An out-of-state business that plans to operate in California needs a California Certificate of Authority from the Secretary of State before it starts. Foreign corporations file a Statement and Designation by Foreign Corporation (Form S&DC-S/N); foreign LLCs file an Application to Register a Foreign Limited Liability Company (Form LLC-5). Both filings require a recent certificate of good standing from the home state, a designated California agent for service of process, and a filing fee of $100 for stock corporations, $30 for nonprofit corporations, or $70 for LLCs.1California Secretary of State. Business Entities Fee Schedule Once registered, the entity owes annual filings and the $800 minimum franchise tax. Skip registration and you cannot sue in California courts, and the state can fine you $20 for every day you operated without authority.2California Legislative Information. California Corporations Code CORP 2203
Who Has to Register
Corporations Code Section 2105 requires any foreign corporation to file a statement and designation with the Secretary of State before transacting intrastate business in California.3California Legislative Information. California Corporations Code CORP 2105 Section 17708.02 imposes the same duty on foreign LLCs.4California Legislative Information. California Corporations Code CORP 17708.02 The trigger is “repeated and successive” transactions in California that go beyond interstate or foreign commerce.5California Legislative Information. California Corporations Code CORP 191
The statutes don’t give a clean checklist, but the everyday markers are consistent. A physical office in California, employees based in the state, or ongoing revenue from California customers through direct sales (rather than through independent contractors) will almost always require registration.
Some activities are safe harbors on their own, meaning they don’t count as transacting intrastate business. Under Sections 191 and 17708.03, this includes defending or maintaining a lawsuit, holding internal meetings, keeping a California bank account, selling through independent contractors, soliciting mail-order sales that become binding only when accepted outside California, completing an isolated transaction within 180 days, and simply holding an ownership stake in a California entity.6California Legislative Information. California Corporations Code CORP 17708.03 The statute uses the phrase “solely by reason of.” One activity from the list is fine. Combine several with regular customer-facing sales and the picture usually crosses the line.
Registering when you don’t have to is not free either. Every registered entity owes the $800 annual minimum franchise tax whether or not it actually operates in the state, so read the safe harbors before assuming you need to file.
How to File
The paperwork itself is short. Both the corporate and LLC forms ask for the entity’s legal name and formation jurisdiction, the principal office address, a California office address if one exists, the name and address of a California agent for service of process, and a statement of good standing in the home state.
Every foreign entity must designate an agent for service of process in California. That agent can be an individual living in California with a physical street address there, or a commercial registered agent qualified with the Secretary of State.7California Secretary of State. Instructions for Completing the Statement and Designation by Foreign Corporation Form S and DC-S/N Commercial services generally charge between $35 and $350 per year.
The one required attachment is a certificate of good standing (some states call it a certificate of existence or certificate of status) from the agency that formed the entity. It must have been issued within six months of the date you submit the California application.3California Legislative Information. California Corporations Code CORP 2105 Home-state fees for the certificate typically run $5 to $175. California does not require certified copies of your Articles of Incorporation or Articles of Organization.
Online submissions accept electronic and digital signatures. Paper filings need a handwritten signature from a corporate officer, or a manager or member for LLCs. A computer font that looks like a signature will be rejected.8California Secretary of State. Filing Tips You can file online through the Secretary of State’s bizfile portal, by mail, or in person in Sacramento. Counter drop-offs carry an extra $15 service fee.9California Secretary of State. Statement and Designation by Foreign Corporation
Fees and Processing Times
Base filing fees:
- Foreign stock corporation (Form S&DC-S/N): $100
- Foreign nonprofit corporation: $30
- Foreign LLC (Form LLC-5): $70
Payment is by check, money order, or credit card for online submissions.1California Secretary of State. Business Entities Fee Schedule Standard online processing currently runs about one to six business days; mail filings take longer.10California Secretary of State. Current Processing Dates Two expedited tiers are available: 24-hour service for an additional $350, and same-day service for an additional $750 when documents arrive by 9:30 a.m.11California Secretary of State. Service Options
If Your Name Is Already Taken
Your legal name has to be distinguishable from names already on file for the same entity type in California, and it can’t be likely to mislead the public.12California Secretary of State. Name Reservations If a California business already uses your name, how long you’ve operated under it elsewhere does not matter.
