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LLC Question 96

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Question: I own rental property in California and two in Nevada. I want to form an LLC for each property in Nevada. I reside in California. Do I still have to file or register as a foreign LLC in the state of California for the property I own in California?

Response: A Nevada LLC owning real property in California would definitely have to file in California as a foreign LLC. On the other two with property in Nevada, at best, this is a gray area. If the Nevada LLCs have their registered agent and registered office in Nevada plus no formal offices in California, then I think the argument can be made that filing is not required in California as a foreign LLC. If activities are regularly undertaken in California on behalf of the Nevada LLCs such as meeting with clients or professional service providers, it could tip the scales and manadate filing in California. Management of the LLC should also occur in Nevada. The LLCs should not own any significant assets in California. The mere fact an LLC member resides in California does not, to my knowledge, require a foreign LLC to register with the State of California.

Submitted: 1-10-2007; Rory, CA
Response: 1-12-2007; JJR

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