Contracts at Risk: How Being an Unregistered Foreign Entity in Florida Could Void Your Agreements

Expanding your business into Florida can be an exciting move, one that opens new opportunities for growth, clients, and partnerships. But for many foreign or out-of-state companies, expansion comes with hidden legal risks that can threaten those very opportunities. One of the biggest pitfalls? Entering into contracts that may be legally unenforceable in Florida because your business hasn’t properly registered to do business here.

At Ayala Law, we’ve seen this issue surface often in commercial litigation, and the consequences can be serious. Below, we’ll explain how and why contracts may be deemed void or unenforceable, what Florida law says about foreign entities doing business in the state, and what steps you should take before expanding.

Can a Foreign or Out-of-State Company Do Business in Florida?

Under Florida Statute § 607.1501, any corporation or limited liability company formed outside of Florida, whether in another U.S. state or a foreign country, must register as a “foreign entity” before conducting business in Florida.

This registration process, often called foreign qualification, involves filing with the Florida Division of Corporations and designating a registered agent within the state. Without this registration, your business is technically not authorized to operate in Florida.

So, what happens if you skip this step but still sign contracts, open offices, or start doing business here?

What Happens If You Don’t Register Your Business in Florida

If your foreign entity operates in Florida without proper registration, you lose the legal right to enforce contracts in Florida courts.

That means if a Florida client, partner, or vendor breaches a contract you signed, you may not be able to sue them here until your business becomes properly registered, and even then, you may face penalties, fines, and a weakened legal position.

To put it plainly:

• You can be sued in Florida courts,
• But you cannot sue to enforce your own contracts until your entity complies with Florida’s foreign registration requirements.

This creates a major power imbalance for unregistered companies and can lead to devastating financial and legal outcomes.

When Can a Contract Be Considered Legally Void in Florida?

A contract may be deemed void or unenforceable when one of the parties, such as a foreign business, is not legally authorized to operate in Florida.

Here’s how it can play out:

• You sign a service or supply contract with a Florida company.
• That company defaults or fails to pay.
• You attempt to enforce the contract in court.
• The defendant argues that your company wasn’t legally registered to do business in Florida at the time the contract was signed.
• The court may dismiss your case or refuse to enforce the contract.

Even worse, you might still be bound by other parts of the agreement, including liability provisions or obligations you owe, leaving you exposed but unable to collect what’s due to you.

Common Mistakes Foreign Businesses Make When Expanding to Florida

We often see businesses run into avoidable issues because they:

• Assume that registering their U.S. entity in another state is enough to operate nationwide.
• Use existing contracts without updating governing law or venue clauses to align with Florida law.
• Hire employees, lease property, or sell products in Florida without realizing these activities qualify as “doing business” under Florida’s statutes.

Even seemingly minor details, like opening a Florida bank account or appointing local contractors, can trigger the need for registration.

How to Fix or Prevent Legal Issues with Your Contracts

If your company is already operating in Florida but not registered, the first step is to remedy your compliance issue by registering with the Florida Division of Corporations. This often includes:

• Filing an Application for Authorization to Transact Business in Florida.
• Paying the applicable filing fees.
• Designating a registered agent located within the state.

Once properly registered, you may regain the right to enforce your contracts. However, registration alone does not automatically fix past issues, so it’s critical to consult with an attorney who can assess whether your prior agreements are still enforceable.

Our attorneys at Ayala Law regularly assist foreign and out-of-state businesses with:

• Reviewing and redrafting contracts to meet Florida’s legal standards.
• Resolving disputes arising from unregistered operations.
• Advising on entity formation, registration, and compliance strategies..

Final Thoughts

Expanding your company into Florida is a smart business move, but only if you do it right. A failure to comply with Florida’s foreign registration laws can undermine even the best business relationships and render key contracts legally void.

At Ayala Law, we help foreign and out-of-state companies protect their interests as they enter the Florida market. Whether you need contract review, business registration, or litigation support, our attorneys are here to guide you.

Before signing or performing under any contract in Florida, contact one of our experienced attorneys in Miami at 305-570-2208.

You can also contact our founding attorney Eduardo A. Maura at eduardo@ayalalawpa.com.

Schedule a case evaluation online here.

[The opinions in this blog are not intended to be legal advice. You should consult with an attorney about the particulars of your case].