I am starting an online business. I will be dropshipping the products out of the Midwest so I will not have any actual business taking place at my home - everything will be done online. I was told as long as I did not have a physical business in California, I wouldn't need to register here. But now I am starting to question this advice. If I register in CA it will cost as much as just having the LLC here in the first place. And then there is the licensing requirements. Help!
You most likely do not need to create another corporate entity. However, you need to register your LLC as a foreign LLC doing business in California. If you are engaging in business from California in any capacity whatsoever e.g. monitoring your online sales, managing the business, you are doing business in California. Online businesses are tricky and subject you to the jurisdictions that you do business in e.g. other states you sell or offer your products to. These states each have their own set of laws that you need to comply with in addition to federal laws too. There may be sales tax issues that you need to discuss with your CPA. You are correct in that having a foreign LLC may cost you in duplicative fees, as you need to be registered in California as a corporate entity. It is a common myth that you can do business in California and incorporate in say, Nevada or Delaware and somehow avoid California rules and regulations.
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Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.
I agree with the preceding answer and would add one more point: You probably will need a business license from the appropriate local jurisdiction (city or county).