I am often approached by entrepreneurs looking to start a business. They frequently ask if there’s any benefit to forming an LLC (limited liability company) in another state outside of California. Each situation is different, but if you live in California or plan to operate in California, forming an out-of-state entity still means you’ll need to register as a foreign LLC in California. If you are a foreign LLC that intends to conduct business in California, then you are required to register with the California Secretary of State.
A foreign LLC is any LLC that was formed outside of California, regardless of whether it is formed in another state or another country. If your LLC is “doing business” in California, then you must register as a foreign LLC.
But what does it mean to be “doing business” in California? “Doing business” in California is defined broadly, and includes activities such as selling goods or services, holding property, or maintaining a physical presence in the state. You should always consult with an attorney to determine if your LLC meets the criteria for doing business in California and if registration is required.
If you do need to register your foreign LLC in California, you will need to file a Registration of Foreign Limited Liability Company form with the California Secretary of State and pay a filing fee. After registration, you will be required to maintain certain records and comply with California’s ongoing filing and tax obligations for foreign LLCs.
Should your foreign entity register in California? Schedule a consult today: https://calendly.com/alessahuber/15min
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