Can a Delaware LLC Operate in California? Registration & Fees

A Delaware LLC can operate in California, but it has to register as a foreign LLC with the California Secretary of State before it starts doing business in the state, and once it registers it owes California an $800 annual franchise tax along with a possible gross receipts fee tied to its California income.¹² The company keeps its Delaware existence, its Delaware governing law, and its Delaware tax bill; California is added on top, not swapped in.

When California Registration Kicks In

California requires a foreign LLC to register once it “transacts intrastate business,” meaning repeated and successive transactions inside the state that go beyond interstate commerce.¹ There is no bright line. The clearest triggers are a California office, warehouse, or storefront, employees working in the state, or income-producing property located there.

The Franchise Tax Board runs a parallel test for tax purposes. It treats an LLC as doing business in California if the company engages in any transaction for financial gain in the state, or if its California payroll, property, or sales cross annual thresholds. For 2025, those thresholds are $75,707 for payroll or property and $757,070 for sales, and they are adjusted each year.³ Crossing any one of them creates a California tax obligation even when the underlying activity might not obviously look like “intrastate business” under the Corporations Code. If you have a remote employee in California or meaningful California revenue, assume both obligations apply.

Activities That Don’t Count

The statute carves out several activities that do not, by themselves, require a foreign LLC to register:⁴

Defending a lawsuit or settling a claim in California.
Holding member or manager meetings in the state.
Keeping bank accounts at California financial institutions.
Completing an isolated transaction within 180 days that isn’t part of a pattern.
Conducting interstate commerce, including shipping goods through California.
Making sales through independent contractors based in California.
Soliciting orders from California customers where the orders are accepted outside the state.
Owning an interest in another California LLC or holding shares in a California corporation.

These safe harbors are narrow. A company that hires a California independent contractor, then opens a small office to support them, then signs a local lease has quietly moved out of the safe harbor and into intrastate business.

How to Register as a Foreign LLC in California

Confirm the Name Is Available

Search the Secretary of State’s business database for your LLC’s exact name. If it conflicts with a registered California entity, you can adopt an alternate name for use in California; the statute allows it.¹

Order a Delaware Certificate of Good Standing

California requires a certificate of good standing from Delaware issued within six months before you file the application.¹ Order it from the Delaware Division of Corporations close to the time you plan to file, so it doesn’t expire while California is still processing.

Appoint a California Registered Agent

Your LLC needs an agent with a physical California street address who can accept legal papers on the company’s behalf. That can be an individual California resident or a corporation authorized to serve as an agent.¹ Commercial services generally charge between $35 and $350 per year.

File Form LLC-5

Registration is done on Form LLC-5, the Application to Register a Foreign Limited Liability Company. It asks for the LLC’s exact Delaware legal name, its principal business address, and the name and address of its California agent, and it must be submitted with the Delaware certificate of good standing. The filing fee is $70.⁵ You can file online through the BizFile portal, by mail, or in person in Sacramento. Online filings are usually processed within a few business days; mail filings can take several weeks depending on backlog.⁶ Once approved, the filed copy of Form LLC-5 is your certificate of registration.

What California Will Cost Every Year

The $800 Franchise Tax

Every LLC registered in California owes an $800 annual franchise tax to the Franchise Tax Board, whether or not it earns any revenue.⁷ It continues every year until you formally cancel the California registration. A Delaware LLC registering now owes the full $800 in its first tax year.

The Gross Receipts Fee

On top of the $800, California imposes an additional fee once California-source total income crosses $250,000:⁸

$250,000 to $499,999: $900
$500,000 to $999,999: $2,500
$1,000,000 to $4,999,999: $6,000
$5,000,000 or more: $11,790

“Total income” here is not net profit. It is gross income plus cost of goods sold attributable to California, so the fee can land on an LLC that is barely breaking even.⁸ The estimated fee is due by the 15th day of the sixth month of the LLC’s taxable year, which is June 15 for calendar-year filers, and underpayment triggers a 10% penalty on the shortfall.⁹

Statement of Information

Within 90 days of registering, the LLC must file a Statement of Information (Form LLC-12) with the Secretary of State, reporting its principal address, its manager or CEO, and its registered agent. The fee is $20.¹⁰ An updated statement is then due every two years during a six-month filing window keyed to the original registration date. Missing it can bring Franchise Tax Board penalties and eventual suspension of the LLC.¹¹

Delaware Doesn’t Go Away

Registering in California doesn’t reduce what Delaware charges. Your LLC continues to owe Delaware’s $300 annual franchise tax by June 1 each year. Delaware doesn’t require an annual report for LLCs, but a late tax triggers a $200 penalty plus 1.5% monthly interest, and losing Delaware good standing puts the California registration at risk because California expects the LLC to be authorized in its home state.¹²

Add it up and the annual floor for a Delaware LLC registered in California is roughly $1,100 in taxes alone: $800 to California, $300 to Delaware. Registered agents in both states and any gross receipts fee push it higher. For a small operation, forming in California from the start is often cheaper than the two-state structure.

If You Operate Without Registering

Skipping registration doesn’t void the LLC and doesn’t invalidate its contracts, but it creates real exposure.¹³

The biggest immediate consequence is that an unregistered foreign LLC cannot file or maintain a lawsuit in any California court.¹³ You can still be sued and can still defend, but you cannot enforce your own rights until you register and clear any outstanding fees and taxes. A customer who refuses to pay or a partner who breaches has leverage they should not have.

The good news is that a member or manager is not personally liable for the LLC’s debts merely because the company operated in California without a certificate of registration.¹³ The liability shield survives the compliance failure.

On the tax side, the Franchise Tax Board will still bill the LLC for the $800 tax for every year it was doing business in California, plus any gross receipts fees, interest, and penalties.⁷ And if a dispute arises, the Secretary of State is automatically deemed the unregistered LLC’s agent for service of process, so a plaintiff can serve the state and reach the company even without a California agent on file.¹³

1
California Legislative Information. California Corporations Code 17708.02
2
California Legislative Information. California Revenue and Taxation Code 17941
3
State of California Franchise Tax Board. Doing Business in California
4
California Legislative Information. California Corporations Code 17708.03
5
California Secretary of State. California Form LLC-5 Application to Register a Foreign Limited Liability Company
6
California Secretary of State. Current Processing Dates
7
State of California Franchise Tax Board. Limited Liability Company
8
California Legislative Information. California Revenue and Taxation Code 17942
9
Franchise Tax Board. Instructions for Form FTB 3536, Estimated Fee for LLCs
10
California Secretary of State. Instructions for Completing the Statement of Information Form LLC-12
11
California Secretary of State. Statements of Information Filing Tips
12
Delaware Division of Corporations. LLC/LP/GP Franchise Tax Instructions
13
California Legislative Information. California Corporations Code 17708.07