2010 Arkansas Code
Title 4 - Business and Commercial Law
Subtitle 3 - Corporations And Associations
Chapter 32 - Small Business Entity Tax Pass Through Act
Subchapter 10 - Foreign Limited Liability Companies
§ 4-32-1007 - Transaction of business without registration.

4-32-1007. Transaction of business without registration.

(a) A foreign limited liability company transacting business in this state may not maintain an action, suit, or proceeding in a court of this state until it has registered in this state.

(b) The failure of a foreign limited liability company to register in this state does not:

(1) Impair the validity of any contract or act of the foreign limited liability company;

(2) Affect the right of any other party to the contract to maintain any action, suit, or proceeding on the contract; or

(3) Prevent the foreign limited liability company from defending any action, suit, or proceeding in any court of this state.

(c) A foreign limited liability company transacting business in this state without registration may be served with process under 4-20-113 if the foreign limited liability company:

(A) Fails to appoint an agent for service of process under 4-20-112;

(B) No longer has an agent for service of process; or

(C) Has an agent for service of process that cannot with reasonable diligence be served.

(d) A foreign limited liability company which transacts business in this state without registration shall be liable to the state for the years or parts thereof during which it transacted business in this state without registration in an amount equal to all fees which would have been imposed by this chapter upon that foreign limited liability company had it duly registered and all penalties imposed by this chapter. The Attorney General may bring proceedings to recover all amounts due this state under the provisions of this section.

(e) A foreign limited liability company which transacts business in this state without registration shall be subject to a civil penalty, payable to the state, not to exceed five thousand dollars ($5,000) for each twelve-month period or part thereof, beginning with the date it began transacting business in this state and ending on the date it becomes registered.

(f) The civil penalty set forth in subsection (e) of this section may be recovered in an action brought within a court by the Attorney General. Upon a finding by the court that a foreign limited liability company has transacted business in this state in violation of this chapter, the court shall issue, in addition to the imposition of a civil penalty, an injunction restraining further transactions of the business of the foreign limited liability company and the further exercise of any limited liability company's rights and privileges in this state. The foreign limited liability company shall be enjoined from transacting business in this state until all civil penalties plus any interest and court costs which the court may assess have been paid and until the foreign limited liability company has otherwise complied with the provisions of this subchapter.

(g) A member or manager of a foreign limited liability company is not liable for the debts and obligations of the limited liability company solely because the limited liability company transacted business in this state without registration.