Question

Certificate of Authority. Armour Pipe Line Company assigned leases to its existing oil wells in Texas to Sandel Energy, Inc. The assignment included royalties for the oil produced from the wells. Armour specified that the assignment “does not pertain to production attributable to these leases from any new wells,” reserving for itself an interest in those royalties. Later, Armour—a foreign corporation in Texas—forfeited its certificate of authority to do business in the state. More than three years later, the certificate was reissued. Meanwhile, new wells were drilled on the leases. Sandel filed a suit in a Texas state court against Armour, claiming that the reservation of a royalty interest in those wells was “ineffective” because of the temporary forfeiture. When and why does a corporation need a certificate of authority? Is Armour entitled to the royalties from the new wells?

Answer 1

Certificate of authority which is also called as foreign qualification is a document that's provides other states which is apart from the one in which your business has been established or registered all of the important information regarding official name owners name legal status company corporation partnership liability a register in the certificate authority of foreign qualification. I would like to clarify here that the company that are using transact intrastate business like sales representative required this document certificate authority.

Now one thing is that if if anyone of you are intended to do business outside of the state in which your enterprises has been register then you must need certificate authority for doing it in a legal manner it is by jurisdiction process. Now if the armour is going for the drilling of the Wells in the same state then they does not required certificate of authority but in some different state then it required. I think armour can take the royalty of the new Wells because in the earlier leases it was not mention that the production will be not done from the new oil wells it was by some specific wells for sandal energy in Texas.