Legal Question in Business Law in California

Re: Corporate Question

Yes, that would be considered doing business in California.

Re: Corporate Question

Yes, if your rental property in California is held in the name of the Nevada corporation, rather than in your name individually, it would be considered "doing business in California." The concept of doing business within the state is becoming more narrowly defined. For example, currently most California banks also consider it to be doing business in California to merely open up a checking account within the state, even if it is just for investment purposes.

If there is anything further I can help you with, please don't hesitate to call. I specialize in the areas of business and real estate.

Re: Corporate Question

Corporations Code section 191 provides a number of "safe havens" for foreign corporations to do certain limited acts and transactions in California without triggering the registration requirement.

Acquiring one piece of real estate one time would probably constitute an isolated transaction falling under the exemption of 191(c)(8). However, operating rental property involves collection of rents, a maintenance responsibility, recruitment of tenants, etc. which necessarily takes you outside the exemption, even if these activities don't require hiring employees.

Therefore, I would conclude that your corporation needs to register. Failure to register is technically a misdemeanor and the officers of the corporation can technically be jailed, although I do not know of this ever actually happening.

Also, you lose access to the California courts as a plaintiff; you would have a difficult time carrying out an unlawful detainer or eviction process if your building-owning corporation were not registered and current on franchise taxes.