California, like most states, provides that “any foreign corporation which transacts intrastate business and which does not hold a valid certificate from the Secretary of State may be subject to a penalty.” Foreign limited liability companies are considered to be transacting business if they enter into repeated and successive transactions of business in the state other than:
1) maintaining or defending a lawsuit;
2) carrying on an activity concerning internal affairs;
3) maintaining bank accounts;
4) maintaining an office for the management of an entity’s own securities;
5) selling through independent contractors;
6) soliciting or obtaining orders that require acceptance outside of the state before they become contracts;
7) creating or acquiring indebtedness in real or personal property;
8) securing or collecting debts;
9) conducting an isolated transaction completed within 180 days;
10) transacting interstate commerce; or
11) being a limited partner, member of an llc, shareholder, etc.

California’s franchise tax board considers “doing business” in California to be any of the following: 1) engaging in any transaction for the purpose of financial gain within California; 2) organizing or commercially domiciling in California; 3) selling more than $610,395 worth of products or services; 4) owning more than $61,040 of real or personal property; or 5) exceeding $61,040 in California payroll.

Wayfair Nexus

Sales of over $500,000 in preceding or current calendar year.


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