Legal Question in Business Law in California

I assume you mean "form" an LLC, since it must be registered in each state where it transacts any significant amount of business. Generally, it turns out to be wise to form corporations or LLCs in the state where they will be headquartered to avoid paying fees and taxes to another state where it'll have no other connection. There are exceptions, mostly applicable to large businesses or where there are unusual conditions such as fear of a takeover or need for secrecy, and in my years of practice I've heard of some such situations but never had a client for whom I would recommend formation outside California. Remember, if you form a Nevada or Wyoming or Delaware LLC but operate it from a desk in California, you'll be paying your accountant to prepare two returns and paying at least a minimum annual fee to both states.

Finally, I'm not saying it never makes sense to shop jurisdictions for forming a business entity, but for most new businesses you're not going to save a dime on overall taxes, fees and report-preparation expense. You need a good reason to form your business out of state, and just being fashionable is not one of them.

Mr. Whipple is 100% right. Unless you have some extraordinary reasons, it never pays to form the LLC outside the state you will be doing business in. A good rule of thumb is that if you are looking for free advice on the internet, you are not forming an LLC that will be in a big enough league to care about the obscure advantages of forming out of state. You'll need a regular lawyer WAY before you get that big.