Colorado § 7-71-102 - Consequences for failure to have effective statement of trade name filed.

§ 7-71-102. Consequences for failure to have effective statement of trade name filed.

(1) No person transacting business in this state under a name in violation of section 7-71-101, nor anyone on its behalf, shall be permitted to maintain a proceeding in any court in this state for the collection of a debt from another with whom or with which the person transacted business in violation of section 7-71-101 until an effective statement of trade name for such name is on file in the records of the secretary of state in accordance with this article.

(2) A person that transacts business in this state under a name in violation of section 7-71-101 shall be subject to a civil penalty not to exceed five hundred dollars. The civil penalty may be recovered in an action brought by the attorney general in the district court in and for the city and county of Denver and shall be transmitted to the state treasurer, who shall credit it to the general fund. Upon a finding by the court that a person, or any of its members, managers, or agents on its behalf, has transacted business in this state under a name in violation of section 7-71-101, the court may issue, in addition to or in lieu of the imposition of a civil penalty, an injunction restraining the further transaction of business in this state by the person and such members, managers, and agents under such name until the person has complied with the provisions of this article.

(3) Notwithstanding subsection (1) of this section, transacting business in this state by a person under a name in violation of section 7-71-101 does not impair the validity of the acts of the person at any time taken, affect title to any property or interest in property owned by the person, or prevent the person from defending any proceeding in this state at any time.

Source: L. 2004: Entire article R&RE, p. 1538, § 1, effective May 30, 2006.

Editor's note: This section is similar to former § 7-71-102 as it existed prior to 2006.

ANNOTATION

Law reviews. For article, "One Year Review of Corporations, Partnerships, and Agency", see 36 Dicta 27 (1959).

Annotator's note. Since § 7-71-102 is similar to § 7-71-102 as it existed prior to the 2006 repeal and reenactment of this article, relevant cases construing that provision have been included in the annotations to this section.

Former section was penal. Wallbrecht v. Blush, 43 Colo. 329, 95 P. 927 (1908); Campbell v. Graham, 144 Colo. 532, 357 P.2d 366 (1960).

And so this section had to be strictly construed. Wallbrecht v. Blush, 43 Colo. 329, 95 P. 927 (1908); Savage v. United States, 270 F. 14 (8th Cir 1920).

Rather, the penalty provided by this section for failure to file the certificate is that such persons, associations, and corporations so trading and doing business shall not be permitted to prosecute any suits for the collection of their debts until such affidavit shall be filed. Admiral Corp. v. Trio Television Sales & Serv., Inc., 138 Colo. 157, 330 P.2d 1106 (1958); Campbell v. Graham, 144 Colo. 532, 357 P.2d 366 (1960).

So when failure to comply with this section appears, an abatement of an action occurs. Admiral Corp. v. Trio Television Sales & Serv., Inc., 138 Colo. 157, 330 P.2d 1106 (1958); Campbell v. Graham, 144 Colo. 532, 357 P.2d 366 (1960).

Subsequently, when an affidavit is filed, this disability is removed, and plaintiff is free to prosecute the action as originally filed. Admiral Corp. v. Trio Television Sales & Serv., Inc., 138 Colo. 157, 330 P.2d 1106 (1958); Campbell v. Graham, 144 Colo. 532, 357 P.2d 366 (1960).

In any event this section only applies to suits for the collection of debts due a firm. Pedroni v. Eppstein, 17 Colo. App. 424, 68 P. 794 (1902); Melcher v. Beeler, 48 Colo. 233, 110 P. 181 (1910).

Thus it does not apply to suits for torts. Pedroni v. Eppstein, 17 Colo. App. 424, 68 P. 794 (1902); Melcher v. Beeler, 48 Colo. 233, 110 P. 181 (1910).

Or to recover possession of real property. The filing of the prescribed affidavit required by this section is not a condition precedent to the prosecution of an action to recover possession of real property. Wallbrecht v. Blush, 43 Colo. 329, 95 P. 927 (1908); Campbell v. Graham, 144 Colo. 532, 357 P.2d 366 (1960).

Moreover, since this section is procedural, it has no proper place in a bankruptcy proceeding. In re Thomas, 211 F. Supp. 187 (D. Colo. 1962), aff'd, 327 F.2d 667 (10th Cir. 1964).

This section does not expressly deprive the associations of the right to transact business. Wallbrecht v. Blush, 43 Colo. 329, 95 P. 927 (1908); Savage v. United States, 270 F. 14 (8th Cir. 1920).

Applied in B.C. Inv. Co. v. Throm, 650 P.2d 1333 (Colo. App. 1982).