An out-of-state LLC doing business in California must register with the California Secretary of State as a foreign LLC, appoint a California agent for service of process, and pay California’s $800 annual franchise tax along with any gross receipts fee its income triggers. Skipping registration doesn’t keep you out of California’s reach; it just strips your LLC of the right to sue in California courts while back taxes and penalties accumulate.
When Your LLC Has to Register
California uses two separate tests, and tripping either one is enough. The Secretary of State looks at the nature of your activity. The Franchise Tax Board looks at the numbers.
The Intrastate Business Test
The Secretary of State requires registration from any foreign LLC “transacting intrastate business,” meaning entering into repeated and successive transactions within California other than interstate or foreign commerce.1California Secretary of State. Frequently Asked Questions You don’t need an office or employees in the state to cross this line. Regularly holding business meetings in California, keeping warehouse space, or having agents solicit customers there can all count. The pivotal word is “repeated.” A single deal is not a pattern.
The FTB Dollar Thresholds
Even if your activity doesn’t obviously fit the intrastate standard, the FTB treats your LLC as doing business in California if it exceeds any of these amounts (adjusted annually; the 2025 figures are shown):
- California sales of more than $757,070, or 25% of total sales, whichever is less
- Real and tangible personal property in California of more than $75,707, or 25% of total property
- California payroll of more than $75,707, or 25% of total payroll
Any one threshold is enough.2Franchise Tax Board. Doing Business in California The payroll rule catches employers with remote workers: even one employee working from California generates California payroll.
Activities That Don’t Trigger Registration
California recognizes a narrow list of activities that, standing alone, do not amount to transacting intrastate business:
- Maintaining or defending a lawsuit in California
- Holding internal member or manager meetings
- Keeping a California bank account
- Collecting debts or securing obligations
- Isolated transactions completed within 180 days that aren’t part of a recurring pattern
- Interstate commerce that merely passes through California
- Soliciting orders that require out-of-state acceptance before becoming binding
These safe harbors are narrower than they look. Order solicitation is protected only if the order isn’t binding until accepted outside California; a sales rep who closes on the spot doesn’t qualify.3Department of Financial Protection and Innovation. 00-1 The isolated transaction carve-out has a hard 180-day limit; a project that runs longer stops being isolated no matter what you call it.
A Hard Stop for Some Professions
California bars LLCs, domestic or foreign, from banking, insurance underwriting, and trust company services. It also prevents any LLC from rendering professional services as defined in the Corporations Code, which covers licensed professions such as law, medicine, architecture, and accounting.4California Legislative Information. California Corporations Code CORP 17701.04 If that’s your business, registering as a foreign LLC isn’t an option, and you’ll need a different entity structure to operate in California.
How to Register
Registration runs through the Secretary of State on Form LLC-5, the Application to Register a Foreign Limited Liability Company. The filing fee is $70, and you can file online through the bizfile Online portal or by mail.5California Secretary of State. Form LLC-5 – Application to Register a Foreign Limited Liability Company
Before you file, pull together:
- A Certificate of Good Standing (or Certificate of Existence) from your home state, issued within the past six months
- The exact legal name of your LLC, plus an alternate name to use in California if yours conflicts with an existing California business name
- The date and state of formation
- A California agent for service of process — an individual resident or a registered corporate agent, with a physical California street address, not a P.O. box1California Secretary of State. Frequently Asked Questions
The agent’s name and street address become public record. Name conflicts are one of the most common reasons filings get rejected, so check availability first.
If you need the registration processed quickly, the Secretary of State offers expedited service on top of the $70 filing fee: $350 for 24-hour processing and $750 for same-day, with same-day submissions required by 9:30 a.m.6Legal Information Institute. California Code of Regulations 2-21905 – Expedited Filing of Documents Once approved, you’ll receive endorsed registration documents as proof of authority to do business in the state.
What You’ll Owe Every Year
Registration is the beginning of an ongoing relationship with two California agencies.
The $800 Annual Franchise Tax
Every LLC doing business in California or registered with the Secretary of State owes an $800 annual tax to the FTB. It’s due by the 15th day of the fourth month after the start of each tax year — April 15 for calendar-year filers. The tax applies whether the LLC has California revenue or not, and it keeps accruing until you formally cancel your registration.7Franchise Tax Board. Limited Liability Company
The Gross Receipts Fee
If your California income reaches $250,000 or more, you also owe an additional fee, estimated and paid by the 15th day of the sixth month of the current tax year (June 15 for calendar filers):
- $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
The fee is based on total California income, not profit.7Franchise Tax Board. Limited Liability Company An LLC with $2 million in California revenue and thin margins still owes $6,000.
Statement of Information
You also file a Statement of Information (Form LLC-12) with the Secretary of State. The initial filing is due within 90 days of registration, and after that every two years in the anniversary month of your registration. The fee is $20.8California Secretary of State. Instructions for Completing the Statement of Information Form LLC-12NC A missed deadline triggers a $250 penalty. If you still haven’t filed 60 days after a delinquency notice, the Secretary of State refers the penalty to the FTB for collection.1California Secretary of State. Frequently Asked Questions
What Happens If You Don’t Register
An unregistered foreign LLC cannot file or maintain a lawsuit in any California court.9California Legislative Information. California Corporations Code CORP 17708.07 Your LLC can still be sued; it just can’t sue anyone else. A California customer who refuses to pay a $500,000 invoice knows you have no remedy until you register and clear your back taxes.
The state also deems the Secretary of State as your LLC’s agent for service of process while you’re operating unregistered.9California Legislative Information. California Corporations Code CORP 17708.07 Legal papers can be served on that office, and you may not learn about the lawsuit until a default judgment has already been entered.
Then there’s the FTB. It will pursue the $800 annual tax for each year your LLC should have been registered, plus any gross receipts fees you should have paid, plus interest and late-payment penalties.7Franchise Tax Board. Limited Liability Company Five years of non-compliance means at least $4,000 in back franchise tax before anything else is added.
Closing Out When You Leave California
If your LLC stops doing business in California, walking away isn’t enough. The $800 tax continues to accrue until you formally cancel, and cancellation has two steps.
First, request a tax clearance certificate from the FTB, confirming you’ve filed all required California returns and paid what you owe.10Legal Information Institute. California Code of Regulations 18-23334 – Tax Clearance Certificate If you haven’t filed a final return, you’re responsible for filing it within two months and fifteen days after the close of the month you stop doing business.
Then file a Certificate of Cancellation (Form LLC-4/7) with the Secretary of State before the tax clearance certificate expires. Filing is free and available online or on paper.11CA.gov. Certificate of Cancellation – Form LLC-4/7 If the clearance certificate lapses first, you’ll need a new one, and you’ll owe the minimum franchise tax for any additional tax year that begins while your registration is still active.