process used to hold the owners of a corporation (or LLC) personally liable for a corporate/LLC obligation, not the other way around. If you obtain an arbitration award and get that award confirmed by a court and get a judgment against the individual, then you can enforce that judgment against the individual's income and assets in the jurisdiction where judgment was entered (or any other jurisdiction where you domesticate the judgment). An individual's ownership interest in a corporation or LLC is an asset that may be subject to levy (subject to the applicable state law). Whether the corporation or LLC is in good standing or suspended might be relevant to the value of the ownership interest, but it isn't otherwise relevant.
    Quote Quoting gciriani
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    That is correct, the other party is an individual.
    Every previous transaction between the other party and me (i.e. payments that are part of the contract for which I'm requesting arbitration), has been flowing through this Florida LLC.
    Then you probably should have sued the LLC in addition to or instead of the individual.

    Are you represented by an attorney in the arbitration?

  9. #9

    Default Re: Foreign LLC

    Quote Quoting pg1067
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    "Piercing the corporate veil" is a process used to hold the owners of a corporation (or LLC) personally liable for a corporate/LLC obligation, not the other way around.
    Thanks for correcting my confusion.
    Quote Quoting pg1067
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    Then you probably should have sued the LLC in addition to or instead of the individual.
    I didn't sue. I used to be a part owner of the LLC, and eventually I signed an agreement to transfer ownership of the LLC to the other person, in exchange for a certain amount, part cash and part inventory, spread over four years, and the ability to buy and sell the product. I gave the choice to the other party to convey the payments in the way that was most convenient: either from him directly, or from the company he owns overseas, or from the company he owns in FL. All this was done in mediation, with one mediator. One clause says that disputes will be resolved with arbitration, in NYC, one arbitrator only, commercial rules for expedited arbitration. After less than two years later cash payments stopped, and more recently payments in kind stopped, as well as being prohibited to buy and sell.
    Quote Quoting pg1067
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    Are you represented by an attorney in the arbitration?
    At present I'm not represented by an attorney. When I contacted an arbitration lawyer in my area (Connecticut), less than three years ago, for the initial case, he suggested that the amount involved in the case was not enough for them to be involved, but he thought I could do an OK job by myself, and gave me a pointer. Eventually the AAA designated officer convinced us to try mediation first, under the umbrella of the AAA, which we did and concluded. Now two years later I filed a demand for arbitration because of failure of the other party to keep up with the terms of the mediation agreement. We are going to have an organizational teleconference in two days with the AAA.

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