Businesses formed in another state but doing business in California must register to do business in California. This includes all types of business entities, including LLCs, corporations, and more.
There are five basic steps that should be taken by a foreign corporation or LLC to register as a foreign entity in California:
File a foreign registration statement
Submit a certificate of good standing
Designate a registered agent in California
File a statement of information
Pay annual franchise taxes
File a Foreign Registration Statement
A foreign entity must file a foreign registration statement with the California SOS before it can qualify to do business in California. For a foreign corporation, the foreign registration statement form is titled Statement and Designation by Foreign Corporation. For an LLC, the foreign registration statement is titled Application to Register a Foreign LLC.
Submit a Certificate of Good Standing
Along with filing its foreign registration statement, a foreign entity must also file a certificate of good standing from its home state with the California SOS. Note that the certificate must have been issued within the previous six months by an authorized public official of the state or place of incorporation/formation. The purpose of this requirement is to verify that the foreign entity is, in fact, in existence and in good standing in its home state.
Designate a Registered Agent in California
Any foreign entity registering to do business in California must have a registered agent in the state of California. If the company has a physical presence in California, it may have a representative from the company serve as registered agent. But if it does not, then the company will likely need to retain a commercial registered agent to designate in California. Commercial registered agents can be readily found for low cost annual fees.
File a Statement of Information
A foreign corporation or LLC must file a Statement of Information with the California SOS within 90 days after filings its foreign registration statement. A foreign corporation must then file a Statement of Information annually thereafter, while a foreign LLC must then file a Statement of Information bienially thereafter.
Pay Annual Franchise Taxes
Foreign entities that register to do business in California must pay an annual minimum franchise tax, which is, as of the date of writing, $800.
Registering a foreign entity to do business in California is necessary for businesses that plan to operate in California, and the steps to do it are straightforward to follow.
But for foreign businesses that intend to relocate to California and operate primarily in California, it may be worth considering converting the foreign entity to a California entity to avoid paying administrative fees in multiple states.