Register an Out-of-State LLC or Corporation in California: Doing Business Test, $70 or $100 Filing, $800 Tax
Register an Out-of-State LLC or Corporation in California: Doing Business Test, $70 or $100 Filing, $800 Tax
If your LLC was organized in Nevada or Delaware, or your corporation was incorporated in another state, and you have California customers, a California address, or a California employee, you have to answer two separate questions. First: must you register with the California Secretary of State? Second: does the Franchise Tax Board treat you as “doing business” in California and charge you the $800 tax? The two questions use different tests, and answering one does not answer the other.
This article is general information, not legal or tax advice. Confirm your situation with a California attorney and a CPA before you file anything.
Two Tests, Two Agencies
The Secretary of State (SOS) decides whether a foreign entity must register to transact intrastate business in California. The Franchise Tax Board (FTB) decides whether the entity is “doing business” in California for tax purposes. A business can fail one test and pass the other. An LLC can owe the $800 tax without having registered with the SOS, and registering with the SOS does not replace the tax. Keep the two questions separate when you plan.
Test 1: Must You Register With the Secretary of State?
Under the Corporations Code (Corp 191 and 17708.03), a foreign LLC or corporation must register before it transacts intrastate business in California. That means entering into repeated and successive transactions of its business in California, other than in interstate or foreign commerce.
Several activities do not, by themselves, count as intrastate business:
- Defending a lawsuit in California
- Holding internal meetings in California
- Keeping a bank account in California
- Selling through independent contractors
- Soliciting orders that the business accepts outside California
- One isolated transaction completed within 180 days
The line between a single deal and “repeated and successive” transactions is often unclear. The SOS states that it cannot tell a business whether it must register. If your California activity is more than occasional, ask a California attorney to review it before you decide.
Test 2: The Franchise Tax Board “Doing Business” Test
The FTB uses a broader test. An entity is doing business in California for tax purposes if it does any of the following:
- Engages in any transaction for financial gain in California
- Is organized in California or commercially domiciled here
- Has California sales, property, or payroll above the yearly thresholds
For 2025, the thresholds were $757,070 in sales, $75,707 in property, and $75,707 in payroll. The FTB indexes these amounts every year, so check the Franchise Tax Board for the current-year figures before you rely on them.
An out-of-state seller of tangible goods may be protected from California income-based taxes under Public Law 86-272. That protection does not usually reach the $800 minimum tax or the fees, and you should confirm how it applies to your situation with the Franchise Tax Board.
What Registration Costs and What It Requires
The filing fees for registering are set by the Secretary of State:
| Item | Fee | Notes |
|---|---|---|
| Foreign LLC application to register (Form LLC-5) | $70 | Requires a certificate of good standing from the home state, issued within the past six months (Corp 17708.02) |
| Foreign corporation Statement and Designation | $100 | Requires a certificate of good standing from the home state |
| Foreign nonprofit filing | $30 | Same general process as a foreign corporation |
| Name reservation | $10 | Holds the name for 60 days |
| Statement of Information, foreign LLC | $20 | Due within 90 days of registering, then every two years |
| Statement of Information, foreign stock corporation | $25 | Due within 90 days of registering, then every year |
Online filing through bizfile Online is the fastest route, with normal processing in about 5 business days or less. PDF filings take 10 or more business days, and mail and in-person filing are still available. If you need speed, the Secretary of State offers expedited processing: 24-hour service for $350 and same-day service for $750 if the filing is received by 9:30 a.m.
A registered foreign entity must also maintain a California agent for service of process. The agent must be either an individual who lives in California or a corporation that has filed a Corp 1505 certificate. A foreign LLC must also keep an office in California under Corp 17701.13. That office does not have to be where the LLC does its business.
Step-by-Step: Registering a Foreign LLC or Corporation
- Confirm your home-state status. Order a current certificate of good standing from Nevada, Delaware, or the state where you were formed. For an LLC, it must be dated within the past six months.
- Pick your California agent. Choose an individual who lives in California or a corporate agent with a Corp 1505 certificate. An LLC also needs a California office address.
- Check the name. The name must be available in California. Reserve it for $10 if you need time. The reservation lasts 60 days and cannot be renewed for consecutive periods.
