Legal Question in Business Law in California

Division of corporation to register as foreign corp

I have a c corp incorporated in Nevada and registered as a foreign corp in California. I just formed an LLC under that Nevada corp as a division. Does that need to register in CA as well, and will it have to file separate state taxes or can it be all under one?


Asked on 2/26/08, 10:44 am

2 Answers from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Division of corporation to register as foreign corp

An LLC is a separate legal entity regardless of how it is owned. The qualification of its corporate owner doesn't qualify it. The LLC, if it conducts intrastate business in California, must register and pay franchise taxes. Its earnings will be passed through to its corporate owner which, because it is a "C" corporation, will pay income taxes to California on its California apportioned share of both its and the LLC's taxable income.

This gets really complicated and I have to wonder why you're doing this. The California Franchise Tax Board has a publication explaining the tax responsibilities of Nevada-based entities doing business in California. It is FTB Publication 689 and available on line at www.ftb.ca.gov/forms. It is very on-point for your situation and you should download and read it.

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Answered on 2/26/08, 12:03 pm
Jonas Grant Law Office of Jonas M. Grant, A.P.C.

Re: Division of corporation to register as foreign corp

I concur - divisions for small companies are usually needless complexities (although, of course, there are exceptions).

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Answered on 2/26/08, 10:28 pm


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