Whether you're managing a successful business, overseeing an investment entity, or involved in a high-value partnership, knowing where your company can bring or defend a lawsuit is a critical piece of protecting your legal and financial interests, especially when disputes involve significant income, equity, or assets. For many companies operating across state lines, questions often arise about whether a corporation or limited liability company (LLC) can sue, or be sued, in New York State courts.
Here’s what every business owner, executive, and investor should understand about jurisdiction and litigation rights in New York.
Domestic vs. Foreign Entities
Under New York law, a domestic corporation or LLC that was formed under New York law has full capacity to sue and be sued in New York courts. A foreign entity, by contrast, is any corporation or LLC formed under the laws of another state or country. When these entities operate in New York, they must comply with certain registration requirements to maintain good standing and to assert legal claims in state court.
Can a Foreign Business Be Sued in New York?
Yes. A foreign corporation or LLC can be named as a defendant and required to defend itself in a New York lawsuit, even if it has not registered with the state. New York courts do not require prior registration for a foreign entity to be subject to a suit.
Can a Foreign Business Sue in New York?
No, not without proper registration. A foreign corporation or LLC that is actively doing business in New York, but has not registered with the Department of State, generally lacks the legal capacity to initiate a lawsuit in New York courts. The law requires these entities to first obtain authority to do business in New York.
For corporations, this authority is granted through a registration process that includes filing with the Secretary of State and designating an agent for service of process. For LLCs, the process includes submitting a certificate of existence and publishing notice in local newspapers.
Does Registering in New York Expose a Business to Broad Lawsuits?
No. While registration is necessary to bring a lawsuit, it does not mean that a foreign business has consented to be sued in New York for disputes that have no connection to the state. Registering to do business and appointing an in-state agent for service of process does not establish general jurisdiction in New York.
This distinction is particularly important for businesses with a national or global footprint that want to maintain control over where they may be sued. Unless a lawsuit arises from business conducted in New York or other valid jurisdictional connections exist, mere registration will not expose an entity to out-of-state claims in New York courts.
What If a Business Isn’t Registered Yet?
If a foreign corporation or LLC is found to be doing business in New York, but has not registered, courts may bar it from initiating a lawsuit. However, in many instances, courts will give the business an opportunity to cure the defect, allowing the entity time to complete the registration process and resume its legal claims, rather than dismissing the case outright.
That said, it is far more strategic to ensure compliance before litigation becomes necessary. Registration not only preserves the right to sue, but also strengthens the credibility and enforceability of a business's position in the eyes of the court.
What This Means for You
It is essential to assess whether your entity is properly authorized to do business in the state, if your business is:
- Actively managing operations or transactions in New York,
- Holding meetings, executing agreements, or conducting regular activity within the state, or
- Preparing to enforce or defend rights through litigation in New York.
At The Glennon Law Firm, P.C., we counsel business owners, executives, and professionals on how to structure their operations to protect their legal rights in high-stakes business, employment, trust and estate, and matrimonial disputes. Whether you're preparing for litigation or trying to avoid it, we help you stay compliant, strategic, and protected.
Contact us to schedule a confidential consultation with a litigation attorney who understands your business and your goals. You may learn more about us and how we operate by visiting these pages: About Us and What Sets Us Apart
And here are a few more related blog posts by us:
- Can My LLC Business Partner Compete Against Our Business?
- 5 Things to Know About Judicial Dissolution of a Limited Liability Company (LLC) In New York State
This post is not intended as legal advice, but rather for educational purposes.