Both statutes offer a workaround. Section 2105 lets a foreign corporation adopt an alternate name for California use, and Section 17708.05 does the same for LLCs. You list the alternate on the registration form; it becomes your California operating name while your legal name stays intact at home. Run a free name availability search through the Secretary of State’s business entity database before filing. If you want to lock a name in first, a Name Reservation Request holds it for 60 days and costs $10 by mail or $20 in person.
What You Owe Every Year After Registering
A California Certificate of Authority does not expire, but staying in good standing takes several recurring filings and payments. Miss them and the Franchise Tax Board can forfeit your right to do business in the state.
Statements of Information
Foreign corporations file a Statement of Information every year. Foreign LLCs file every two years, with the first one due within 90 days of initial registration.13California Secretary of State. Instructions for Completing the Statement of Information Form LLC-12 These filings refresh your principal address, officers or managers, and agent for service of process. Missing one triggers a $250 penalty collected by the Franchise Tax Board.14Franchise Tax Board. Limited Liability Company
The $800 Annual Franchise Tax
Every registered corporation and LLC owes California’s $800 minimum franchise tax each year, regardless of revenue. Foreign corporations newly qualifying in California owe no minimum franchise tax in their first taxable year.15Franchise Tax Board. Corporations Business Type Foreign LLCs registering in 2026 do not get this first-year break.14Franchise Tax Board. Limited Liability Company
The LLC Income Fee
LLCs also pay a separate income-based fee on top of the $800 tax:14Franchise Tax Board. Limited Liability Company
- $250,000 to $499,999 in California income: $900
- $500,000 to $999,999: $2,500
- $1,000,000 to $4,999,999: $6,000
- $5,000,000 or more: $11,790
An LLC with $1.5 million in California income owes $6,800 per year before any income tax. Missing the estimated payment by the original return due date brings penalties and interest.
Forfeiture
If tax, penalty, or interest goes unpaid for more than a year after the close of the taxable year, Revenue and Taxation Code Section 23301 lets the Franchise Tax Board forfeit a foreign entity’s right to do business in California.16California Legislative Information. California Revenue and Taxation Code RTC 23301 A forfeited entity cannot use California courts, enter contracts, or defend suits. Reinstatement requires paying every back tax, penalty, and interest charge and filing every delinquent return.
What Happens If You Skip Registration
Two consequences drive most enforcement, and both surface at bad moments.
You Cannot Sue in California
A foreign corporation transacting intrastate business without registering under Section 2105 cannot file or maintain a lawsuit in any California court on intrastate business until it comes into compliance.2California Legislative Information. California Corporations Code CORP 2203 To move a case forward you must register, pay a $250 penalty to the Secretary of State on top of the standard filing fees, and produce receipts showing payment of all franchise and state taxes owed during the unregistered period. Until then, you cannot sue a California customer for nonpayment, enforce a contract, or pursue an IP claim in state court. California courts can still exercise jurisdiction over you, so you can be sued in California even while you’re blocked from suing there.
$20 Per Day, No Cap
Section 2203 also allows a fine of $20 for each day a foreign corporation transacts intrastate business without a valid certificate.2California Legislative Information. California Corporations Code CORP 2203 The statute sets no ceiling. The court sizes the penalty based on the circumstances, including the corporation’s size and how willfully it ignored the requirement. Two years of unregistered operation can produce more than $14,000 in daily penalties alone, before back taxes and interest.
Anyone who exercises corporate powers on behalf of an entity already forfeited by the Franchise Tax Board can be fined an additional $250 to $1,000.17Franchise Tax Board. FTB 1024 Penalty Reference Chart Registering up front costs a few hundred dollars. Cleaning up after the fact routinely costs thousands.