Ark. Code Ann. § 4-27-1502 (2026)

Research References

Ark. L. Rev.

Emily C. Goins, Case Note: Foreign Corporation Registration and the Ability to Perform Non-Judicial Foreclosures in Arkansas in Light of JPMorgan Chase Bank v. Johnson, 67 Ark. L. Rev. 435 (2014).

Case Notes

Constitutionality.

Statute concerning filing and penalties for noncompliance was constitutional. Roberts v. Chatwin, 108 Ark. 562, 158 S.W. 497 (1913); Republic Power & Serv. Co. v. Gus Blass Co., 165 Ark. 163, 263 S.W. 785 (1924) (preceding decisions under prior law).

Statute concerning filing and penalties for noncompliance, if applied to foreign corporations shipping goods into the state to fill orders, was invalid as repugnant to the commerce clause of the federal Constitution. American Ry. Express Co. v. H. Rouw Co., 173 Ark. 810, 294 S.W. 401 (1927); Furst & Thomas v. Brewster, 282 U.S. 493, 51 S. Ct. 295, 75 L. Ed. 478 (1931) (preceding decisions under prior law).

Where soliciting agent of foreign corporation solicited and obtained from local merchants contracts for advertising films which were manufactured outside the state, main purpose of the contracts being the exhibition or screening of the films in this state, and shipment of the films being merely incidental to such purpose, imposition of penalty provided by statute was not an interference with interstate commerce. State ex rel. Independence County v. Tad Screen Adv. Co., 199 Ark. 205, 133 S.W.2d 1 (1939) (decision under prior law).

Applicability of statute to foreign corporation engaged in the construction of a levee under contract with the federal government was not repugnant to either the commerce clause or the due process clause of the federal Constitution.E.E. Morgan Co. v. State ex rel. Phillips County, 202 Ark. 404, 150 S.W.2d 736, appeal dismissed, 314 U.S. 571, 62 S. Ct. 77, 86 L. Ed. 463 (1941) (decision under prior law).

Statute could not constitutionally be applied to an action by a news gathering organization to recover on a contract with an Arkansas broadcasting company, where the nature of the news gathering organization's business required a finding that interstate commerce was involved. Associated Press v. Riddle, 496 F. Supp. 119 (E.D. Ark. 1980) (decision under prior law).

In General.

Statute did not confer a local residence upon foreign corporations; it only provided a remedy for those who may have causes of action against them in this state. Central Coal & Coke Co. v. Orwig, 150 Ark. 635, 235 S.W. 390 (1921) (decision under prior law).

Statute, if applicable, had to be enforced by the court even though to enforce it would cause a forfeiture. Pratt Lab., Inc. v. Teague, 160 F. Supp. 176 (W.D. Ark. 1958) (decision under prior law).

State law of Arkansas is applied to determine the “threshold” application of statute to activities. Uncle Ben's, Inc. v. Crowell, 482 F. Supp. 1149 (E.D. Ark. 1980) (decision under prior law).

Construction.

Statute was a penal statute and to be strictly construed in favor of those against whom the penalty was sought. Alexander Film Co. v. State, 201 Ark. 1052, 147 S.W.2d 1011 (1941); Widmer v. J.I. Case Credit Corp., 243 Ark. 149, 419 S.W.2d 617 (1967); Wilkins v. M & H Fin., Inc., 476 F. Supp. 212 (E.D. Ark. 1979), aff'd, 621 F.2d 311 (8th Cir. 1980) (preceding decisions under prior law).

Penal statute was not to be invoked except in cases where the evidence warranted a belief that the corporation was, in fact, doing business within the state. Murray Tool & Supply Co. v. State ex rel. Crawford County, 203 Ark. 874, 159 S.W.2d 71 (1942) (preceding decisions under prior law).

Purpose.

The sole purpose of the penalty imposed under statute was to secure compliance with the provisions requiring foreign corporations to secure a certificate of authority to do business in this state before doing any such business. Alexander Film Co. v. State, 201 Ark. 1052, 147 S.W.2d 1011 (1941) (decision under prior law).

The lawmakers by increasing the fine (in former law) did not intend to declare by implication that the state's long-standing policy of supplementing the monetary penalty by the additional provision that the contracts of unlicensed foreign corporations should be unenforceable was being abandoned. Ark. Airmotive Div. of Currey Aerial Sprayers, Inc. v. Ark. Aviation Sales, Inc., 232 Ark. 354, 335 S.W.2d 813 (1960) (decision under prior law).

