California Certificate of Authority: Filing, Fees, and Franchise Tax

A California Certificate of Authority is the registration an out-of-state corporation, LLC, limited partnership, or limited liability partnership must obtain from the California Secretary of State before it begins doing repeated business inside the state. You file an application, name a California agent for service of process, attach a recent certificate of good standing from your home jurisdiction, and pay the filing fee. Once registered, you owe California’s annual franchise tax and periodic Statements of Information. Skip the registration and California courts will refuse to hear your lawsuits, while penalties accrue at $20 for every day you operated without authorization.

Who Needs to Register

If your company was formed in another state or country and enters into repeated, successive transactions in California that go beyond interstate commerce, you must register. Corporations Code Section 2105 imposes this duty on foreign corporations, and Section 17708.02 does the same for foreign LLCs.1California Legislative Information. California Corporations Code CORP 21052California Legislative Information. California Corporations Code CORP 17708.02

The statutes don’t give a clean checklist. The test is whether you’re entering into repeated and successive transactions in California beyond interstate or foreign commerce.3California Legislative Information. California Corporations Code CORP 191 In practice, a physical California office, California-based employees, or ongoing direct sales to California customers almost always crosses the line.

Activities That Don’t Trigger Registration

Both the corporate and LLC statutes list activities that, on their own, do not count as transacting intrastate business. This matters because registering unnecessarily commits you to the $800 annual franchise tax. The safe harbors in Sections 191 and 17708.03 include:3California Legislative Information. California Corporations Code CORP 1914California Legislative Information. California Corporations Code CORP 17708.03

  • Maintaining or defending a lawsuit, arbitration, or administrative proceeding in California.
  • Holding board, shareholder, or member meetings in the state.
  • Keeping accounts at California financial institutions.
  • Making sales through California-based independent contractors.
  • Soliciting orders from California customers when those orders must be accepted outside the state to become binding.
  • Completing a single transaction within 180 days, if it isn’t part of a pattern.
  • Creating or acquiring debt instruments, mortgages, or security interests on California property.
  • Being a shareholder, limited partner, or member of a California entity.

The statute says “solely by reason of.” If your California activity never leaves this list, you don’t need to register. Combine two or three of these with regular customer-facing sales, though, and the overall picture may push you across the line.

How to File the Application

The form depends on your entity type. Foreign corporations file the Statement and Designation by Foreign Corporation (Form S&DC-S/N).5California Secretary of State. Statement and Designation by Foreign Corporation Foreign LLCs file the Application to Register a Foreign Limited Liability Company (Form LLC-5). Both are available through the Secretary of State’s bizfile portal or as downloadable PDFs.

Each form collects the same core information:

  • The entity’s legal name and its state or country of formation.
  • The principal office street address, plus a California office address if one exists.
  • The name and address of a California agent for service of process.
  • A statement that the entity is in good standing in its home jurisdiction.

You must designate an agent for service of process in California. The agent can be an individual California resident with a physical street address, or a corporate agent registered with the Secretary of State.6California Secretary of State. Instructions for Completing the Statement and Designation by Foreign Corporation Form S and DC-S/N Commercial agent services typically run $35 to $350 per year.

Documents You Need to Attach

Both corporations and LLCs must attach a certificate of good standing (sometimes called a certificate of existence or status) from the agency that originally formed the entity. The certificate has to be dated within six months of the day you submit your California application.1California Legislative Information. California Corporations Code CORP 21052California Legislative Information. California Corporations Code CORP 17708.02 Most home states charge $5 to $175 to issue it, and many can turn it around electronically in a few days.

California does not require certified copies of your Articles of Incorporation or Articles of Organization. The certificate of good standing is the only attachment the statute demands.

Signatures and Filing Methods

Online submissions through the Secretary of State’s portal accept electronic and digital signatures. Paper filings need a handwritten signature from a corporate officer, or a manager or member for LLCs. Computer-generated script fonts don’t qualify as signatures on paper forms.7California Secretary of State. Filing Tips

You can file online, by mail, or in person at the Secretary of State’s Sacramento office. Counter drop-off adds a $15 service fee.5California Secretary of State. Statement and Designation by Foreign Corporation

Filing Fees and Processing Times

Base filing fees are:

  • Foreign stock corporation (Form S&DC-S/N): $100.
  • Foreign nonprofit corporation: $30.
  • Foreign LLC (Form LLC-5): $70.

