All Forum Posts by: Eishay Smith

http://www.corporateservicecenter.com/nevada-california-comparison.html
quote:
Regarding California's position on limited liability, Robert B. Thompson wrote in Piercing the Corporate Veil: An Empirical Study (76 Cornell L. Rev. 1036, 1052 (1991)) that "a perception [exists] that public policy in California favor[s] piercing the corporate veil." According to Thompson's study, among the states with the largest number of reported veil piercing decisions, California courts pierce the corporate veil at the highest rate - 45% of attempted veil piercing cases in California are successful. The case law in California allows for piercing the corporate veil in TWENTY-EIGHT different circumstances. (Associated Vendors, Inc. v Oakland Meat Co., 26 Cal. Rptr. 806, 813-15 (Cal. App. 1962))

got conflicting replays from CPAs and attorneys.

A Limited Partnerships give almost no asset protection

According to Legal Ruling 2011-01 of CA, if I manage an foreign LLC I must register it at CA and thus loose the benefits of say Nevada LLC.
""If the activities of A or B constitute "doing business" in California, X and Y are also "doing business" in California due to their ownership of the disregarded entities. As a result of "doing business" in California, X and Y have substantial nexus with California.""

I heard that there's an option of creating a CA partnership to own the LLC, but my CPA is not sure its going to work.

Any recommendations?

Hi,

I live in California and have few properties in Texas, planning to invest in other states as well.
I would like to create an LLC for the properties. Creating one in CA is expensive ($800 franchise tax/year) and has less asset protection (piercing the veil in CA is common). On the other hand, according to Legal Ruling 2011-01 of CA, if I manage an foreign LLC I must register it at CA and thus loose the benefits of say Nevada LLC.
""If the activities of A or B constitute "doing business" in California, X and Y are also "doing business" in California due to their ownership of the disregarded entities. As a result of "doing business" in California, X and Y have substantial nexus with California.""

I heard that there's an option of creating a CA partnership to own the LLC, but my CPA is not sure its going to work.

Any recommendations?

Thanks,
Eishay