This section and § 4-27-1501 are not to be used to penalize, but to encourage foreign corporations to file for a certificate of authority. Johnny's Pizza House, Inc. v. Huntsman, 311 Ark. 346, 844 S.W.2d 320 (1992).

Applicability.

Statute had no application to defendant's motion that a matter be stayed pending arbitration of disputes which arose as a result of two separate contracts entered into between plaintiffs and defendant. Consolidated Naturals, Inc. v. Wm. T. Thompson Co., 623 F. Supp. 458 (W.D. Ark. 1985) (decision under prior law).

Statute prevented an unregistered foreign corporation from enforcing its contracts; however, where the relief being awarded the claimants was restitutionary in nature and was based upon the theory of quasi-contract, statute was inapplicable. Dews v. Halliburton Indus., Inc., 288 Ark. 532, 708 S.W.2d 67 (1986) (decision under prior law).

Where the foreign corporation did not demonstrate that the contract fell within the protection of the Commerce Clause of the United States Constitution, this state was not precluded from exercising its right to require the corporation to comply with former statute. North Am. Phillips Com. Elecs. Corp. v. Gaytri Corp., 291 Ark. 11, 722 S.W.2d 270 (1987) (decision under prior law).

The test to determine whether the threshold requirements for applicability of the penalty provisions of the Wingo Act have been met consists of two parts: first, it must be demonstrated that the contract was made by a nonqualifying foreign corporation which was “doing business” in the state; and second, it must be shown that the particular contract in question was made in this state. North Am. Phillips Com. Elecs. Corp. v. Gaytri Corp., 291 Ark. 11, 722 S.W.2d 270 (1987) (decision under prior law).

Defense.

Where the defendant attacks the right of a foreign corporation to do business, he must set up this defense in his answer, and when the defendant, by his answer, does attack the corporation's compliance, the burden of proof is upon the foreign corporation to show that it has met the statutory requirements. Miellmier v. Toledo Scale Co., 128 Ark. 211, 193 S.W. 497 (1917); Johnson v. Stuckey & Speer, Inc., 11 Ark. App. 33, 665 S.W.2d 904 (1984) (preceding decisions under prior law).

The defense that a contract is in violation of statute and thus void ab initio is an affirmative one required to be raised and pleaded. Leasing Assocs. v. Slaughter & Son, 450 F.2d 174 (8th Cir. 1971) (decision under prior law).

Doing Business.

In order to set up the Wingo Act as a defense, the party had to show that the foreign corporation was doing business in Arkansas. Dickson v. Delhi Seed Co., 26 Ark. App. 83, 760 S.W.2d 382 (1988) (decision under prior law).

A corporation was doing business in Arkansas within the meaning of the Wingo Act when it transacted some substantial part of its ordinary business in this state. Dickson v. Delhi Seed Co., 26 Ark. App. 83, 760 S.W.2d 382 (1988) (decision under prior law).

Enforcement of Contracts.

—In General.

Contract of noncomplying foreign corporation held unenforceable. J.R. Watkins Medical Co. v. Williams, 124 Ark. 539, 187 S.W. 653 (1916); Republic Power & Serv. Co. v. Gus Blass Co., 165 Ark. 163, 263 S.W. 785 (1924); S. Gumpert Co. v. Hernreich, 199 Ark. 376, 134 S.W.2d 568 (1939); B. & P., Inc. v. Norment, 241 Ark. 1092, 411 S.W.2d 506 (1967); S. & L. Painting Contractors v. Vickers, 267 Ark. 109, 589 S.W.2d 196 (1979); Snow v. C.I.T. Corp. of South, Inc., 278 Ark. 554, 647 S.W.2d 465 (1983) (preceding decisions under prior law).

A foreign corporation not qualified to do business in the state can enforce a contract in this state if the contract is made outside the state or if the contract calls for a transaction that is wholly within interstate commerce. Goode v. Universal Plastics, Inc., 247 Ark. 442, 445 S.W.2d 893 (1969); Consolidated Naturals, Inc. v. Wm. T. Thompson Co., 623 F. Supp. 458 (W.D. Ark. 1985); Germer v. Missouri Portland Cement Co., 301 Ark. 277, 783 S.W.2d 359 (1990).

Former statute was a “penal statute” which punished doing business without certification by creating an absolute defense against recovery on contracts which were deemed illegal if made in contravention thereof. Leasing Assocs. v. Slaughter & Son, 450 F.2d 174 (8th Cir. 1971) (decision under prior law).

