What is a Foreign LLC in California – Definition and Filing

If you have an LLC in California and want to expand your business beyond California, you must form a foreign LLC. Any business, especially a limited liability company, located in other states, starts its operation in California, must file a foreign LLC in California. To do so, every LLC needs to file additional filing documents, along with tax and relevant documents with the California government.

In this article, you’ll be reading about how to start a foreign LLC in California. Along with that, the page guides you through the steps involved in managing and maintaining a foreign LLC in California after you form it.

Forming a Foreign LLC in California

A foreign LLC does not need to be a company from another country but a business formed under the laws of another state. If you register your LLC in one state and operate your business in California, you probably need to register your LLC as a foreign entity here. Imagine, if your family owns a sushi restaurant in Alabama and you want to expand the chain somewhere in Texas, you must establish your restaurant in Texas as a foreign entity.

Anyone who has an active and in good standing LLC anywhere (except for California) and wants to expand their operations in California can file their LLC as a foreign entity. To start a foreign LLC in California, you need to register it with the California Secretary of State. Every state has a different rule for establishing a foreign LLC. Here are the steps to follow in California for registering a foreign LLC.

Note: These are generic steps to file a foreign LLC in California. Make sure to check with the State Secretary of State, before you start filing your business. – LLCBuddy Team

Step 1: Get the Certificate of Status From Home State

Before you proceed to register your LLC in California as a foreign entity, you must get the Certificate of Status issued from your home state SOS. This is an important document to register an LLC in a foreign state.

If your LLC is originally registered in California, then you must obtain the Certificate of Status from California Secretary of State. If your LLC is in other states, the name of the same document might be different. Every LLC, registered in any state other than California must get this document to register a foreign LLC in California.

Filing Certificate of Status: In California, a Certificate of Status can be obtained in two ways, online and offline. For online issuanceLog in to California SOS. For offline filing, you must get the Business Entities Records – Order Form and send it via mail to California Secretary of State.

Step 2: Choose California Foreign LLC Name

Obtain a name reservation certificate and submit it with your foreign qualification requirements to the California Secretary of State. Your LLC’s legal name outside of California will be listed on the application, along with the name it will use in California. Take note of the requirements for naming your LLC.

You can use the same name as your domestic LLC name, however, that name should be available in California to use. Check name availability at California’s business entity names and reserve your LLC name. There are a bunch of LLC naming guidelines in California when it comes to forming a foreign LLC. Check the guidelines before you name your business.

Step 3: Select California Foreign LLC Registered Agent

A registered agent is a person responsible for receiving all official and legal documents on behalf of your company, whether it is located domestically or in a foreign state. For a foreign LLC in California, you must have a registered agent from California only. No matter where your domestic LLC is located, you must hire a registered agent from California for your foreign LLC.

You’ll need a registered agent to form a foreign LLC in California and take note that the California Agent for Service of Process must have a local address. Here are the best LLC services on our list that will provide you with registered agents to ease your worries:

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Step 4: File Application for Registration for California Foreign LLC

The most important step is to send the application for registration with California SOS. Download the PDF form from the California Secretary of State website or file it online (whichever method is available). The form must be filled out with the following details:

LLC’s full legal name.
A fictitious name or a DBA (only if your LLC’s legal name is not available); Attach a statement of adoption of the fictitious name signed by all LLC members.
- DBA filing method in California: two methods, online and by mail
- Online: Check the California SOS website for the forms or city/county sites for the same
- Offline: Check California Secretary of State website for the PDF Form
- DBA filing fee in California: $26 for filing and $5 for each additional business name.
LLC’s principal office and mailing addresses
LLC formation state and date.
Registered agent’s name and address in California.
Date when your LLC will start operations in California.
Credit card information is on the last page of the form for the application fee.

Online Filing

For online filing, you need to sign in to the online submission portal. Go to the foreign LLC registration option to file it online. You must make the payment at the time of form submission. If you don’t have sign-in credentials then you need to create an account with the California SOS portal to continue filing.

Offline Filling

For offline filing, the LLCs need to download the foreign LLC registration form, Form LLC-5. Fill it up with the relevant information and submit it by mail or in person to the Secretary of State’s office address: Secretary of State, Business Entities Filings, P.O. Box 944228, Sacramento, CA 94244. The fee should be paid using a money order or check for offline filing. For the paper filing (in-person submission), an additional fee might be charged.

