California Foreign Registration · Operating unregistered
What happens if you do business in California without registering
A foreign corporation doing business in California without qualifying may be subject to $20 for each day (Corp. Code 2203(a)), while an unregistered LLC cannot bring a lawsuit or proceeding in the state until it registers. The LLC statute names court access as the main consequence.
Consequences by entity type
| Entity | Consequence | Statute |
|---|---|---|
| Foreign LLC | Cannot maintain an action or proceeding in California without a certificate of registration | Corp. Code 17708.07(a) |
| Foreign LLC | Can still defend any action brought against it | Corp. Code 17708.07(b) |
| Foreign LLC | A suit over its California work may be delivered to the Secretary of State | Corp. Code 17708.07(d) |
| Foreign LLC | Attorney General may seek an injunction against the unregistered business | Corp. Code 17708.09 |
| Foreign corporation | May be subject to $20 per day of unauthorized business, set by the court | Corp. Code 2203(a), (b) |
| Foreign corporation | Must pay $250, plus filing fees and back taxes, before continuing a suit started before it qualified | Corp. Code 2203(c) |
| Foreign corporation | Deemed to consent to California courts in civil cases arising here | Corp. Code 2203(a) |
The registration article also leaves open which contacts expose an LLC to lawsuits, taxes or regulation under other California laws (Corp. Code 17708.03(e)), so those rules bite whether or not the LLC registered.
How the corporate daily penalty is counted
For a corporation, the statute counts the days it is found to have been doing unauthorized intrastate business willfully, and the court sets the amount based on the circumstances, including the corporation's size and whether the violation was willful (subsection (b)). It is a prosecuted penalty, not an automatic bill from the Secretary of State.
Corporate penalty examples
| Days of unauthorized business | Highest daily-rate total | How it is made up |
|---|---|---|
| 30 days | $600 | 30 days at $20 |
| 180 days | $3,600 | 180 days at $20 |
| 365 days | $7,300 | 365 days at $20 |
These figures are ceilings if a court assessed the full daily rate. The statute says the court sets the amount, so the real figure can be lower, and an LLC is not subject to this daily penalty.
The court-access limit in practice
Imagine a Nevada LLC that has serviced customers in California for two years and now needs to sue one of them for an unpaid invoice. Until it registers, a California court will not hear the claim. Registering fixes the bar for the future, though for a corporation the statute also adds the $250 and the back taxes before a suit that was started early can go on. An unregistered LLC can still defend a suit against it without registering first.
Members, managers and shareholders
For an LLC, the statute protects owners: owners are not made liable for the LLC's obligations merely because it did business here unregistered (Corp. Code 17708.07(c)). Registration problems do not pierce the LLC by themselves. Ordinary rules about personal guarantees and contracts still apply.
Other California charges that look like penalties
| Situation | Charge | Source |
|---|---|---|
| LLC misses its Statement of Information, then 60 days pass after the delinquency notice | $250 | Corp. Code 17713.07(b) |
| LLC misses the Franchise Tax Board payment | Suspension risk through the Franchise Tax Board | Suspension and forfeiture rules |
| Entity suspended for missed filings | Loses the right to use its name in California | Secretary of State FAQ |
Details of the annual obligations are on the annual tax and Statement of Information page.
Fixing it
Register now. Order the home-state certificate of good standing, which has to be dated within 6 months, complete Form LLC-5 and file it for $70. A corporation files Form S&DC-S/N for $100 and, if it has a suit pending that it started early, pays the $250 penalty with the back taxes before the court will let the case continue. The Franchise Tax Board separately expects returns and tax for any year in which the company was doing business, whether or not it was registered.
California unregistered business questions
What are the consequences of registering a foreign LLC after starting business?
The consequences are the court-access bar and, for a corporation, the daily penalty of $20.
Can an unregistered LLC enforce a contract in California courts?
Not as a plaintiff, while it is transacting intrastate business without a registration. It can defend itself.
Does registering late cure past problems?
It lifts the bar going forward. The statute does not describe retroactive relief for an LLC.
Our fee, plus the state fee at cost
Register in California
California$199
+ $70 Secretary of State fee
- Form LLC-5 for an LLC or the Statement and Designation by Foreign Corporation for a corporation
- A current certificate from your home state, which we order
- Submitted to Sacramento through bizfile Online
- A California agent for service of process: ours, or the one you name
- The certificate of registration, sent to you once issued
- Renewal: after the first year, the agent service renews at $149 a year
Checkout lists our fee and the state fee as separate lines. The state fee is charged at cost. $199 plus the state fee, including your first year of registered agent service; after that the agent service renews at $149 a year.
Where these facts come from
- California Secretary of State, foreign LLC forms and fees
- California Corporations Code 17708.02 (application to register)
- California Secretary of State, Business Entities FAQs
- California Secretary of State, foreign corporation forms and fees
- California Secretary of State, foreign limited partnership forms and fees
- California Secretary of State, Form LP-5 (Application for Registration, Foreign LP)
- Franchise Tax Board, Form FTB 3522 instructions (LLC tax voucher)
- Franchise Tax Board, Form 568 booklet (annual LLC tax)
- California Corporations Code 2203 (penalty for unauthorized intrastate business)
- California Secretary of State, Form LLC-12 (Statement of Information) and instructions
- California Corporations Code 17713.07 (Statement of Information penalty)
- California Corporations Code 17708.03 (transacting intrastate business)
- California Corporations Code 17708.07 (no certificate of registration)
Registering an out-of-state company in California?
Order online, and we prepare the filing, get the certificate from your home state and file in Sacramento.