On October 6, 2026, Justice Reed of the New York County Commercial Division issued a decision in Webb v. Infusion Capital Group LLC, 2026 NY Slip Op. 51679(U), holding that an LLC may avoid the need to register in New York before bringing suit by assigning its claims to an individual, explaining:
Here, defendants assert that, according to records maintained by the Florida Division of Corporations, RP Palm Beach is a Florida limited liability company. Under New York’s Limited Liability Company Law §808(a), a foreign limited liability company may not maintain an action in New York if it is doing business in the state without having received a certificate of authority. Defendants insist that plaintiff is unquestionably doing business in New York and may not maintain this action. However, defendants provide no evidence or factual details to support its assertion that RP Palm Beach, the LLC, is unquestionably doing business in New York. Although plaintiff does not dispute whether RP Palm Beach does, in fact, do business in New York, or not, defendants’ bare and conclusory allegation is insufficient to challenge standing pursuant to NYLLCL 808(a).
It is important to note that the statutory prohibition against doing business without a certificate of authority does not impair the validity of any contract or act by the foreign limited liability company. Plaintiff argues that RP Palm Beach’s capacity is irrelevant and that the statute is inapplicable here because John Webb is a natural person who is an assignee of RP Palm Beach’s claims. The assignment is attached to the amended complaint as an exhibit, stating that assignor RP Palm Beach irrevocably transferred its right, title, and interest to all claims and defenses, including rights to declaratory relief, that it may have against any merchant cash advance provider, funder, or lender, arising from any agreement entered into by the assignor before the date of assignment.
The amended complaint is clear that plaintiff brings this action in two capacities: (a) individually, as guarantor of the future receivables purchase agreement, and (b) as assignee of all claims, counterclaims, and defenses held by RP Palm Beach. Furthermore, the complaint cites Traktman v City of New York (182 AD2d 814 [2d Dept 1992]) and Kinlay v Henley (57 AD3d 219 [1st Dept 2008]), supporting John Webb’s authority to appear as assignee of RP Palm Beach’s claims. Defendants contend that plaintiff’s reliance on Traktman and Kinlay is misplaced and insufficient to defeat dismissal, arguing that the cases do not involve assignments created to bypass counsel requirements, nor situations where the assignor remains the true party in interest. This contention is unavailing.
In Traktman, the Second Department upheld an assignment from a corporation to an individual pro se litigant, expressly stating that the statutory prohibition against a corporation appearing pro se does not extend to an assignee of a corporation, despite the fact that the assignment may have been made to circumvent the statutory prohibition. Likewise, in Kinlay, the First Department recognized that an assignee may obtain all the corporation’s claims and proceed pro se, deeming such an assignment a perfectly legitimate tactic to avoid CPLR 321(a).
The limited circumstances in which courts found a lack of standing arises from invalid assignments, not from strategic motivations. For example, in Ficalora v Town Board Government of East Hampton (276 AD2d 666 [2d Dept 2000]), the court found that there was no valid assignment where, as in that action, the complaint expressly designated plaintiff, a non-attorney, to represent the corporation for purposes which the corporation was established. Similarly, in Nieblas-Love v NYCHA (212 AD3d 509 [1st Dept 2023]), the First Department held the individual plaintiff lacked standing because the assignment was ineffective, as it expressly excluded assignment of the corporation’s claims. In Wah Win Group Corp. v 979 Second Avenue LLC (246 AD3d 607 [1st Dept 2026]), standing failed where there was no evidence that the corporation assigned its claims to its non-attorney manager appearing as plaintiff.
By contrast, this record reflects an assignment of RP Palm Beach’s claims to John Webb and is unambiguous as to the scope of the claims assigned. Defendants cite no provision in the future receivables purchase agreement or other related agreements that restrict assignability of the claims asserted here. Under General Obligations Law §13-101, all claims are freely assignable absent such a restriction, and defendants offer no contrary authority. Its sole objection is that the assignment served a litigation purpose. However, both Traktman and Kinlay confirm that an assignment designed to avoid CPLR 321(a) is permissible.
(Internal quotations and citations omitted).