In order for a contract to fall within the sanction of statute, the contracts must be made by a nonqualifying foreign corporation which has “done business” in the State, and must be made in Arkansas. Uncle Ben's, Inc. v. Crowell, 482 F. Supp. 1149 (E.D. Ark. 1980); Johnson v. Stuckey & Speer, Inc., 11 Ark. App. 33, 665 S.W.2d 904 (1984) (preceding decisions under prior law).

Failure of corporation to register to do business in the state did not bar the enforcement of contract where the contract provided it had to be accepted in another state. Bassett v. Hobart Corp., 292 Ark. 592, 732 S.W.2d 133 (1987) (decision under prior law).

Where the defendant was doing business in Arkansas in violation of the Wingo Act, and its operation was sufficiently localized in nature as to allow state regulation, the contract between the parties was unenforceable, and the related note and mortgage were invalid. Brogdon v. Exterior Design, 781 F. Supp. 1396 (W.D. Ark. 1992) (decision under prior law).

—Alternative Remedies.

Although the defendant was an unqualified corporation, and was therefore prohibited by statute from suing to enforce its contract, it was nevertheless entitled to rescind the contract and seek restitution. C.B. Int'l, Inc. v. Cook, 659 F.2d 862 (8th Cir. 1981) (decision under prior law).

Foreign corporations operating in violation of the Wingo Act have been allowed to recover in Arkansas based upon theories such as quasi-contract, which do not require use of the unenforceable contract to prove their case. Midland Dev., Inc. v. Pine Truss, Inc., 24 Ark. App. 132, 750 S.W.2d 62 (1988) (decision under prior law).

An assignee of a foreign corporation which failed to comply with the terms of the Wingo Act could recover under a theory of quantum meruit, because the court would not allow the plaintiffs to be unjustly enriched. Brogdon v. Exterior Design, 781 F. Supp. 1396 (W.D. Ark. 1992) (decision under prior law).

—Place of Making.

A foreign corporation may sue in the state to enforce contracts made in other states without complying with the statutory requirements for doing business. Graysonia, Nashville & Ashdown R.R. v. Newberger Cotton Co., 170 Ark. 1039, 282 S.W. 975 (1926) (decision under prior law).

Former statute applied only to contracts made in this state. United Press Int'l, Inc. v. Hernreich, 241 Ark. 36, 406 S.W.2d 317 (1966); United Press Int'l, Inc. v. Hernreich, 241 Ark. 33, 406 S.W.2d 322 (1966); Widmer v. J.I. Case Credit Corp., 243 Ark. 149, 419 S.W.2d 617 (1967); Wilkins v. M & H Fin., Inc., 476 F. Supp. 212 (E.D. Ark. 1979), aff'd, 621 F.2d 311 (8th Cir. 1980); Stacy v. St. Charles Custom Kitchens of Memphis, Inc., 284 Ark. 441, 683 S.W.2d 225 (1985) (preceding decisions under prior law).

A foreign corporation not admitted to do business in the state was not precluded from suing in the courts of the state on a contract made outside the state. Brown Broadcast, Inc. v. Pepper Sound Studios, Inc., 242 Ark. 701, 416 S.W.2d 284 (1967) (decision under prior law).

Statute did not apply to the making of a loan in a foreign state by a foreign corporation secured by a mortgage on Arkansas real estate with the foreign corporation having no Arkansas contracts other than those incidental to such loan. National Sur. Corp. v. Inland Properties, Inc., 286 F. Supp. 173 (E.D. Ark. 1968), aff'd, National Surety Corp. v. Inland Properties, Inc., 416 F.2d 457 (8th Cir. Ark. 1969) (decision under former law).

Where last act necessary for the completion of a contract was performed in another state, the contract was a foreign contract that could be enforced in Arkansas even though the foreign corporation was not qualified to do business in Arkansas under the statute. Rose's Mobile Homes, Inc. v. Rex Financial Corp., 383 F. Supp. 937 (W.D. Ark. 1974) (decision under prior law).

Statute did not apply to contracts where last act necessary to make the contracts binding occurred in other state. White River Valley Broadcasters, Inc. v. William B. Tanner Co., 487 F. Supp. 725 (E.D. Ark. 1979); Moore v. Luxor (N. Am.) Corp., 294 Ark. 326, 742 S.W.2d 916 (1988) (preceding decisions under prior law).

