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 significant increase in the countrys position in the Doing Business ranking in terms of Registering Property was due to the improvement of accounting and registration system in real estate.
The Doing Business report for 2018 shows that Pakistan was able to cut its distance-to-frontier (DTF) score by 0.
Starting a business is one of the ten World Bank's Doing Business indicators on the basis of which 190 economies all over the world will be evaluated for business friendly reforms this year.
The Doing Business project provides objective measures of business regulations and their enforcement across 190 economies and selected cities at the sub national and regional level.
For the economy to grow and flourish, improving the business environment is indispensable,' Secretary Planning and Development Department Iftikhar Ali Sahoo told media on the occasion of the launch of 100 Days Plan to Doing Business Reforms.
Earlier, the World Bank released its 'Ease of Doing Business Report 2018,' which showed that the country's overall ranking fell to 113th from 99th in the 2017 edition.
The recent report by the World Bank on 'Ease of Doing Business index' showed that India rose as much as 30 positions to rank 100th amongst 190 countries.
The WB report ranked Pakistan at 147 out of 190 economies in ease of doing business while the country ranks 142 in starting a business.
Pakistan, which implemented four reforms in the past year, also made it easier to register a new business, transfer commercial property and facilitate cross border trade," the Bank said in the Doing Business 2018 report, which monitors the ease of doing business for small and medium enterprises around the world.
In the World Bank's 2017 Doing Business Report released in October last year, the Philippines ranked 99th out of 190 economies, up only by a few notches from 103rd previously.
com)-- Published annually, the World Bank Doing Business project provides objective measures of business regulations for local firms in 189 economies worldwide.
The World Bank's Doing Business report measures the legal not the real state in Macedonia's economy, economists says.