Foreign LLC Registration Fee in California: In California, the filing fee for a foreign LLC is $70. If you are filing it online then use credit or debit cards to make the payment. For the offline filing, send the money using checks or money orders. Along with the main fee, an additional $15 will be added for the in-person filing. That amount is added as a paper handling charge by the SOS.

The LLC cost in California, even for foreign LLCs will differ between online filing and by mail. Also, read about what’s the major difference between California’s domestic and foreign LLCs.

Step 5: Determine How Your California Foreign LLC is taxed

Foreign LLCs are also subjected to the California Business Privilege Tax and must file LLC annual reports each year. If you have a single-member foreign LLC then it will be considered as a ‘disregarded LLC’ by IRS. That means the LLC will not be regarded as a company but it will be taxed as an individual (the owner). If you already have an LLC in the home state, you must have obtained the EIN as well. You don’t need to obtain the EIN in California for a foreign LLC separately as it is issued from the IRS.

For other types of LLCs (member-managed or manager-managed LLCs), it will be a ‘pass-through taxation‘ where the LLCs don’t get taxed separately, instead, the members and managers are taxed based on their personal income. So, foreign LLCs are taxed as same as domestic LLCs in California. However, it is recommended to check with the California Secretary of State for state-wise taxes.

Note that forming a foreign LLC would be good for your business as you can legally operate in a different state thus reaching a larger market and opening more opportunities for higher profit.

Filing California Foreign LLC Online – Quick Recap

Get the Certificate of Status from your home state where your LLC is originally registered
Check if the name of your LLC is available in California to use for your foreign LLC. If not, file DBA name with California SOS.
Get a registered agent in California to represent your foreign LLC in California. Recommended, professional help instead of being your own registered agent.
File the Application of Foreign LLC with the California Secretary of State following the mentioned method(s) above.
Make the processing fee.

BOI Reporting

According to the Corporate Transparency Act, every LLC (or business) has to send a BOI reporting to the Financial Crimes Enforcement Network (FinCEN). Once you establish an LLC and if it is enlisted under the list of reporting companies, you must file your BOI report in California with the FinCEN.

After Forming California Foreign LLC

Here are added things you need to accomplish after forming your California Foreign LLC

Obtain Business Licenses. Find the business licenses you’ll need using the Business License Search. You can contact the license office at California Department of Tax and Fee Administration.
File LLC annual reports and Business Privilege Tax. You must file an Annual Report before the stipulated time frame after forming your LLC in California. Here’s everything about California LLC Annual Reports.
Pay State Taxes like sales tax; you’ll need an EIN for your LLC.

FAQs

What are the requirements for forming a foreign LLC in California?

In order to form a foreign LLC in California, you will need to submit a Certificate of Registration to the California Secretary of State.

Is there a fee for registering a foreign LLC in California?

Yes, there is a fee for registering a foreign LLC in California. The fee amount depends on various factors, such as the type of LLC and the method of submission.

Can a foreign LLC operate in California without registering?

No, a foreign LLC cannot legally operate in California without registering with the Secretary of State.

Are there ongoing obligations for a foreign LLC in California?

Yes, foreign LLCs in California must file an annual Statement of Information and pay the associated fee in order to maintain good standing.

How long does it take to register a foreign LLC in California?

The processing time for registering a foreign LLC in California can vary, but it typically takes several weeks to receive approval.

Do foreign LLCs in California need a registered agent?

Yes, foreign LLCs in California are required to have a registered agent who is located in the state and available during regular business hours.

Does a foreign LLC operating in California need a business license?

In most cases, foreign LLCs operating in California will need to obtain a business license from the city or county where they are conducting business.

Can a foreign LLC in California change its name?

Yes, a foreign LLC in California can change its name by filing an amendment to the Certificate of Registration with the Secretary of State.

What are the tax implications for a foreign LLC in California?

Foreign LLCs operating in California are subject to state taxes, including income tax and franchise tax.

Can a foreign LLC in California convert to a domestic LLC?

