“A corporation’s capacity to maintain a legal action and to be sued derives from the rule that a corporation has all of the powers of a natural person in carrying out its business. [Corp. Code, §§ 18, 207; Code Civ. Proc., § 17 (“person” includes corporation)] Further, Corp. Code § 105 provides that a corporation or association may be sued as provided in the Code of Civil Procedure. A de facto corporation also is entitled to sue and be sued unless dissolved in quo warranto proceedings brought by the Attorney General.
A foreign corporation can commence an action but cannot maintain an action or proceeding relating to its business in California unless it is in compliance with specified qualification requirements. [Corp. Code, §§ 2105, 2203, subd. (c)] However, a foreign corporation’s capacity to be a defendant and to defend is unaffected by its failure to comply with qualification requirements. [United Medical Management Ltd. v. Gatto, 49 Cal. App. 4th 1732, 57, 57 Cal. Rptr. 2d 600 (2d Dist. 1996); for discussion of foreign corporations.]
Capacity to sue in federal court, however, is a different matter, governed by Rule 17(b) of the Federal Rules of Civil Procedure. In Southern California Darts Ass’n v. Zaffina, 762 F.3d 921, 112 U.S.P.Q.2d 1326 (9th Cir. 2014) the Ninth Circuit Court of Appeals found that although the plaintiff corporation’s powers had been suspended many years before, it had been functioning since as an unincorporated association. The suspension of the original corporation’s powers did not extinguish its ability to pursue federal claims in federal court under Rule 17(b)(3)(A). Moreover, even if it had failed unlawfully to pay taxes, that misconduct was unrelated to the federal trademark laws, the court held. Since even though the original corporation became defunct, there was no evidence that it had abandoned its trademarks, the court held it could bring suit.”
[California Civil Practice Business Litigation [certain citations omitted]]