- File the registration. File Form LLC-5 for an LLC or the Statement and Designation for a corporation through bizfile Online at bizfileonline.sos.ca.gov.
- File the Statement of Information within 90 days. Pay $20 every two years for an LLC or $25 every year for a corporation. Missing it can trigger a penalty.
If you operate under a name other than your registered entity name, you may also need a Fictitious Business Name Statement. It is filed with the county clerk, must be published in a newspaper once a week for four weeks, and expires after five years. Check the county fee and publication cost before you file.
What You Owe the Franchise Tax Board After Registering
Registering with the SOS does not settle your tax obligations. The Franchise Tax Board taxes the entity separately. Registering and paying the $800 are not the same step, and paying the FTB does not register you with the SOS.
Foreign LLCs that are registered or doing business in California owe the $800 minimum annual franchise tax. They also owe an LLC fee based on California-source total income, which is due once that income reaches the following levels:
- $250,000 in California-source total income: $900
- $500,000 in California-source total income: $2,500
- $1,000,000 in California-source total income: $6,000
- $5,000,000 in California-source total income: $11,790
Every LLC organized or registered in California in 2024 through 2026 owes the $800 from its first year. An LLC whose first taxable year begins in 2027, 2028, or 2029 pays $400 in year one under RTC 17941(g)(2). Confirm with the Franchise Tax Board whether that first-year amount applies to a registering foreign LLC. A Nevada or Delaware LLC with California customers does not escape the $800 because its home state has no income tax.
Foreign corporations owe the $800 minimum except in their first taxable year, and they pay 8.84% on California income. An S corporation pays 1.5% of net income instead.
Foreign series LLCs need extra care. California does not allow a domestic series LLC, and a foreign series LLC owes the $800 and the LLC fee for each series. Confirm how your structure is treated before you register.
What Happens If You Do Not Register
The consequences differ by entity type. Here is what the Corporations Code provides:
- Foreign LLC: If it transacts intrastate business without registering, it cannot bring a lawsuit in California courts until it registers. It can still defend a lawsuit. Its members are not personally liable just because the LLC failed to register (Corp 17708.07).
- Foreign corporation: It may face a $20 per day penalty. To sue in California, it must pay a $250 penalty plus back fees and taxes (Corp 2203).
Local Licenses and Permits
California has no general statewide business license. The Secretary of State issues none, and the CDTFA seller’s permit is not a business license. Most cities charge a local business tax or registration certificate. Of the 483 cities, 445 report revenue from one, and the formulas vary by city, so check the city where you operate. Counties license only regulated activities.
Two other registrations may apply. Register with the CDTFA at cdtfa.ca.gov if you sell taxable goods. The state sales tax is 7.25% statewide, and city rates run from 7.25% to 11.75% with district taxes. The seller’s permit itself is free. Register with the EDD if you have employees. Regulated trades and professions also need licenses from state boards, such as the Contractors State License Board for work above the $1,000 threshold.
Common Mistakes to Avoid
- Treating registration as the tax. Filing the LLC-5 does not satisfy your FTB obligations, and paying the $800 does not register you with the SOS.
- Assuming a home-state advantage. Nevada and Delaware may have favorable state tax rules, but California taxes entities doing business here.
- Ignoring the Statement of Information. Missing it can lead to penalties and to loss of standing.
- Skipping the good standing certificate. Filing without a current certificate from your home state will delay or stop your registration.
Where to Confirm the Details
Use these official sources to verify fees and deadlines before you file:
- California Secretary of State, Business Programs Division: sos.ca.gov/business-programs
- bizfile Online, for filing and business searches: bizfileonline.sos.ca.gov
- Franchise Tax Board, for the $800 tax, LLC fees, and the current-year doing business thresholds: ftb.ca.gov
- California Department of Tax and Fee Administration: cdtfa.ca.gov
- California Small Business Development Center network, for free advising: californiasbdc.org
If you have California customers but are unsure whether you transact intrastate business, or you need to decide how the FTB’s thresholds apply to your sales, payroll, and property, speak with a California attorney and a CPA. Those professionals can review your facts against the statutes and the current figures, which this guide cannot do for you.