The fact that the contract for purchase of the real estate was to be closed in Arkansas would not make a contract entered into out of the State of Arkansas invalid. Leenerts Farms, Inc. v. Cranco, 265 Ark. 359, 578 S.W.2d 229 (1979) (decision under prior law).

Where final acceptance of a contract was made in another state, the contract was a foreign contract in interstate commerce and a foreign corporation could enforce it in the courts of Arkansas despite its status as a nonqualifying corporation. Hough v. Continental Leasing Corp., 275 Ark. 340, 630 S.W.2d 19 (1982) (decision under prior law).

—Subsequent Compliance.

Fact that a foreign corporation, which executed a contract in the state, without complying with state laws as to doing business, subsequently complied with statute gave it no right to enforce such contract. Republic Power & Serv. Co. v. Gus Blass Co., 165 Ark. 163, 263 S.W. 785 (1924) (decision under prior law).

Where a contract, complete in itself, had been entered into between a resident and a foreign corporation after the date of its domestication, it was valid and enforceable, even though an unenforceable but valid contract between the resident and undomesticated foreign corporation provided the basis for the contract. Jack Tar of Ark., Inc. v. National Wells Television, Inc., 234 Ark. 306, 351 S.W.2d 848 (1961) (decision under prior law).

—Subsequent Holders.

Where an unqualified foreign corporation accepts notes and mortgages, its assignee cannot sue on such notes and mortgages, the defect is inherent and all subsequent purchasers take with notice of the defect. Hogan v. Intertype Corp., 136 Ark. 52, 206 S.W. 58 (1918); Dean v. Caldwell, 141 Ark. 38, 216 S.W. 31 (1919) (preceding decisions under prior law).

Former statute had to be complied with to enable even an assignee to enforce an executory contract. Republic Power & Serv. Co. v. Gus Blass Co., 165 Ark. 163, 263 S.W. 785 (1924) (decision under prior law).

There can be no holder in due course of a negotiable instrument arising out of an illegal transaction under state law. Pacific Nat'l Bank v. Hernreich, 240 Ark. 114, 398 S.W.2d 221 (1966) (decision under prior law).

Statute was applicable to assignees of unenforceable contracts entered into in the state by foreign corporations not qualified to do business in the state. Union Planters Nat'l Bank v. Moore, 250 Ark. 272, 464 S.W.2d 786 (1971) (decision under prior law).

—Validity of Contract.

Where a foreign corporation doing business in the state failed to comply with former statute, any contracts made by it were not void but merely unenforceable. Hicks Body Co. v. Ward Body Works, Inc., 233 F.2d 481 (8th Cir. 1956); Pratt Lab., Inc. v. Teague, 160 F. Supp. 176 (W.D. Ark. 1958); Pellerin Laundry Mach. Sales Co. v. Hogue, 219 F. Supp. 629 (W.D. Ark. 1963). But see Pacific Nat'l Bank v. Hernreich, 240 Ark. 114, 398 S.W.2d 221 (1966); Union Planters Nat'l Bank v. Moore, 250 Ark. 272, 464 S.W.2d 786 (1971); Worthen Bank & Trust Co. v. United Underwriters Sales Corp., 251 Ark. 454, 474 S.W.2d 899 (1971), superseded by statute as stated in, Johnny's Pizza House, Inc. v. Huntsman, 311 Ark. 346, 844 S.W.2d 320 (1992) (preceding decisions under prior law).

Contracts entered into in the state by foreign corporation doing business in contravention of former statute were not merely unenforceable but are void ab initio. Pacific Nat'l Bank v. Hernreich, 240 Ark. 114, 398 S.W.2d 221 (1966); Union Planters Nat'l Bank v. Moore, 250 Ark. 272, 464 S.W.2d 786 (1971); Worthen Bank & Trust Co. v. United Underwriters Sales Corp., 251 Ark. 454, 474 S.W.2d 899 (1971), superseded by statute as stated in, Johnny's Pizza House, Inc. v. Huntsman, 311 Ark. 346, 844 S.W.2d 320 (1992) (preceding decisions under prior law).

Jurisdiction.

Service upon president of foreign corporation authorized to do business in state but not in fact doing business in the state did not give federal district court jurisdiction of suit by foreign corporation against defendant corporation where suit was based on contract between parties arising in another state. Groves, Lundin & Cox, Inc. v. Oklahoma-Arkansas Tel. Co., 104 F. Supp. 381 (W.D. Ark. 1952) (decision under prior law).

