Structuring an LLC

[Andrew Camberos]

I'm wondering if someone can help clarify things for me. I want to start a airbnb business as well as a wholesaling business. I'm from California and I really don't want to register my llc here because of its high tax of $800. I mainly want to do my airbnb and wholesaling out of state like the mid west / east coast. Can I start my LLC say in Wyoming or Delaware and wholesale a house in Michigan? Or run a airbnb in Florida? Since I'm not really doing business in California, is this possible? Thank you 🙏🏼

[Jason Marino]

Hi Andrew,

California is going to require that you pay the $800.00 minimum annual franchise tax on any LLC that you own as a California resident. While you might be able to establish an LLC in another State, if California is able to determine that you have an LLC and you have not been paying the franchise tax, the entity could have fines issued against it. Another issue is that if your LLC is doing business in a State, it should be from that State or registered to do business in that State as a foreign LLC. Based on this, a Wyoming LLC should not own a property in another State without registering to do business in that State. If you do not do this, you have a risk of fines, and, even worse, your LLC can be disregarded if it is involved in a law suit in a State that it is not registered to do business in.