Legal Question in Business Law in California

NV LLC doing business in CA???

Is it possible for my Nevada LLC (Foreign LLC/out of state) to do business in the state of CA with out having to pay the $800 franchise tax which any CA LLC registered & doing business in the state of CA would be obligated to pay?

Also, in CA a domestic LLC shall not be used for those professions requiring a license. Can a real estate firm legally opperate as an LLC in the state of CA?

Thanks!


Asked on 4/28/06, 3:21 pm

3 Answers from Attorneys

Carl Starrett Law Offices of Carl H. Starrett II

Re: NV LLC doing business in CA???

The answer to both of your questions is no.

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Answered on 4/28/06, 3:35 pm
Ken Koenen Koenen & Tokunaga, P.C.

Re: NV LLC doing business in CA???

An out of state LLC, doing business in California, must register and pay the tax in California.

There is no provision in the Business and Professions code for an LLC to hold a Real Estate License ... only a corporation.

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Answered on 4/28/06, 3:43 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: NV LLC doing business in CA???

(1) A Nevada LLC cannot operate in California without rgistering and thus becoming subject to California's franchise tax. The level of activity that triggers an obligation to register has been the subject of several court decisions, and the line isn't clearly drawn, but in general isolated transactions such as accepting an order or buying real estate would not subject the LLC to the registration requirement, but having an employee based here, opening an office or store, actively managing rental property, etc. surely would require registration.

(2) Most businesses requiring a professional license cannot be set up as LLCs in California. A check of the Department of Real Estate Web site shows no mention of LLCs and there is no form provided for a license application by an LLC (whereas there is one for corporate applicants). The conclusion is that LLCs cannot operate real estate businesses in California.

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Answered on 4/28/06, 3:48 pm


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