Payment is by check, money order, or credit card for online submissions.8California Secretary of State. Business Entities Fee Schedule

Standard processing currently runs about one to six business days for online submissions and slightly longer for mail filings, based on the Secretary of State’s posted processing dates.9California Secretary of State. Current Processing Dates Two expedited tiers are available:10California Secretary of State. Service Options

  • 24-hour service: $350 additional, response guaranteed within 24 hours of submission (excluding weekends and holidays). Available online or at the Sacramento drop-off counter.
  • Same-day service: $750 additional. Documents must arrive by 9:30 a.m., with a response by 4:00 p.m. the same day.

Handling a Name Conflict

Your entity’s legal name must be distinguishable from existing California records for the same entity type and must not mislead the public.11California Secretary of State. Name Reservations If a California company already uses your name, you can’t register under it no matter how long you’ve operated under that name elsewhere.

Both the foreign corporation and foreign LLC statutes let you adopt an alternate name for California use. You list the alternate name on the registration form, and it becomes your official California operating name while your legal name stays intact in your home state.1California Legislative Information. California Corporations Code CORP 2105

Before you file, run a free name availability search through the Secretary of State’s business entity database. If you want to lock in a name while you prepare the application, you can reserve it for 60 days by filing a Name Reservation Request. The reservation costs $10 by mail or $20 in person.

Keeping the Registration Active

A California Certificate of Authority doesn’t expire, but keeping it in good standing takes ongoing work. If you fall behind, the Franchise Tax Board can forfeit your right to do business in California.

Statements of Information

Foreign corporations file a Statement of Information every year. Foreign LLCs file every two years, with the first one due within 90 days of initial registration.12California Secretary of State. Instructions for Completing the Statement of Information Form LLC-12 The filing updates your principal office address, officers or managers, and agent for service of process. Missing the deadline triggers a $250 penalty collected by the Franchise Tax Board.13Franchise Tax Board. Limited Liability Company

The $800 Annual Franchise Tax

Every corporation or LLC registered or doing business in California owes an $800 minimum franchise tax each year, regardless of revenue. Foreign corporations newly qualifying in California owe no minimum franchise tax in their first taxable year.14Franchise Tax Board. Corporations Business Type Foreign LLCs registering in 2026 do not get this first-year exemption.13Franchise Tax Board. Limited Liability Company

LLC Fee Tied to California Income

LLCs owe an additional fee based on total California income, on top of the $800 tax:13Franchise Tax Board. Limited Liability Company

  • $250,000 to $499,999: $900.
  • $500,000 to $999,999: $2,500.
  • $1,000,000 to $4,999,999: $6,000.
  • $5,000,000 or more: $11,790.

An LLC earning $1.5 million in California income owes $6,800 per year before any income tax. Missing the estimated fee deadline brings penalties and interest.

Forfeiture for Unpaid Taxes

If your foreign entity falls behind on franchise tax payments, the Franchise Tax Board can forfeit its right to do business in California. Under Revenue and Taxation Code Section 23301, forfeiture can happen when any tax, penalty, or interest remains unpaid more than a year after the close of the taxable year.15California Legislative Information. California Revenue and Taxation Code RTC 23301 A forfeited entity loses the ability to use California courts, enter into contracts, or defend lawsuits. Reinstatement requires paying all back taxes, penalties, and interest, plus filing any delinquent returns. Anyone who exercises corporate powers on behalf of a forfeited entity faces a separate $250 to $1,000 penalty.16Franchise Tax Board. FTB 1024 Penalty Reference Chart

What Happens If You Operate Without Registering

Two consequences tend to surface at the worst possible time: you can’t sue in California, and daily penalties pile up.

A foreign corporation doing business in California without registering under Section 2105 cannot file or maintain a lawsuit in any California court on an intrastate business matter until it comes into compliance.17California Legislative Information. California Corporations Code CORP 2203 Before the court will let you proceed, you must register, pay a $250 penalty to the Secretary of State on top of standard filing fees, and provide receipts showing payment of all franchise taxes and other state taxes owed during the unauthorized period. You can’t sue a California customer for an unpaid invoice, enforce a contract, or pursue a claim until you’ve cleaned up both your registration and your tax history. California courts, meanwhile, can still exercise jurisdiction over you. An unregistered foreign company can be sued in California even when it can’t sue there.

Under Corporations Code Section 2203, a foreign corporation transacting intrastate business without a valid certificate may be fined $20 for each day it operated unregistered.17California Legislative Information. California Corporations Code CORP 2203 There is no statutory cap. The court sets the amount based on the circumstances, including the size of the corporation and how willfully it violated the requirement. Two years of unregistered operation could theoretically run over $14,000 in daily penalties alone, before back taxes and interest. Registering up front costs a few hundred dollars; cleaning up noncompliance after the fact routinely costs thousands.