California Business Portal

When would a limited liability company (LLC) be concerned about doing business in California?

California defines doing business as "actively engaging in any transaction for the purpose of financial or pecuniary gain or profit" (California Revenue and Taxation Code (R&TC) Section 23101(a)). In addition, LLCs are considered "doing business" in California if: 
  • It is a nonregistered foreign LLC that is a member of an LLC that does business in California.
  • It is a general partner in a partnership or limited partnership that does business in California.
  • Any of the LLC's members, managers, or other agents conducts business in California on behalf of the LLC.

For tax years that begin on or after January 1, 2011, a taxpayer is also doing business in California if: the LLC’s sales, real and tangible personal property, or the amount paid in California by the LLC for compensation exceeds the threshold amount. Threshold amounts are “indexed” each year by adjusting them to reflect changes in the California Consumer Price Index (CPI). 

Furthermore, to determine the amount of the LLC’s sales, property, and payroll for "doing business" purposes, they include its pro rata share of sales, property, and payroll from partnerships, LLCs treated as partnerships, and S corporations.

Regardless of where LLCs primarily conduct business, if any of their members, managers, or other agents conduct business in California on behalf of the LLC, the Franchise Tax Board will consider the LLC as doing business in California (R&TC Section 23101). Go to and search for doing business for more information.

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