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Doing Business as a Foreign Entity in California

by Norris Law Group on November 18, 2014

Doing Business as a Foreign Entity in CaliforniaCorporations may be set up in any state in the U.S. Each state has its own set of rules, regulations and fees regarding these corporations. Wyoming, for example, has become a popular state in which to incorporate, as Wyoming’s rules make incorporation relatively easy. Wyoming also does not make the names of the owners of Wyoming corporations publicly known, which many businesspeople also find attractive.

Corporations set up in one state may also do business in other states. But businesspeople should be aware that each state has its own set of requirements for doing business in the state. California, for example, demands that out-of-state corporations register as a “foreign entity” before they can transact business in California. In this case, “foreign” simply means “outside of California;” even corporations from other states in the U.S. are subject to this rule.

According to California’s Franchise Tax Board, a 2011 California law requires “out-of-state corporations, LLCs, and pass-through entities (partnerships, S corporations, LLCs treated as partnership) and their partners/shareholders/members that have property, payroll or sales in [California]” must register as foreign entities before doing business in California. Foreign entities are also liable to pay California state taxes if they do business in the state.

Engaging in intrastate commerce with California may prove to be quite lucrative for your business, but it is important to know about all the rules and regulations involved in doing so. An experienced business law attorney can help you navigate the waters of doing business in California.

Attorney Graham Norris and his associates at the Norris Law Group serve the residents of Utah County, UT and throughout Utah, Wyoming and Idaho. Contact them today at 801-932-1238 or online for a free consultation.

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