What an unregistered foreign LLC owes Alabama

Section 10A-1-7.23 allows the Secretary of State to charge a foreign filing entity a late fee that matches its registration fee, once for every year it was delinquent, provided it did business in the state for over 90 days (Ala. Code 10A-1-7.23). The fee schedule lists it as $150 a year for foreign LLCs, corporations, limited partnerships, LLPs and general partnerships. The statute says may, so the office has discretion, and the office may also condition the effectiveness of the registration on payment (Ala. Code 10A-1-7.23).

Apart from a corporation or organization formed under federal law, a foreign entity doing business in Alabama may not carry a claim through an Alabama court before it has registered (Ala. Code 10A-1-7.21(a)). The bar falls on starting or pursuing a case as plaintiff. It does not stop you defending one. For a company that wants to collect an unpaid invoice or enforce a contract in Alabama, the practical effect is that registration has to come first, and the late filing fee follows.

Doing business unregistered is treated as consent to be served about Alabama claims, by registered mail to the entity's home office or principal office or by other methods the code permits (Ala. Code 10A-1-7.21(c)). A neighbouring section makes the Secretary of State the entity's agent for those claims (Ala. Code 10A-1-7.22(a)). The result is that a lawsuit can reach the unregistered entity, while the entity cannot start its own.

Under Alabama's code, the owners' liability is decided by the entity's home law, and operating here unregistered does not by itself strip away a home-law shield (Ala. Code 10A-1-7.21(d)). Unregistered status does not, by itself, make members personally liable for the company's debts. It does not cure any other reason a court might have to reach the owners, so keep the company's records and finances separate as you would anywhere.