The registration of a business, known in many circles as a business operating permit is generally a local government area of regulation. So in states like Georgia, state law rarely gets involved with the matter, leaving it to cities and county governments to manage such topics. Clearly, the local government and state where the business registers for a license then has the ability to hold the business owner legally responsible for the activity of his company, otherwise known in legal circles as “jurisdiction.”
However, some believe that if they register a business in one state, say Alabama, and then operate in Georgia, the business can only be sued in an Alabama state court and not Georgia. This is not true. First off, under the Constitutional law of interstate commerce, any business operating between two states falls under federal jurisdiction and can be sued in federal court as a result from anywhere in the country. So being based in one state and functioning in another provides no protection under federal jurisdiction.
In addition, if a business operates in Georgia, for example, but is based in another state, that company can still be sued in Georgia if it establishes any assets (i.e. bank accounts) or offices of operation in Georgia. So while the business operating permit was generated by a city or county in Alabama it makes no difference, and the business can be subpoenaed into a Georgia court if the company has an office or legal presence in Georgia and vice versa.
We work with clients to organize and register businesses in Georgia. If you would like additional information regarding this process, please feel free to contact Grissom Law, LLC at 678-781-9230.
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