In the latest Weekly Wright Report:
Out of State Companies Doing Business In Maryland
by Jason Potter
Recently, I’ve come across several cases where claims were being asserted by companies that did work on projects located in Maryland. However, the companies asserting the claims were not registered or qualified to do business in Maryland. Rather, they were Pennsylvania and West Virginia companies. While these companies were providing materials, equipment, and labor on a Maryland project, they were not registered or qualified to do business in Maryland. Under Maryland law, however, before conducting business in Maryland, a foreign corporation must register or qualify with the Maryland State Department of Assessments and Taxation (“SDAT”). Ann. Code Md., Corporations Article §§ 7-202 – 7-203. The Maryland Code provides that if a foreign corporation is doing or has done any intrastate, interstate, or foreign business in this state without qualifying or registering with the SDAT, neither the corporation nor any person claiming under it may maintain a suit in any court of this state unless it has paid a penalty and any back taxes and registers/qualifies with SDAT. Id. § 7-301.
Maryland’s courts have held that a foreign corporation is doing business within the State when it does “a substantial amount of localized business in this State.” Snavely, Inc. v. Wheeler, 74 Md. App. 428, 434 (1988). Thus, if an out of state company is not registered to do business in Maryland, it can be barred from filing suit in Maryland to collect for the work it performed if it supplied labor, materials, and/or equipment on a Maryland-based project. The question of whether an out of state company is doing a sufficient amount of business in the state to be subject to the statutory prohibition is a factual issue that will depend on a case by case analysis. Courts will look for continued or repeated business, the performance of management functions in the state, and the maintenance of a physical presence in the state (such as an office, rental space, job site trailer, or the like). Courts will also look at the amount of money made in the state and compare that to the company’s overall revenue. Another aspect that courts will consider is whether the out of state company advertises and/or solicits business in the state. The Snavely court observed that solicitation of business in state “accompanied by the shipment of goods and an extensive set of activities or management functions in the state” is sufficient to fall within the statute’s definition of “doing business.” Id. at 435.
The takeaways: First, if you are an out of state company doing business in Maryland, you need to register or qualify to do business in the state or you may be at risk of having no Maryland remedy for getting paid. Second, if you are a Maryland company that has contracted with an out of state partner, you may have a defense to a claim from that partner if it is not registered or qualified to do business in Maryland. Third, other states have similar laws, so if you are a Maryland company doing business in other states, you should check your registration in those states.
Workplace Meeting Complaints
A 2018 survey by Accountemps asked 1,009 office workers what they most disliked about meetings. The complaints were as follows:
- Meetings started or ended late
- The information could have been disseminated more efficiently through email
- The time allotted for the information exchange was either too long or too short
- Attendees were distracted and used their phones or doodled on paper
- Attendees rudely interrupted and talked over each other
- The agenda was not followed
- Attendees were unprepared
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