Legal Question in Business Law in California

yes. The LLC needs to register as a foreign corporation with the California Secretary of State. This is why some of those non-legal seminars that pump up other state registrations to avoid California taxes is misinforming the public.

Yes. A corporation or LLC organized in another state that does business in California must file a relatively simple form with the California Secretary of State to "qualify" to do business here, and will become subject to payment of the appropriate annual franchise tax, levied and collected by the Franchise Tax Board. Failure to qualify, when required to do so, is a rarely-prosecuted misdemeanor under Corporations Code section 2258 or related law pertaining to LLCs. Usually, however, the penalty is lack of state benefits such as access to the courts, and an obligation to pay back taxes plus penalties and interest when caught. BTW, the LLC registers as a foreign LLC, not as a foreign corporation (re previous answer).

As a Franchise Attorney I agree with attorney Bryan's answer. Just doing business in California is enough to trigger the registration and payment of annual franchise taxes. And yes, you do register as a foreign LLC, not as a foreign corporation. Consult with a good business or franchise attorney in your area for specific advice.

Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.

Franchise Foundations, a Professional Corporation