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Q: real estate ( Answered 5 out of 5 stars,   0 Comments )
Subject: real estate
Category: Business and Money
Asked by: lucyfur-ga
List Price: $20.00
Posted: 28 Aug 2002 11:22 PDT
Expires: 27 Sep 2002 11:22 PDT
Question ID: 59519
Some states do not require a foreign corporation to register with that
state to merely purchase real estate because the corp is not
considered " doing business" Is this true in Ohio?
Subject: Re: real estate
Answered By: expertlaw-ga on 28 Aug 2002 12:38 PDT
Rated:5 out of 5 stars
Dear lucyfur,

Ohio does require that a foreign corporation register with the state
in order to purchase real estate. An explanation citing the relevant
statutes, and a case applying those statutes, follows.

I. The Statutory Background

The State of Ohio regulates foreign corporations through Chapter 1703
of the Ohio Revised Code. The entire Ohio Revised Code is online at:

Pursuant to Section 1703.01, "'Foreign corporation' means a
corporation incorporated under the laws of another state or a bank,
savings bank, or savings and loan association chartered under the laws
of the United States, the main office of which is located in another

A corporation that purchases land is not excepted from the
requirements of this Chapter. Section 1703.02 describes the
corporations excused from Chapter 1703: "Sections 1703.01 to 1703.31
of the Revised Code do not apply to corporations engaged in this state
solely in interstate commerce, including the installation,
demonstration, or repair of machinery or equipment sold by them in
interstate commerce, by engineers, or by employees especially
experienced as to such machinery or equipment, as part thereof; to
credit unions, title guarantee and trust companies, bond investment
companies, and insurance companies; or to public utility companies
engaged in this state in interstate commerce."

Pursuant to Section 1703.03, "No foreign corporation not excepted from
sections 1703.01 to 1703.31  of the Revised Code, shall transact
business in this state unless it holds an unexpired and uncanceled
license to do so issued by the secretary of state."

Where a foreign corporation "transacts business in this state without
being so licensed, or when its license has expired or been canceled
and has not been reinstated, shall forfeit not less than two hundred
fifty dollars nor more than ten thousand dollars." Section 1703.28

Thus, unless the purchase of real estate were excepted from the
concept of "doing business", a corporation buying real estate falls
under this statutory regime.

II. Purchasing Real Estate as "Doing Business"

The Ohio Courts have addressed the purchase of real estate in the
context of Chapter 1703. For example, in Sunny Family Ltd. P'ship. v.
Lowe, 2001 Ohio 2348; 2001 Ohio App. Lexis 1465 (2001). In that case,
a limited partnership, duly registered in Ohio, was engaged in real
estate transactions. The general partner of that limited partnership
was a Nevada Corporation, which was not registered in Ohio. Applying
Section 1703.03 of the Revised Code, the Ohio Court of Appeals
observed that although the general partner could not engage in real
estate transactions on its own behalf without first registering, it
could do so through the duly registered general parthership.

(In case you are not familiar with citations to case law, they
typically take the following form: <Volume Number> <Publication> <Page
Number>. Thus, 2001 Ohio 2348 refers to volume 2001 of the Ohio
Reporter, at page 2348.)

Please note that, pursuant to Section 1703.29, an unregistered foreign
corporation is valid - so a foreign corporation can purchase real
estate without registration, but subject to the penalties outlined
above. However, a foreign corporation does not exist for the purposes
of litigating a legal claim until it registers.

Research Strategy:

Initially, I browsed relevant Ohio statutes to find relevant sections:

Subsequently, I searched recent Ohio case law on LexisOne using the
boolean keyphrase, "((buy! or bought or purchas!) /s (real property or
real estate or realty or land)) /p (transact! business)" (The
exclamation mark is a wildcard, "/s" means "in the same sentence", and
"/p" means "in the same paragraph.) LexisOne requires free

Had the LexisOne search not produced a relevant result, I would likely
have tried searching for the specific statutory provisions mentioned
above, by number.

I hope you find this helpful,

- expertlaw
lucyfur-ga rated this answer:5 out of 5 stars
An exceptionally good and complete answer. I came up with the same
answer doing my own research but I was hoping to be proven wrong. Nice

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