Doing Business

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Doing Business

A qualification imposed in state long-arm statutes governing the Service of Process, the method by which a lawsuit is commenced, which requires nonresident corporations to engage in commercial transactions within state borders in order to be subject to the Personal Jurisdiction of state courts.The due process clause of the U.S. Constitution, and similar provisions found in state constitutions, guarantees the fair and orderly administration of justice by the courts by providing that any individual, including corporations, must receive notice of the charges against him or her or it and an opportunity to present a defense prior to the rendition of judgment. This clause has been interpreted by courts to require a state to have some tie or relationship to a defendant before its courts acquire the power to bind the individual personally. Employing this reasoning, state legislatures enacted statutory provisions requiring nonresident or foreign corporations to do or transact business within the state if they are to be amenable to the personal jurisdiction of its courts. Doing business is one kind of minimum contact that brings such a corporation within the jurisdiction of the court.

The nature and extent of business to be done within a state varies according to the jurisdiction. It must be an exercise of some of the functions for which the enterprise is incorporated and it must be of a sufficient nature to justify an inference that the corporation is present within the state. If so, the corporation is viewed as having received some benefit of the laws of the state and, therefore, should also be liable for its actions therein. In the past, there had to be a substantial tie to the state, such as the operation of an office or the presence of a resident employee. Today, courts consider this requirement fulfilled by a single commercial transaction, if the cause of action—facts providing a right to a judicial remedy—arises from it. If the Cause of Action does not, however, a nonresident corporation is not amenable to service of process unless it has a substantial and regular relationship with the state comparable to the residency of an individual, such as having its corporate headquarters in the forum state. In cases involving subsidiary corporations, the intrastate business engaged in by a subsidiary is sufficient to make its parent corporation amenable to process in the state because the parent corporation is deemed to be doing business in the state.

The laws of each state must be consulted to determine whether a foreign corporation is doing business within a state to make it amenable to process therein.

The phrase doing business is sometimes used in the assessment of local taxes upon a nonresident corporation in jurisdictions other than the place of its incorporation in which it engages in business.

doing business

v. carrying on the normal activities of a corporation on a regular basis or with substantial contacts--not just an occasional shipment. This is important to determine if an out-of-state corporation is "doing business" in a state so that it can be served with a complaint, is subject to certain state taxes, and/or must register as a "foreign" (out-of-state) corporation operating within the state.

References in periodicals archive ?
The Doing Business project, launched in 2002, looks at domestic small and medium-size companies and measures the regulations applying to them through their life cycle.
Doing Business ranked Macedonia as top reformer ahead of Germany, Australia and Canada.
Based on the World Bank's Doing Business Reports in the last three years
The World Bank, under the presidency of Kim Yong Jim, has recently launched The Doing Business 2015 Report entitled Going Beyond Efficiency , which is the 12th in a series of annual reports aiming at enhancing business activity by measuring regulations across 189 economies, each evaluated based on how close their business regulations are to the best global practices.
Doing Business 2015: Going Beyond Efficiency shows that in the past year, economies in Europe and Central Asia further improved the regulatory environment for local entrepreneurs, adding to the gains recorded in the past decade.
Doing Business 2015: Going Beyond Efficiency, a World Bank Group flagship publication, is the 12th in a series of annual reports measuring the regulations that enhance business activity and those that constrain it.
This year's Doing Business Report finds that one of the regions where there is less incidents of reform is the Middle East and Northern Africa and I think in part because of the civil unrest, although it is a very diverse region, and there are economies where the reform pace is actually quite intense, in particular the United Arab Emirates has implemented three reforms, and it is one of the top ten improvers this year.
This year's Doing Business report, which ranks countries according to how business-friendly they are, comes in the wake of widespread criticism of its relevance and robustness.
In the 2014 edition of the Doing Business report, the World Bank ranked economies from 1 to 189 by the ease of doing business index.
Rutherford, doing business as A-1 Electric and Plumbing.
A fundamental premise of Doing Business is that economic activity requires good rules.
At the conference, World Bank's Doing Business Project senior strategy adviser Dahlia Khalifa made a presentation that included details of the recently released World Bank report.