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Kendall Law Featured Image October 2020

Can I incorporate in a different state to save money?

Businesses should not necessarily incorporate their business entities in a different state in order to save money. Investors may consider the annual $800 Franchise tax required for business entities that are incorporated, registered, or doing business in California, onerous.

However, all business entities in California are required to register with the California Secretary of State and to pay the Franchise tax. Those caught doing business in California with unregistered entities incorporated elsewhere, will pay the financial penalties imposed by the California Franchise Tax Board. Such penalties include an additional 10% penalty of the unpaid/underpaid amount (Revenue and Taxation Code 17942). Consequently, it is highly advised that all companies planning to do business in California, incorporate in California.

For your own protection, please seek the advice of a qualified tax professional regarding all tax matters. If you need help in establishing your business entity for real estate investments or other business endeavors, contact Kendall Law. Ms. Eileen Kendall of Kendall Law is a skilled attorney with over 15 years of experience counseling businesses.  For a consultation, contact Kendall Law at (310) 619-4941. 

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Part of Kendall Law’s Best Business Practices blog series

Next time, we’ll cover the differences between an LLC, a trust and an insurance policy.
Have a question or need help with your business? Let us know.

Author: Eileen Kendall

eileen-kendall-attorney-kendall-law
Eileen Kendall is the Founder of Kendall Law; a real estate and business litigation firm. She has been practicing in the field of litigation, with a particular emphasis on real property and business since 2002. Eileen has successfully prevailed on both appeals and trials. Based on her background in practicing law for over 15 years, Eileen’s clients truly appreciate the time and effort she puts into every aspect of their legal needs.

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Kendall Law, A Professional Law Corporation is a civil litigation firm, specializing in real estate litigation, landlord matters and evictions, contract and lease review and drafting, contractual disputes and business law. We help real estate professionals, property owners, landlords, property managers and business owners. We are a woman-owned business based in Torrance, serving clients throughout Los Angeles, Orange County, and Southern California as well as the South Bay,  including Torrance, Lomita, Carson, Redondo Beach, Hermosa Beach, Manhattan Beach, and El Segundo. Disclaimer: Information contained on this site is provided ONLY as a service. It must not be considered specific legal counsel or advice. Contacting our office does not automatically create an Attorney-Client relationship. A formal written agreement must be executed with Kendall Law, a Professional Law Corporation first.