Legal Question in Business Law in California

Re: Registering of office by overseas companies

Registration is a fairly simple process done through the office of the California Secretary of State. I�m not sure what you mean by �statutory responsibilities for US operations�. If you are asking whether your company would have legal responsibility for its operations here the answer is yes but there are ways to limit your liability. Feel free to contact me if you would like a free consultation.

Re: Registering of office by overseas companies

The process of opening a "registered office" amounts to obtaining a "certificate of qualification" from the Secretary of State in Sacramento. The application is simple and can be processed over-the-counter in 15 minutes. The entire application can be made on a single page but must include designation of a person -- which can be a corporate "person" -- at a physical address within California who or which is the designated agent for the service of legal process. Many out-of-state applicants designate their California attorneys as agent for the service of process; otherwise, your California sales office or other representative can be designated to fulfill this requirement.

A qualifiying foreign corporation must pay a small fee when first qualifying along with the application (in the area of $100) and subsequently will be billed for California franchise taxes -- the tax for the privilege of doing business here -- (usually in the area of $800 annually).

There are at least three answers to the question about "statutory responsibilities" --

First, the need to become qualified. Qualification as described above is not necessary if the foreign corporation conducts only minimal business or 'isolated transactions' in California. See Corporations Code section 191. Since it is easy and cheap to qualify, you should do so if you have any ongoing activity in this state at all.

Second, liability for California income taxes. This state is rather aggressive in assessing and collecting taxes from out-of-state coporations based upon their assets, operations, income, etc. derived from California; however, the laws are too complex to describe here.

Third, any person including a corporation will make itself subject to the jurisdiction of California courts as a result of its business activities and contacts with the state. The more extensive and obvious your business connection with California, the more likely its courts will be able to assert jurisdiction if you are sued here. The threshold is pretty low.

These are the "price" of doing business here; the rewards can also be great and as a result many business from the other 49 U.S. states as well as from abroad have qualified and conduct business here with quite satisfactory results.

There are many other laws affecting business establishment and operation and while you could fill out and submit the qualification forms without the assistance of an attorney, the U.S. and California legal structure is such that almost all businesses, local and foreign, find it necessary to use lawyers to guide them through the maze of laws and regulations.

Re: Registering of office by overseas companies

More information is needed to answer your question completely, i.e. what type of business will be conducted from your U.S. office? A foreign (non-California) business entity is required to "qualify to do business" by filing a fairly simple form with the Secretary of State, or it may not avail itself of the Courts of this State. Depending on the nature and location of your office, you may also need a local business license. Also, California imposes a scheme of "unitary taxation," which may subject you to state taxes, regardless of the source of your income. Please visit our website, www.labusinesslawyer.com for a free consultation.