Since the Quad Cities is a community which is split into two states, we often have "jurisdictional" problems. One common problem is when a corporation or LLC sells real estate in a state in which it is not authorized to do business. In other words, an Iowa corporation sells real estate in Illinois without being authorized to do business in Illinois.
In Illinois a corporation does not need to be authorized to do business in Illinois if all it does is buy and sell real estate. Buy it and sell it. That's it. As soon as it does anything to the property, the rules change. The problem arises when that corporation "transacts business" in Illinois. For example, if Iowa Property, Inc. buys a lot in Illinois, then builds a house on that lot, Iowa Property, Inc. needs to be authorized to do business in Illinois. Similarly, if Iowa Property, Inc. buys a house or building in Illinois and then fixes it up, it also needs to be authorized to do business in Illinois. In both of these examples, Iowa Property, Inc. is transacting business in Illinois and therefore needs to be authorized to do business in Illinois.
If Iowa Property, Inc. is not authorized to do business in Illinois when it buys property, improves it, and then sells it, all of the franchise tax, income tax, and registration fees it would have owed had it been paying its fair share become liens against any real estate it owns in Illinois. So essentially, if an attorney or title company allows the Iowa corporation to sell this real estate, the buyer could end up being responsible for this lien.
I have had numerous "stern discussions" with Iowa attorneys regarding this. I will never let my buyer-client purchase property from a corporation not authorized to do business in Illinois, when it should have been authorized to do business in Illinois. It is a simple enough process to check--www.cyberdriveillinois.com will tell you whether or not a corporation or LLC is authorized to do business in Illinois. Unfortunately, I see attorneys and title companies allow this to slide by all the time. They succeed in failing their clients.