QUALIFYING TO "DO BUSINESS" IN MASSACHUSETTS

Foreign corporations "doing business" in Massachusetts must register with the Massachusetts Secretary of State (Mass. Gen. L. c. 181, §3).  Under §3 of c. 181, "doing business" includes owning and leasing Massachusetts real estate.  As noted in 28 Mass. Pr. (Eno and Hovey) 3d, §5.22, "it appears unsettled whether the mere holding of a mortgage affecting Massachusetts land" constitutes doing business in Massachusetts, although the authors are of the opinion that registration by a mortgagee is not required until such time as the mortgagee purchases the property at a foreclosure sale.

What is the consequence of failing to register to do business in Massachusetts?  Mass. Gen. L. c. 181, §9 provides that the failure to register as a foreign corporation shall not affect "the validity of any contract involving the foregoing corporation," (i.e., failure to register does not affect the validity of title).  However, Section 9 does provide that "no action shall be maintained or recovery had in any of the courts of the commonwealth by the foreign corporation as long as such failure [to register] continues."  The insured may also be subject to fines and other penalties.

According to MCA Title Standard No. 12, title to a foreign corporation as purchaser or mortgagee may be certified even if such corporation has failed to register to do business in Massachusetts but the certifying attorney should notify the insured that foreign corporations that fail to register with the Secretary of State are not permitted access to Massachusetts courts.