Where action which was brought in one county against foreign corporations authorized to do business in this state had arisen in Oklahoma and summonses were served upon agents designated by such corporations as those upon whom summons could be served, the circuit court had jurisdiction over the subject matter of the action. Deason v. Groendyke Transp., Inc., 176 F. Supp. 346 (W.D. Ark. 1959) (decision under prior law).

Equity will not take jurisdiction to grant relief when there is an adequate and complete remedy at law. Certiorari in the circuit court was the available remedy to review the decision of an administrative board where it was claimed that the board had exceeded its jurisdiction or proceeded illegally and when there was no appeal provided by statute. Consumers Coop. Ass'n v. Hill, 233 Ark. 59, 342 S.W.2d 657 (1961) (decision under prior law).

Penalty.

There was a two-part test to determine whether the threshold requirements for application of the penalty provisions of the Wingo Act had been met: first, it had to be demonstrated that the contract was made by a nonqualifying foreign corporation which was “doing business” in the state; and second, it had to be shown that the particular contract in question was made in Arkansas. Further, if it was raised as a defense, the court had to consider whether the commerce clause of the United States Constitution precluded application of the sanctions of the penalty provision. Dickson v. Delhi Seed Co., 26 Ark. App. 83, 760 S.W.2d 382 (1988) (decision under prior law).

Permissible Suits.

A foreign corporation has the right to sue for damages to its property even though such property may have been acquired by the corporation in the transaction of business without complying with the statutory requirements. St. Louis, Ark. & Tex. Ry. v. Fire Ass'n of Philadelphia, 60 Ark. 325, 30 S.W. 350 (1895) (decision under prior law).

Former similar provision held not applicable to suit to quiet title since in so doing the noncomplying corporation was not seeking to enforce any demand growing out of a contract with or tort committed by the other party to the action. Rachels v. Stecher Cooperage Works, 95 Ark. 6, 128 S.W. 348 (1910) (decision under prior law).

A foreign corporation authorized to do business in the state may maintain an action for the benefit of one not having such authority. Graysonia, Nashville & Ashdown R.R. v. Newberger Cotton Co., 170 Ark. 1039, 282 S.W. 975 (1926) (decision under prior law).

A foreign corporation, even though unlicensed, is nevertheless permitted to bring suit to protect its property as long as the suit does not unavoidably involve the enforcement of a prohibited contract. Ark. Airmotive Div. of Currey Aerial Sprayers, Inc. v. Ark. Aviation Sales, Inc., 232 Ark. 354, 335 S.W.2d 813 (1960); Pellerin Laundry Mach. Sales Co. v. Hogue, 219 F. Supp. 629 (W.D. Ark. 1963) (preceding decisions under prior law).

The test to determine whether an unlimited foreign corporation is entitled to recover or not, is its ability to establish its case without any aid from illegal transaction; if its right to recover depends on the contract which is prohibited by statute, and that contract must necessarily be proved to make out its case, there can be no recovery. Ark. Airmotive Div. of Currey Aerial Sprayers, Inc. v. Ark. Aviation Sales, Inc., 232 Ark. 354, 335 S.W.2d 813 (1960) (decision under prior law).

There was no authority to support the proposition that a foreign corporation could not enforce a valid obligation of a resident corporation on a note and mortgage simply because the foreign corporation no longer was a registered foreign corporation doing business in Arkansas. Wild Turkey Ranch, Inc. v. Wilhelm Nursing Home, Inc., 12 Ark. App. 392, 677 S.W.2d 871 (1984) (decision under prior law).

Where foreign corporation, at time of filing suit, was transacting business in the state without a certificate of authority, it was necessary for corporation to obtain a certificate of authority to transact business in this state before it could maintain suit. Centennial Valley Ranch Management, Inc. v. Agri-Tech Ltd. Partnership, 38 Ark. App. 177, 832 S.W.2d 259 (1992).

Presumptions.

Until the contrary appears, the law will presume a foreign corporation doing business in the state has complied with the law. St. Louis, Ark. & Tex. Ry. v. Fire Ass'n of Philadelphia, 55 Ark. 163, 18 S.W. 43 (1891) (decision under prior law).

Stay of Proceedings.

A stay of proceedings to permit a foreign corporation which should have obtained a certificate of authority but failed to do so is to be liberally granted. Johnny's Pizza House, Inc. v. Huntsman, 311 Ark. 346, 844 S.W.2d 320 (1992).