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Opening a new office in another state. Register a new LLC or Foreign LLC in new state? or another setup?

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jake1605

New member
Hello,

I own a small business, sole-member LLC, in the state od Pennsylvania. I am opening an office in California and I am faced with a few choices when it comes to the legal setup.

Should I register a new LLC in California or register my PA as a foreign LLC in CA? Another option would be is to setup a parent LLC and register 2 separate LLCs (owned by the parent LLC) in both PA and CA. If there are other options for this situation, please do share!

Thank you,
Jake
 


Taxing Matters

Overtaxed Member
If the new office is going to be operating the same business as the business you conduct in California then you are likely fine just registering your Pennsylvania LLC as a foreign LLC in California. Be aware that California does impose a minimun $800 franchise tax on any entity organized in California or that are a foreign (out-of-state) entity doing business in California. You might want to consult a business attorney in California to go over what is required in that state for the type of business you will conduct and for recommendations on how best to structure the business. California regulates a lot of things that other states do not, so do not assume that if your business is not regulated in PA that it will also not be regulated in CA.
 

jake1605

New member
If the new office is going to be operating the same business as the business you conduct in California then you are likely fine just registering your Pennsylvania LLC as a foreign LLC in California. Be aware that California does impose a minimun $800 franchise tax on any entity organized in California or that are a foreign (out-of-state) entity doing business in California. You might want to consult a business attorney in California to go over what is required in that state for the type of business you will conduct and for recommendations on how best to structure the business. California regulates a lot of things that other states do not, so do not assume that if your business is not regulated in PA that it will also not be regulated in CA.
Thank you very much for your input!
 

DanielJameson

New member
There are many advantages of LLC over any other business formation services. I am sharing a few benefits of LLC which I found online and more relevant:
By forming an LLC, only the LLC is liable for the debts and liabilities incurred by the business — not the members. The LLC typically does not pay taxes for itself. Instead, the net income/loss is "passed through" to the personal income of the owner(s)/member(s), and is simply taxed as personal income. Federally, LLC taxation is handled very much the same as a partnership or sole proprietorship, in the case of a single member LLC.
 

LdiJ

Senior Member
There are many advantages of LLC over any other business formation services. I am sharing a few benefits of LLC which I found online and more relevant:
By forming an LLC, only the LLC is liable for the debts and liabilities incurred by the business — not the members. The LLC typically does not pay taxes for itself. Instead, the net income/loss is "passed through" to the personal income of the owner(s)/member(s), and is simply taxed as personal income. Federally, LLC taxation is handled very much the same as a partnership or sole proprietorship, in the case of a single member LLC.
While this is accurate, its actually easier than you think to pierce the veil of an LLC and end up personally liable for its debts or liabilities. Particularly in a single member LLC.
 

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