Rancho Santa Margarita, CA asked in Tax Law and Business Law for California

Q: If I have a s corp in Michigan and doing business in CA as a foreign entity now living in CA should I move my s corp?

Originally lived in MI and moved to CA last year, not sure if there are any benefits to keeping it in MI since its an s-corp

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2 Lawyer Answers
James L. Arrasmith
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Answered
  • Tax Law Lawyer
  • Sacramento, CA
  • Licensed in California

A: As a foreign entity, your S corp is required to register with the state of California and obtain a certificate of qualification to do business in the state. Depending on the nature and scope of your business, there may be benefits to moving your S corp to California, such as access to local resources and business networks. Additionally, if your S corp is generating income in California, you may be subject to California state taxes. It may be helpful to consult with a tax professional and/or business attorney to determine the best course of action for your specific situation.

Julie King
Julie King
Answered
  • Monterey, CA
  • Licensed in California

A: The answer to your question will depend on what industry you are in, where your corporation does business, and other factual information that is not included in your question. But, in general (which may or may not apply to your business), if someone is only doing business in California, it doesn't make sense to stay incorporated in another state if you will have to continue paying fees or taxes to that state that would require another tax return. Also, if you are incorporated in two states, the corporation could be sued in both states. I suggest you speak with a business attorney in your area and provide more information to that lawyer. There will also be tax ramifications to this decision, so you may want to speak with a CPA as well. Best wishes!

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