Bryan Cohen Jul. 14, 2014, 7:43pm

HARTFORD, Conn. (Legal Newsline) - Connecticut Attorney General George Jepsen and Secretary of State Denise Merrill announced on Friday that their offices collected more than $1.6 million in penalties last year from out-of-state companies operating unlawfully in Connecticut.

During fiscal year 2014, Jepsen and Merrill's offices collected $1,621,053.66 in penalties from companies operating in Connecticut without legal authority to transact businesses. The figure represented a 25 percent increase from the total fines collected during the previous fiscal year.

"Often, out-of-state companies are not aware that they must register before conducting business in Connecticut," Jepsen said. "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."

State law requires statutory trusts, limited liability partnerships, limited liability companies, limited partnerships, nonstock corporations and business corporations formed outside of Connecticut to obtain a certificate of authority from the Secretary of State's office and pay a fee before conducting business in the state. Approximately 50,000 out-of-state entities have properly filed with Merrill's office.

The requirement protects domestic organizations from unfair competition and places domestic and foreign organizations on equal ground. The law also protects consumers with grievances against out-of-state firms by requiring businesses to appoint an agent for service of process in the state to accept legal papers if court action is taken.

Companies that violate the law face up to a $300 fine for each month the company is transacting business in Connecticut without legal authority, as well as an annual license fee for years they should have been registered with Merrill's office.

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