Foreign qualification with the Secretary of State in California refers to the process by which a business entity that was originally formed in another state or country seeks permission to operate in California. This legal procedure ensures compliance with state regulations and allows the business to conduct its operations within the state's jurisdiction.
There are 2 different ways to foreign qualify in California depending on your legal entity type and tax classification. Follow the guide below to help you register with the Secretary of State in California or use Mosey to do it.
Use Mosey to register with the Secretary of State in California.
Avoid the hassle of doing it yourself and use Mosey to automate foreign qualification, annual reports, and registered agent service.
California Foreign Qualification for LLC
A foreign limited liability company must first qualify with the California Secretary of State before doing business in the state. California defines "transacting intrastate business" (i.e., "doing business") as "entering into repeated and successive transactions of its business in this state, other than interstate or foreign commerce." Hiring employees in California is generally considered "doing business" in the state.
Sign up for an Online User Account
Visit bizfile Online to create an online user account with the Secretary of State.
Obtain a Certificate of Good Standing
California requires you to provide a valid Certificate of Good Standing from your home state issued within six months.
Establish a Registered Agent
Establish a registered agent in California designated to accept service of process. Your registered agent can be an individual who resides in California or a corporation authorized by the Secretary of State to act as an agent for service of process. Note: Your business cannot act as its own registered agent.
File an Application to Register a Foreign LLC
Go to bizfile Online then select "Registration - Out-of-State LLC" to file the Application to Register a Foreign LLC (Form LLC-5) with the Secretary of State.
California Foreign Qualification for C Corporation
A foreign business must first qualify with the California Secretary of State before doing business in the state. California defines "transacting intrastate business" (i.e. "doing business") as "entering into repeated and successive transactions of its business in this state, other than interstate or foreign commerce". Hiring employees in California is generally considered "doing business" in the state.
Sign up for an Online User Account
Visit bizfile Online to create an online user account with the Secretary of State.
Obtain a Certificate of Good Standing
California requires you to provide a valid Certificate of Good Standing from your home state issued within six months.
Establish a Registered Agent
You must have a registered agent in California designated to accept service of process. Your registered agent can be an individual who resides in California or a corporation authorized by the Secretary of State to act as an agent for service of process (1505 Registered Corporate Agents). Note: Your business cannot act as its own registered agent.
File a Statement and Designation by Foreign Corporation
Go to bizfile Online, then click "Registration" under your corporation type to file Form S&DC with the Secretary of State.
What else do I need to know?
Once you are registered with the Secretary of State, you may have additional requirements to maintain your "good standing" in the state. Failing to do so can result in fines, back taxes, and forfeiting certain priveleges within the state.
Maintaining a Registered Agent
Most states require that you have a registered agent that can receive important mail from the Secretary of State should they need to contact you. There are many commercial options available or you can use Mosey to be your registered agent and keep your information private in California.
Annual Reports and Taxes
In addition to maintaining a registered agent, most states require you to file a report annually. Registration can also trigger state taxes such as a franchise tax or income tax. You can use Mosey to identify these additional requirements to maintain good standing in California.
