Foreign LLC Registration California: Everything You Need to Know
Are you considering foreign LLC registration in California? If you are planning to conduct business in California but reside outside of the state, here is what you need to know about foreign LLCs. 3 min read
2. CA LLC Act: Transacting Business in California
3. CA Certificate of Registration
4. Cost in Registering Foreign LLC in California
Updated November 6, 2020:
Are you considering foreign LLC registration in California? If you are planning to conduct business in California but reside outside of the state, here is what you need to know about foreign LLCs.
California Foreign Limited Liability Company (LLC)
If your LLC was formed in another state, then within the state of California it will be seen as a foreign LLC. This means that in order to be considered 'foreign,' your LLC does not need to be formed in another country. In comparison, a domestic LLC is treated as such when the company is formed in the state that it conducts business. For example, if an LLC was formed in Texas it is a foreign LLC in New York.
CA LLC Act: Transacting Business in California
In accordance with California's LLC Act, a company located outside of the state that conducts business within the state is required to register as a foreign company. When a company has a physical presence in the state, they will be required to collect state sales tax. 'Physical presence' means that a company needs to have a warehouse, a store, an office, or a sales representative within California.
There are some exceptions, including:
- Defending or settling a lawsuit
- Having a bank account in the state
- Dealing with internal LLC affairs
- Having an office, person, or agency in the state that handles your LLC's securities
- Selling through independent contractors
- Securing or collecting debts
To access a more comprehensive list of items, please refer to Section 17708.03 of the California Corporations Code. If the only activity you conduct in the state of California is one of the listed items, then you will not need to register. If you are unsure, it is recommended that you seek a professional opinion.
CA Certificate of Registration
When registering a business in California, the owner needs to file an application to register a foreign limited liability company (LLC). This will be done through the California Secretary of State (SOS). To complete this process, the LLC must provide information that is similar to what would be provided in an LLC's home state. This includes:
- The name of your LLC as registered in the state it was formed
- An optional alternate name that your LLC would use in California if your original name is already in use
- The state where your LLC was formed
- The date your LLC was formed
- The name and address of your California-based registered agent
- A statement that shows you are able to conduct business in the state that your LLC was formed
If you do not select a registered agent, you will not qualify as a foreign LLC. If you do not have a registered agent within California, you will need to obtain a statement that the California Secretary of State will act as your registered agent. You must also include a certificate of good standing, which must have been issued within the past six months. This application can be filed by mail or can be dropped off in person.
It is important to note that if your LLC conducts business in California without authorization to do so, this can result in a lawsuit. That being said, an unregistered company still has to right to defend itself within California. An LLC's member(s) or manager(s) will not be liable for any debts or obligations that happen as a result of conducting unregistered business.
Cost in Registering Foreign LLC in California
When filing an application with the state, the basic fee is $70. If the application is dropped off in person there will be an additional fee of $15. If you would like your application processed in 24 hours or the same day, this costs an additional $350 and $750 respectively.
Once you apply, your LLC will receive a certificate of qualification in the mail. If you would like a copy returned for your records, send up to two copies of your application. The state will then return these copies to you.
If your LLC has multiple members, know that operation agreements can be complex. If at any point you require professional assistance, legal counsel is available.
If you need help with foreign LLC registration in California, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.