California is a notoriously bad state to do business in. Regulations, workers compensation and tax issues overwhelm companies. Seeking relief, many incorporate in Nevada. Unless done carefully, this decision can lead to disaster.
Doing Business – Jurisdiction
Jurisdiction is a legal term used to define who has authority over something. Applied to this article, the term refers to the issue of which state has the right to regulate a business. In California, the issue boils down to whether you are considered to be doing business in the state.
California is the one of the most aggressive states when it comes to defining jurisdiction. If you maintain offices or have employees in the state, you are considered to be doing business here. You must register with the state and pay taxes even if incorporated in another state. This tends to makes incorporating in Nevada an expensive option since you have to pay fees twice.
If you are caught doing business in California without having registered, you can be in for a rough time. Initially, back taxes and fees come due. You are also going to be fined and probably suspended from doing business until an audit...
To view and download this full PLR article, you must be logged in. Registration is completely free. Once you create your account, you will be able to browse, search & downlod from our PLR articles database of over "1,57,897+" on 1,000's of niches and 200+ categories without paying a penny. Click here to signup...
