Legal Question in Business Law in California

I'm moving to California, from Florida, and have an LLC registered in Florida. I am the only employee of my company, and the move won't affect anyone else but me, but I am unfamiliar with California business law, and was under the impression that Florida biz law was one of the best; would it be to my advantage to register the company with a Registered Agent service, or dissolve/transfer to California?


Asked on 9/21/09, 10:26 am

1 Answer from Attorneys

You may luck out and find someone here who can give you an authoritative run-down on the comparisons between CA and FL LLC law, but not likely. I can tell you that once you move to CA and are doing business here you will be subject to most CA business law. Over 90% of business law is based on where you do business and where your princpal place of business is, not the domicile state of the business. If you keep the FL LLC you will have to register with the CA Secretary of State as a foreign LLC with it's principal place of business in CA, be subject to CA law regarding the operation of your business as it relates to customers/clients, employees, contracts, etc, and you will pay CA taxes.

The one disadvantage to LLC's in CA that may or may not matter, and I can't say for sure which state's law would apply if you were a FL LLC with principal place of business in CA, is that CA has a tax structure that disfavors LLCs in certain financial circumstances. LLC's aren't taxed in CA, exactly, since the income flows through as with LLCs in general, but there is an annual fee that's based on gross revenues and it's not a percentage, but rather a flat fee with something like three tiers. So an LLC with anticipated gross revenues near the cusp can find itself being bumped up into the higher bracket for an increase in gross revenues that doesn't even match the increased fee. I think this applies to foreign LLCs operating in CA, but I'm not sure.

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Answered on 9/21/09, 12:03 pm


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