LLC in home state or state of business?

[George Lods]

Hi everyone! We are finally starting our journey and have a question to those that may be knowledgable to this already. We live and work in California but plan on investing in Mississippi. Can we setup the business LLC in Ms (and not register anything w/ Ca) since Ms is where the properties will be? Or do we have to register LLC in Ca or both Ca and Ms? I searched the almighty google and see mostly the opposite of what we are doing (foreign LLC). And of course we will confirm with a professional in the end but wanted to ask those that may have already travelled down this road before us. Thanks for your replies.

[Aaron Byrne]

Hi There!

I am not an expert so--just as you mentioned--please be sure to seek legal advice before taking any concrete action, but I believe you will still need to register the LLC in CA even if you organize the LLC in MS. The State of CA considers any LLC whose members/managers that direct company business within its borders a California Foreign LLC and requires it to be registered. Here is an article that goes into more detail: https://www.upcounsel.com/cali...

If I was in your shoes, I would run the math. I assume (but am not certain) that Mississippi would want you to register the LLC in the state, so I would look to see how much a CA LLC costs to operate if it is also registered in MS, and vice-versa. One element of seeking legal advice would be beneficial if there are any practical reasons to organize the LLC in one state verses the other, like it being easier to handle disputes, obtain loans, etc.

Good luck!