Thank you all for clarifying our issues. Looks like we are
tilting towards keeping status quo and continue as IL LLC.

Once again many thanks

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katiej_1958[at]yahoo.com (Katie Jaques) wrote:
- quote -

Exactly. California Corporations Code section 17451 says, in
relevant part,

"(a) Before transacting intrastate business in this state, a
foreign limited liability company shall register with the
Secretary of State. In order to register, a foreign limited
liability company shall submit to the Secretary of State an
application for registration as a foreign limited liability
company, signed by a person with authority to do so under
the laws of the state of its organization, on a form
prescribed by the Secretary of State and setting forth:

(1) The name of the foreign limited liability company
and, if different, the name under which it proposes to
transact business in this state.

(2) The state and date of its organization and a
statement that the foreign limited liability company is
authorized to exercise its powers and privileges in that
state.

(3) The name and address of an agent for service of
process on the foreign limited liability company meeting the
qualifications specified in paragraph (1) of subdivision (d)
of Section 17061, unless a corporate agent is designated, in
which case only the name of the agent shall be set forth.

(4) A statement that the Secretary of State is appointed
the agent of the foreign limited liability company for
service of process if the agent has resigned and has not
been replaced or if the agent cannot be found or served with
the exercise of reasonable diligence.

(5) The address of the principal executive office of the
foreign limited liability company and of its principal
office in this state, if any.

"(b) Annexed to the application for registration shall be a
certificate from an authorized public official of the
foreign limited liability company's jurisdiction of
organization to the effect that the foreign limited
liability company is in good standing in that jurisdiction,
if the laws of that jurisdiction permit the issuance of
those certificates; or, in the alternative, a statement by
the foreign limited liability company that the laws of its
jurisdiction of organization do not permit the issuance of
those certificates."

In addition to the minimum tax that Katie noted, there may
be an additional fee for a foreign LLC qualifying to do
business in California. The last time I did one of these
for a corporation there was an additional charge of about
$500.

Stu

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katiej_1958[at]yahoo.com (Katie Jaques) wrote:

- quote -

Sorry, that last sentence is misleading. The nonresident
member owes tax to California on the portion of the LLC's
income from California sources. The resident member owes
tax to California on his entire distributive share of
income from the LLC, from all sources.

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ysamba[at]hotmail.com (A Yarlagadda) wrote:

- quote -

Yes, your LLC is doing business in California and must
register with the California Secretary of State and must
file Form 568 and pay the $800 minimum tax plus the fee
based on total income.

- quote -

I can think of no reason to keep an address for the LLC in
Illinois if it is no longer doing business there. Since the
LLC is organized in Illinois it may be required to continue
filing information returns there. However, if it has no
activity in Illinois, no income will be apportioned to
Illinois and there will be no income subject to the 1.5%
property tax replacement tax. You may want to consider
reorganizing the LLC in California or Texas.

- quote -

Use whatever address is most convenient for business
purposes. NEVER let the state tax tail wag the business
dog! But it really doesn't matter for state tax purposes
what mailing address you use. State taxes are driven by
where the business is conducted, not where it gets its mail.

- quote -

LLC is not a very good vehicle in Texas because Texas
imposes its franchise tax on the LLC as if it were a C
corporation. As noted above, you probably need to continue
filing in Illinois as long as the LLC is organized there,
and if it did any business in Illinois in 2003, it will have
some income subject to the 1.5% replacement tax. It must
also file in California and Texas because it is doing
business there.

- quote -

Probably all three, as noted above.

As members, each of you is a taxpayer in each of those
states as well. As you know, there is no individual income
tax in Texas, so neither of you will be required to file
there. Both of you are required to file in California (one
resident, one nonresident) and pay tax to California on the
portion of the LLC's income that arises from California
sources. Same thing in Illinois. Income is sourced to the
states by an apportionment formula. For California
purposes, the formula consists of three factors (property,
payroll, sales) with the sales factor double weighted.
Illinois uses a single factor of sales or gross receipts.

You probably need professional help to prepare your returns
and those of the LLC this year.

Katie in San Diego

The foregoing is intended for educational purposes only and
does not constitute legal or professional advice.

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We are a two owners/members owned LLC, incorporated in IL
and been there since 2001. Both the owners/members were
working in IL at that time, so we incorporated there and
have been filing Personal (including LLC's Income) Federal
and IL State taxes.

However in 2002, significant amount of our revenues started
coming from CA, b'cos one of us moved to CA to work for a
customer in California. In 2002, the member who moved to CA,
did pay CA State taxes (along with his part of LLC income)
as CA is his residence state.

Question1: Do we have to register our LLC with Franchise Tax
Board of California as a Foreign LLC ? (Form CA 568 etc..)
and pay the minimum dues? Only now we came to know of
this...so checking out for help.

In Nov 2003, the other member who was still in IL, moved to
TX as part of job relocation (also happens to work as
employee of another company. He takes care of billing,
filing etc. for our LLC). As of now we are expecting
significant revenues for our LLC to flow from CA customers
(even through 2004 and possibly 2005).

Now we were wondering the following..

Question2. Does continuing to keep the IL business address
with Legal authorities (IRS, State taxes) makes sense? Is
there any long term benefit of having record of doing
business in same state? (We would like to use a IL freinds
house address as our LLC address....any issues with this)

Question3: For our customers and suppliers, we intend to
give TX address (as one of the member is there to handle
office work) where all invoices and checks could be sent for
clearance. Is this ok or any issues?

Question4: For year 2003, which state taxes should we file
for the LLC -- IL, Part TX and also foreign LLC fees for CA
??

Question5: For year 2004, which state taxes should we file
for the LLC - IL, TX, CA.

many thanks

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