If your Delaware LLC operates in California, such as having employees, conducting banking transactions, or generating income, California considers your business a foreign entity. To operate legally in California, you must go through a process called Foreign Qualification.
What Is Foreign Qualification?
Foreign Qualification allows your Delaware LLC to legally operate as a foreign entity in California. This process ensures that your Delaware-based LLC complies with California state regulations.
Requirements to Register Your Delaware LLC in California:
1. Application for Registration: You must file an LLC registration application with the California Secretary of State.
2. Certified Delaware Certificate of Organization: A certified copy of your Certificate of Formation from Delaware.
3. Certificate of Good Standing: You must obtain a Certificate of Good Standing from the Delaware Division of Corporations.
4. Registered Agent: California requires a registered agent within the state to receive legal documents on behalf of your business. You can act as your own registered agent, or you can hire a professional registered agent service that operates in both Delaware and California.
5. Authority Declaration: California requires you to declare the name and address of an authorized individual or entity who can act under the state’s laws regarding incorporation.
Public Information:
The information you provide during the registration process becomes public. However, it will not be publicly accessible unless requested by the relevant authorities or jurisdictions.
Reporting Obligations:
Once registered, your Delaware LLC must comply with reporting requirements in California:
•Initial Report: Must be filed within 90 days of registration.
•Biennial Reports: Must be filed every two years by the end of the month in which you registered. The filing fee for both the initial and biennial reports is $20.
Penalties and Taxes:
•Late Reporting Penalty: California imposes a penalty of $250 for late or missed reports.
•Minimum Franchise Tax: California levies a minimum franchise tax of $800, which your LLC will be responsible for annually.
If you need further assistance with the process, feel free to contact us.
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