Find out how to qualify your LLC to conduct business in California.
If you own a company that was founded in a state other than California, you must qualify or register it in California in order to conduct business there. The requirements for qualifying your international (non-California) limited liability corporation (LLC) to conduct business in California are summarized here.
If your LLC is founded in a different state, it is referred to as a foreign LLC in California. In other words, being foreign does not imply being from another nation. Instead, it signifies that your company was formed under the laws of another state. A domestic LLC, on the other hand, is one that is created in the state in which it operates. This is a prevalent phrase in the United States. In Colorado, for example, an LLC founded in Arizona is a foreign LLC.
If you are “transacting business” in California, you must register your foreign company with the state, according to California’s LLC Act. What exactly does this mean? Well, California’s LLC Act, like other states’, does not define the word “transacting business” in connection to international registrations.
State regulations determining when foreign enterprises must collect state sales tax in their state, on the other hand, give some advice on the subject. To be obligated to collect state sales tax on sales to citizens of a state, a firm must have a physical presence in, or nexus with, that state. In general, physical presence and nexus are synonymous and refer to:
Certain exclusions may apply, and the regulations might become more convoluted in situations such as Internet sales. However, if you have an office, a shop, a warehouse, or workers in another state, you must register your LLC as a foreign corporation in that state.
California’s LLC Act, like other states’, stipulates some actions that do not constitute doing business in the state. Among the objects mentioned are:
The LLC Act clearly states that this list is not exhaustive; additional activities may potentially be exempt. Check Section 17708.03 of the California Corporations Code for a complete legal definition of each of the listed elements.
If your LLC’s only operation in California is one or more of the activities mentioned above, you should not be required to register with the state.
You must submit an Application to Register a Foreign Limited Liability Company (LLC) with the California Secretary of State to register your company in California (SOS). The application form may be downloaded on the SOS website.
To complete the application, you must give the same information that you would provide to register an LLC in your home state. More precisely, for a California registration application, you must provide:
With your application, you must attach a certificate of good standing. The certificate must have been granted by the agency where the LLC was founded within the past six months (usually a secretary of state in the state where your LLC is organized).
You may attach a copy of your application, which will be returned to you by the SOS with certification (for a $5 cost). You may submit your application by mail or in person. The standard filing cost is $70. Dropped-off applications are charged an extra $15 cost. Check out the SOS’s LLC filing tips website for more information.
If your LLC does business in California without authorization, it cannot file a lawsuit there. However, the fact that your LLC is not registered does not preclude it from defending a case in California. Furthermore, a member or management of an LLC is not personally accountable for the LLC’s debts, obligations, or other liabilities just because the organization did business in California without a certificate of registration.
The regulations and standards for international qualifying in California are identical whether your company is structured as a corporation rather than an LLC. However, you will need to utilize a separate application form.