Bryan Cohen Jul. 16, 2013, 6:35pm

HARTFORD, Conn. (Legal Newsline) -- Connecticut Attorney General George Jepsen and Secretary of State Denise Merrill announced Tuesday that their offices collected $1.3 million in penalties from out-of-state companies during fiscal year 2013.

The joint effort resulted in $1,300,208.66 in penalties from companies operating in Connecticut without legal authority to transact business.

The penalties were paid by 261 out-of-state firms and represented a slight decrease from the total fines collected the previous fiscal year.

"Often, out-of-state companies are not aware that they must register before conducting business in Connecticut," Jepsen said in a statement. "Registering with the state provides consumers with a layer of protection and helps ensure that all businesses are operating on a level playing field.

"Through joint enforcement with the secretary of the state, it's my hope that we can educate out-of-state companies so that those operating honestly and in good faith -- and by far the vast majority of businesses do just that -- can transact legally and openly in our state."

Connecticut law requires many companies formed outside of the state to obtain a certificate of authority from Merrill's office and paying the required fee before transacting business in the state. About 50,000 entities properly filed the paperwork with Merrill's office.

Businesses must obtain authority to do business in Connecticut to protect domestic organizations from unfair competition. The law also protects consumers by requiring businesses to appoint an agent for services of process in the state to accept legal papers if court action is taken.

Companies in violation of the law face a fine of $300 for each month the company transacts business in the state without legal authority. Some business corporations are also required to pay the annual license fee for years they should have been registered. Out-of-state companies also must file a yearly annual report with the Secretary of State's Office.

The joint, multi-year enforcement effort between Jepsen's and Merrill's offices have resulted in the aggressive pursuit of thousands of delinquent out-of-state businesses.

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