California Shelf Corporations
Instant Credibility With An Aged California shelf corporation. Compete With Established Competitors.
California Shelf Corporations And Shelf LLC’s
The best way to use an aged out-of-state company in California is to acquire it from a state where the ownership isn’t disclosed, such as New Mexico. This way, you’ll be viewed as the first and original owner, giving you a competitive advantage over established competitors. It’s also important to update the public record with your name and the new business address when transferring the company. Filing the company in California as a foreign entity and obtaining necessary business licenses is also crucial.
If you use an aged California shelf corporation, the shift in ownership may be detected, which could work against you. Start with a shelf company outside the state of California and then file it into California.
When to avoid acquiring a California Shelf Corporation. This is critical information if you need a shelf corporation or shelf LLC, and you must do business in California.
Attention
DO NOT acquire an aged California shelf corporation to build corporate credit or to start a business. California-aged companies are poisonous! Why? Sellers of aged California shelf companies don’t pay the California Franchise Tax Board fees. That leaves you holding the bag with back fees, penalties, and interest.
Obtain better results with an out-of-state aged shelf company and then foreign file the company into your State. We age our companies in Montana and New Mexico. Then simply file that California shelf corporation into California. Then file a Fictitious Name Registration in the county where you seek to do business.
Please consider the following reasons:
Please consider the following reasons:
The Solution: Obtain an out-of-state shelf corporation or shelf LLC, and file the company in California.
The corporate veil of out-of-state companies are much stronger than those of California. Further, our shelf companies filed in Montana, Wyoming and New Mexico are extremely strong. We challenge any attorney in California to attempt to pierce the corporate veil of any of our companies.
The California Franchise Tax Board poses certain challenges when buying a California shelf corporation
The Solution :
Obtain an out-of-state shelf corporation or shelf LLC, and file the company in California as a foreign corporation.
Out-of-state shelf corporations and shelf LLC’s don’t need to pay the California Franchise Tax Board until the company is filed in California. And even then, the fee isn’t paid until the first anniversary from when the out-of-state (foreign) company is filed in California.
You and your business are safer when certain that the California Franchise Tax Board fees are paid when owed, and back taxes are not owed.
The states of Montana, Wyoming and New Mexico don’t request the information on the owners of the company. The owners’ identities aren’t disclosed. This means that you are considered the FIRST owner of the company once you register foreign California Shelf Companies to do business there. This is important if you intend to build business credit or obtain private financing.
You will pay less, in terms of the sales price of the company, by acquiring an out-of-state shelf company and then filing it in California. This is because the annual maintenance fees are lower by obtaining a out of Wyoming, Montana or New Mexico, than a California company.
California shelf corporations and shelf LLC’s always costs more than what they are worth. You’re better off with an out-of-state shelf company that’s filed in California as a foreign entity.
Should I Obtain A Shelf Corporation Or Shelf LLC?
LLC’s (taxed as a partnership) and Subchapter S Corporations are very much taxed the same. They are pass through entities and the members/owners receive a K1 at the end of the tax year. In terms of lending, doing business with governments and power plants, and construction companies, it’s an advantage to do business as a corporation than an LLC. For reasons we boil down to bias, banks prefer to lend to a corporation rather than an LLC. This also applies to energy production and putting bids on municipal and government projects.
How to Register a Foreign Corporation or LLC in California
To facilitate the processing of documents sent to Sacramento, please attached a self addressed envelope and a letter referencing the corporate name as well as your name, return address, and phone should also be submitted.
California Taxes
A Corporation is taxed on its net income at a rate of 8.84 percent, with a minimum tax of $800. The minimum franchise tax ($800) is due the first quarter of each accounting period and must be paid whether the corporation is active, inactive, operates at a loss, or files a return for a short period of less than 12 months. The minimum tax is waived on newly formed or qualified corporations filing an initial return for their first taxable year.
All LLCs classified as corporations that organize in California, register in California, conduct business in California, or receive California source income, must file California Form 100. The California Form 100 must be filed by the 15th day of the third month after the close of the LLC’s taxable year.
The shelf LLC will be taxed at the corporate tax rate of 8.84 percent and will be subject to a minimum tax of $800.
All LLCs classified as partnerships or disregarded entities that organize in California, register in California, or conduct business in California, must file California Form 568 Limited Liability Company Return of Income. California Form 568 must be filed by the 15th day of the fourth month after the close of the LLC’s taxable year.
An LLC required to file Form 568 pays an annual tax of $800, and may be subject to a fee based on total annual gross worldwide income. The annual tax is due by the 15th day of the fourth month of the taxable year, and is paid using CA Form 3522.
http://www.ftb.ca.gov/forms/2008/08_3522.pdf CA Form 3522
In addition, an LLC filing Form 568 that has members that are not residents of California must file the agreements of those non-resident members acknowledging that California may tax them and may collect tax from them, agreeing to file a California return and pay tax on the members’ share of California source income of the California Shelf LLC. For any non-residents that do not sign an agreement, the LLC must pay tax on the nonresidents’ share of LLC income.
Tips & Warnings
Private firms that will assist you in registering your entities in California sos.ca.gov/business/bpd_service_companies.htm
Information On The California Secretary Of State
Aged shelf corporations and LLC’s offer no tax advantages. We’re not attorneys. We’re not tax advisors.
California Quick Reference
California Main State Website Corporations & LLC’s
News & Notices, Customer Alerts and Processing Times
Note: Statements of Information for common interest developments must be submitted on paper, by mail or in person (drop off), at this time.
The Business Entities Section of the Secretary of State’s office processes filings, maintains records and provides information to the public relating to business entities (corporations, limited liability companies, limited partnerships, general partnerships, limited liability partnerships and other business filings).
Building Corporate Credit
Preparation for the building of corporate credit:
