If your enterprise is registered somewhere other than California and you “transact intrastate business" in the state, you must acquire a “foreign qualification" and California Certificate of Authority to do so. If you don't have the proper authorization to conduct business in California, you run the risk of fines and penalties and may even be liable for back taxes.
Getting a foreign qualification and California Certificate of Authority to do business requires a bit of paperwork gathering. Here are the five steps you need to take.
1. Fill out the application.
Which California Certificate of Authority application you must file depends on the type of entity you have registered in another state. For example, the appropriate Certificate of Authority for California for a limited liability company (LLC) is the Application to Register a Foreign Limited Liability Company in California (LLC) (Form LLC-5). For a limited partnership (LP), you must submit an Application for Registration of a Foreign Limited Partnership (LP) (Form LP-5).
All application forms require the same basic information about your business, including its name, address, state in which it was incorporated, the date of incorporation, and the name and address of the company's registered agent in California.
2. Get a Certificate of Good Standing.
As part of the application, you must also file a Certificate of Good Standing, which certifies that your business is up to date on taxes and other business filings, from the state in which your company is registered. This document must not be more than six months old.
3. Make sure your business's name is available.
Registering a foreign LLC in California requires that your business name not already be in use by another company. You may perform a preliminary name search yourself online or request that the California Secretary of State perform the search for you at no charge.
If your name isn't available, you must file a “Doing Business As" (DBA) with California.
4. Designate a registered agent.
As mentioned above, California requires that all companies doing business in the state have a registered agent, which is a person or entity, located within the state, that agrees to accept service of process and other official documents on behalf of the company. You must list this information on your application for foreign qualification in California.
5. File all of the paperwork and pay the appropriate fee.
The last step in the process is filing all of the above documents and paying the required fees to the California Secretary of State Business Programs Division, which is the agency that regulates businesses in California. If you need your application expedited, you can pay an extra fee for faster processing.
Whether you go through the Certificate of Authority process yourself or work with an online legal services company, you must be sure to follow all of the required steps carefully so you can avoid being penalized or fined for conducting business in California without proper authorization.