Forming an LLC in which State?

Question

Hi,

I am planning on investing in multi-family properties in California and currently reside in California.  I would like to register as an LLC.  Which state should I register in?

Thanks in advance!

Jason

Ali Boone · Answer

That should be a question for your [hopefully real estate-friendly] accountant. Every situation is different.

There won't be much point to creating it in another state because California will still treat it as if it's a CA LLC because that's where you are doing business. The $800/year fee is unavoidable.

Katie L. · Answer

@Jason Stofer If you are a resident of CA and are investing in CA, is there a reason you are considering another state?  If you register in another state, you will have to file as a foreign LLC in CA since you will be doing business in CA.  You will owe the $800 minimum tax to CA whether you register in CA or out of state.  Maybe skip the hassle of having to register in another state and just create a CA LLC?  I don't know all the facts here or your full situation so I will refrain from giving my opinion but seems that would be the clear-cut answer based on your one-line post.  Not sure what city in CA you live in, but if you need referrals for attorneys or accountants, let me know.

*This post is not legal advice and is not to be relied upon.  Readers are advised to seek professional advice.  The post does not create an attorney-client nor CPA-client relationship.

Jason S. · Answer

@Katie Lepore Thank you! I'm new here and you answered the question I had.  I questioned it because many companies are registered in Delaware.  But, I am doing business herein California so I am registering here.

Thanks again!