Corporations and Partnerships: Doing Business Filings
Does a foreign corporation or partnership have to register to do business in Massachusetts and, if it must but fails to do so, what's the effect, if any, on the status of its real estate title?
Ownership of real estate constitutes "doing business," requiring the foreign entity to register in Massachusetts. The question, however, is what result follows in the event that the requirement of filing is not observed. It subjects the entity to penalties and fines, that's for sure, and may prevent it from using the courts of the commonwealth. But it does not affect the title to property or the ability to hold title thereto or convey the same.
But the question of the status of the title to the real estate—and not the issue of fines and penalties—is of concern to us as conveyancers. G.L.c. 181, §9 states that foreign corporations which have complied with the doing business filing provisions may purchase and hold real estate in this Commonwealth, the statute also specifically states that the failure to so file will not affect contracts of the corporation. Moreover, in Partridge, Deeds, Mortgages and Easements, Wright & Potter Printing Company (Revised Edition, 1947) the author comments on the statute:
[The statute] seems to imply that foreign corporations which have not qualified as above are incapable of acquiring title to land in Massachusetts, but the section has not been cited and upon principles it is believed that the delivery of a proper deed of land in this Commonwealth to a foreign corporation which had not qualified here would vest the seisen in the grantee, and, if this is so, such a corporation, subject to the right of the Commonwealth to have injunction or to penalize the officers, would have the power to sell and convey the land.
Similar provisions apply to partnerships. See G.L.c. 109, §55.