Legal Definitions - door-closing statute

A door-closing statute is a law in a state that restricts or denies access to local courts unless certain conditions are met. For example, a foreign corporation may be required to "qualify" before doing business in the state. This means they must register with the secretary of state, pay a fee or tax, and appoint an agent to receive legal documents.

For instance, let's say a company from Canada wants to do business in California. California has a door-closing statute that requires foreign corporations to qualify before they can access local courts. The company must register with the secretary of state, pay a fee, and appoint an agent to receive legal documents. Only then can they do business in California and have access to local courts.

Another example is a door-closing statute in Texas that requires out-of-state plaintiffs to post a bond before they can file a lawsuit in Texas courts. This bond is meant to cover the defendant's legal fees if the plaintiff loses the case. This makes it harder for out-of-state plaintiffs to sue in Texas courts.