Yes, a foreign LLC in California can convert to a domestic LLC by filing the necessary paperwork with the Secretary of State.

What happens if a foreign LLC in California fails to comply with registration requirements?

If a foreign LLC in California fails to comply with registration requirements, it may be subject to penalties, fines, and administrative dissolution.

Are there any restrictions on the name of a foreign LLC in California?

Yes, the name of a foreign LLC in California must be distinguishable from all other registered names in the state.

Can a foreign LLC in California be sued in a California court?

Yes, a foreign LLC in California can be sued in a California court for legal matters related to its business operations in the state.

Do foreign LLCs in California need to file a Statement of Authority?

Yes, foreign LLCs in California must file a Statement of Authority if they want to grant specific powers to certain individuals within the company.

Are there any specific accounting and bookkeeping requirements for foreign LLCs in California?

Yes, foreign LLCs in California must maintain accurate financial records and adhere to state and federal accounting standards.

Can a foreign LLC in California have multiple members?

Yes, a foreign LLC in California can have multiple members, but each member must comply with the state’s registration requirements.

Can a foreign LLC in California obtain financing from California banks?

Yes, foreign LLCs in California can typically obtain financing from California banks, but they may be subject to additional scrutiny due to their foreign status.

Do foreign LLCs in California need to file an annual report?

Yes, foreign LLCs in California must file an annual Statement of Information, which serves as their annual report to the Secretary of State.

Can a foreign LLC in California operate in multiple states?

Yes, a foreign LLC registered in California can conduct business in multiple states, but it must comply with the registration requirements of each state where it operates.

Can a foreign LLC in California issue stock or securities?

Yes, a foreign LLC in California can issue stock or securities, but it must comply with state and federal securities laws.

Does California require foreign LLCs to have a specific organizational structure?

No, California does not require foreign LLCs to have a specific organizational structure, but they must have at least one manager or member.

Can a foreign LLC in California own real estate in the state?

Yes, a foreign LLC in California can own real estate in the state, but it must comply with local zoning and tax laws.

Are foreign LLCs in California subject to the state’s labor laws?

Yes, foreign LLCs in California must comply with the state’s labor laws, including minimum wage, overtime, and workplace safety regulations.

Do foreign LLCs in California need to file for a foreign qualification in each county where they conduct business?

No, foreign LLCs in California only need to file a Certificate of Registration with the California Secretary of State, not with individual counties.

Can a foreign LLC in California provide professional services, such as legal or medical services?

Yes, a foreign LLC in California can provide professional services, but the individuals providing those services must comply with relevant licensing requirements.

Can a foreign LLC in California convert to a different business entity, such as a corporation?

Yes, a foreign LLC in California can convert to a different business entity, such as a corporation, by following the proper legal procedures and obtaining approval from the Secretary of State.

Can a foreign LLC in California apply for government contracts?

Yes, a foreign LLC in California can apply for government contracts, but it must comply with specific procurement rules and regulations.

Can a foreign LLC in California distribute profits to its members?

Yes, a foreign LLC in California can distribute profits to its members, but it must comply with tax laws and any operating agreement provisions.

Can a foreign LLC in California serve as a holding company for other entities?

Yes, a foreign LLC in California can serve as a holding company for other entities, but it must comply with all relevant laws and regulations regarding ownership and control.

What is a foreign LLC in California?

A foreign LLC in California is a limited liability company that was formed in a state other than California but is seeking to conduct business in California.

In Conclusion

Having a foreign LLC in California is nothing but expanding your business legally beyond the boundary of your domestic or home state. Starting a foreign LLC in California does not require a lot of documentation or tasks. However, it is always good to seek help from a professional when it comes to running your business. From getting the Certificate of Status to hiring a registered agent in California, a professional or attorney can always be a perfect help. ZenBusiness is one of the most accurate and user-friendly services that offer a bunch of LLC formation services. They offer LLC formation for $0 (excluding the state formation fee).

The cost of registering a foreign LLC in California can vary depending on a range of factors. While the initial registration fees and ongoing expenses can be a significant investment, many companies find that the benefits of establishing a presence in the state outweigh the costs. By carefully considering the expenses involved and budgeting accordingly, companies can ensure that their foreign LLC in California is a success.