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JOHN EDSON BRADY
THE BUSINESS LAW JOURNAL COMPANY
71-73 MURRAY STREET
NEW YORK CITY
JOHN EDSON BRADY, Editor
Corporation Penalized for Failure to File Annual Report
\HE statutes of the different states provide that every corporation shall file certain reports or certificates at specified
times, and they usually provide penalties for a failure to comply. As a general rule, the requirements and penalties with respect to domestic corporations, that is, corporations organized under the laws of the state, are less severe than those dealing with foreign corporations, that is, corporations organized under the laws of other states and doing business within the state.
Under some of these statutes a corporation which fails to do what is required of it will not be allowed to maintain any suit in the courts of the state; under others the corporation and its agents are subjected to a fine; and some go so far as to make the officers and agents personally liable for the debts of the corporation. Taking these various penalties into consideration, the importance of following the statutory provisions in the matter of making reports becomes apparent. A case involving a statute of this character, in which a corpora
penalized for failing to file its annual report, was decided recently by the Supreme Court of Michigan. The case is Detroit United Fruit Auction Co. v. Kroger Grocery & Baking Co., 198 N. W. 947.
The action was brought by the fruit company (a Michigan corporation) against the grocery company to recover $1,171.50, the price of 330 boxes of grapefruit, including terminal charges.
One of the defenses interposed by the grocery company was that the fruit company had not filed its report with the secretary of state, as required by Section 9028, C. L. 1915.
This statute required each corporation to file its report annually with the secretary of state during January or February. It provided the following penalty for a failure to comply with its terms: