California Foreign LLC Registration: Everything You Need to Know
California foreign LLC registration is a question that comes up for businesses that conduct some of their business in California. 3 min read
California foreign LLC registration is a question that comes up for businesses that conduct some of their business in California.
What is a Foreign LLC?
If an LLC is formed in a state other than California, it is considered a foreign LLC to the state of California. Foreign refers to another state rather than another country. Domestic LLCs are companies that are formed in the same state where they intend to do business. This term is used in states throughout the US. A company formed in Ohio would be a domestic LLC in the state of Ohio, but it would be a foreign LLC in the state of Washington.
Transacting Business in California
All foreign LLCs must register with the state of California in order to do business there. The nature of transacting business is not specifically defined in this state and many other states.
You can gain a lot of clues from the regulations around when businesses are required to collect state sales tax. A business must have a physical presence in the state in order to be required to collect state taxes from its residents. A physical presence (or nexus) can be defined as:
- Having a retail store or physical location in that state.
- Owning a warehouse in the state or having a sales rep within the state.
- Having an office and employees within the state.
Of course, things can get more complicated than that; the prevalence of online sales has made these laws more difficult to implement. However, the above gives you guidelines for when you may need to register as a foreign LLC in the state where you do business.
Exempted Activities When Transacting Business in California
Within California's LLC Act, you will find activities that specifically do not count as transacting business within the state.
Some of these are:
- Holding a business bank account within the state.
- Acquiring debts within the state.
- Using an in-state office to handle securities.
- Being involved in a lawsuit, either as a defendant or prosecutor.
- Conducting business affairs, such as meetings.
- Selling your product or service through an independent contractor.
- Conducting interstate business deals or conducting a one-off business transaction that is completed in less than 180 days and is not set to recur.
How to Register a Business in California
In order to register your business with the state of California, start by filing an application to register your foreign LLC. You can get the application from the California Secretary of State (SOS) website.
Information on the foreign LLC application should closely match the information you provided when registering your business in your home state. The following will be required:
- The name of the LLC, which should match the name registered in the home state.
- An alternate name, if the name registered in your home state is already taken in California or is deemed to be too similar to the name of an existing LLC in California. The name may also be altered if it doesn't include the words LLC or Limited Liability Company in the home state
- The date and state where the LLC was initially formed.
- Certification that the business entity is legally registered in another state already.
- The contact details for a registered agent within California.
- A certification that the Secretary of State in California can act as the registered agent if there is no available representative for the business in California.
- The street address for the company's main office, both in the home state and in California (if applicable.)
- The mailing address of these locations, if they differ from the street address.
- A valid signature.
Include a copy of your certificate of good standing along with your application. It must be current, which means it should have been issued in the past 6 months by your home state's Secretary of State.
You may include a second copy of the application, which will be certified and returned to the business owner for a $5 charge. Applications can be mailed or submitted in person, and the fee for filing is $70. In-person applications receive a $15 surcharge. More information is available on the SOS' website.
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