Ordinance in Cleveland makes it a first degree misdemeanor to buy property in an LLC without registering the LLC to do business in Ohio. Know of an LLC that just got convicted on two counts. $500 fine for each count, required disclosure of 1065, and "inactive community control" for 2 years. Community organizer showed up and LLC's need to report to him on properties. And they are "in the system" and "being watched". Oh yeah, and about ten grand in attorneys' fees.

First, this particular ordinance is absurd.  Typical NE Ohio socialism/fascism/Mandarin bureaucratic overkill.  One of many idiotic local ordinances.  Not a good place to do business.

But.

States are understandably not happy when people ask for the protection of the law (asset protection) but fail to follow it (register in state for a modest fee).  OH normally starts with a fine of $10k for such "deceptive business practices".  CA does not allow such an entity standing in court.  All understandable.

I'd think twice before using an unregistered out-of-state entity to "save money" on registration.  Better yet, use an in-state entity.

I believe this is the part where the Asset Protection Salesmen tell me how using trusts will magically solve the problem.  

Good luck with that.

Bottom line:  If you want the protection of the law, follow the law.