Delaware LLC Doing 91自拍 in California
If you're a Delaware LLC doing business in California, your company is considered domestic to the state of Delaware and foreign to California. To take advantage of the state鈥檚 strong corporate law structure, forming an LLC in Delaware is often a worthwhile choice.
Why 91自拍 Owners Choose Delaware
If you operate your business in California, forming a Delaware LLC means registering in both states. So, why double up on paperwork and costs? While it may not be necessary for a small, local shop, Delaware offers major advantages for startups and scalable businesses.
The primary draw is Delaware鈥檚 Court of Chancery, a specialized, judge-only business court with over two centuries of established case law that provides unmatched legal predictability. Additionally, Delaware offers enhanced privacy, unlike California, which requires public disclosure of LLC owners. Finally, venture capitalists and angel investors consider Delaware the legal gold standard. Forming your LLC there signals to sophisticated investors that your legal foundation is built on familiar, highly respected ground.
Don’t let state borders limit your business!
Secure your Foreign Qualification today.
Qualify my company
How to Register a Delaware LLC in California
If your business will have a physical presence by operating, hiring employees, banking, or even holding an asset in California, you will typically need to qualify the business to operate there through a process known as Foreign Qualification. The Foreign Qualification process enables a company to transact business in California. If you're a Delaware LLC operating in California or any other U.S. state, failure to adhere to local compliance regulations may put the protection of your company at risk.
Here is a quick instructional guide to complete the process:
- Secure a California Registered Agent
- Obtain a Certificate of Good Standing from Delaware
- Check Your LLC鈥檚 Name Availability
- File Registration Forms with the California Secretary of State
- Pay the California Franchise Tax
California or Delaware Registered Agent?
A Registered Agent is your liaison with the state and provides a physical address within the state for the purpose of receiving any legal documents or service of process from the state. A Delaware LLC doing business in California will generally need a Registered Agent in both states. The Delaware Registered Agent is required to keep the LLC active and in good standing in Delaware, where the company was originally formed. The California Registered Agent is required because the company is now registering to do business in California as a foreign LLC.
Some people elect to be their own Registered Agent while others enlist the support of their Delaware Registered Agent. Often, the Delaware Registered Agent will also provide the service in California. The California Registered Agent will not need to sign the filing for a Delaware LLC in California.
California Tax Obligations for a Delaware LLC
A Delaware LLC doing business in California may owe taxes and fees in both states. Registering as a foreign LLC in California does not replace the company鈥檚 Delaware obligations. Instead, the LLC must continue maintaining its Delaware status while also meeting California鈥檚 tax requirements.
In California, LLCs are generally subject to the state鈥檚 annual $800 LLC tax, paid to the California Franchise Tax Board (FTB). California may also charge an additional LLC fee based on the company鈥檚 total California income.
The LLC may also need to file California tax returns and report California-source income, depending on its tax classification and business activity. Because California tax rules can be complex, especially for companies with owners or operations in multiple states, business owners should speak with a tax professional before registering or operating in California.
Converting a California LLC to a Delaware LLC
A statutory conversion is a legal process that allows a business entity to change its home state without having to close down the original company and start a brand new one from scratch. Instead of the messy administrative process of dissolving your current business, forming a new entity, and manually transferring over all your assets and liabilities, a statutory conversion allows the business to legally swap into the new entity. The converted business is considered a direct continuation of the original one.
If you need help moving your company's legal home from one state to another, such as converting a California LLC into a Delaware LLC, make sure to contact 91自拍, Inc. Our team of professionals can help you with the transition and act as your registered agent in any state.
FAQs
Does my Delaware LLC doing business in California need a California registered agent?
Yes. If your Delaware LLC registers to do business in California, it will need an agent in California. This is separate from the company鈥檚 Delaware Registered Agent. The California agent gives the state and courts a reliable in-state contact for legal notices and official documents. California鈥檚 foreign LLC registration form requires agent information as part of the filing.
Does registering in California create a new LLC?
No. Registering a Delaware LLC in California does not create a new California LLC. Instead, it gives the existing Delaware LLC authority to do business in California as a foreign LLC. The company remains a Delaware LLC and must continue meeting Delaware requirements, while also following California鈥檚 tax and reporting rules.
Can I live in California and own a Delaware LLC?
Yes. You can live in California and own a Delaware LLC. Delaware does not require LLC owners to live in Delaware. However, if the LLC is operated from California or otherwise does business there, it may need to register in California and meet California tax and reporting requirements. Registering in California does not replace the LLC鈥檚 Delaware obligations.
Form a Delaware LLC
If you're planning on forming an LLC in California, first consider doing business in California as a Delaware LLC. You can learn more about Delaware Foreign LLC Registration on our website. Contact our team today to learn how to register a Delaware LLC in California.
Don’t let state borders limit your business!
Secure your Foreign Qualification today.
Qualify my company*Disclaimer*: 91自拍, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, 91自拍, Inc. is not responsible for and makes no representations regarding such source鈥檚 content or accuracy. Opinions expressed in this article do not necessarily reflect those of 91自拍, Inc.
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There are 9 comments left for Delaware LLC Doing 91自拍 in California
George Cornell said: Wednesday, October 17, 2018If you are doing anything in California including internet sales the State will make you pay the franchise tax. Simple as that.
tom pere said: Saturday, May 5, 2018I did independent contractor work for a business Registered in Kent County Delaware - but their entire operations and principal place of business is in Irvine, CA and after completing the work to their entire satisfaction they refuse to pay the bill per our contract. How can you help?
HBS Staff replied: Monday, May 7, 2018You should call your attorney to assist you with that issue.
Jorge said: Friday, January 5, 2018Do you know any lawyer that has done this process already? I need to do business in California...
HBS Staff replied: Monday, January 8, 2018We can help you foreign qualify in California. Give us a call at 1-800-345-2677 or Live Chat with us from our homepage.
NDA said: Tuesday, October 3, 2017IF your an Independent contract working for an out of state LLC 鈥淒oing 91自拍鈥 in California, which contract laws apply to you. E.G. A non-compete was signed. Does CA law apply or the out of state law?
HBS Staff replied: Wednesday, October 4, 2017We are sorry, but this question is outside the realm of our knowledge. Your best bet would be to talk to an attorney. Thanks for reading our blog.
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