CALIFORNIA SHELF CORPORATIONS

INSTANT CREDIBILITY WITH AN AGED SHELF CORPORATION FILED IN CALIFORNIA. COMPETE WITH ESTABLISHED COMPETITORS.

CALIFORNIA SHELF CORPORATIONS AND SHELF LLC'S

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.

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 company into California. Then file a Fictitious Name Registration in the county where you seek to do business.

Please consider the following reasons:

California companies have a horrible record of an insecure corporate veil.

The corporate veil is what protects you from the liabilities of the company. When the corporate veil is strong, you are not personally liable for the debts of the company. When the corporate veil is weak and its pierced, the creditor can make you personally liable and attach your personal assets. Anyone who lives in California knows of the over-population of lawyers, and the risks that they produce.

California companies are weak in corporate veil

California lawyers sell their clients on incorporating, and then they routinely attack the corporate veil of other corporations and LLC's. Attacking the corporate veil is routine in California.

California corporations and LLC's are equally weak

California companies simply cannot hold up to the challenges of attorneys in California.

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 annual $800 fee with the California Franchise Tax Board means that a California shelf corporation will cost much more

When you buy a shelf corporation or shelf llc, you're paying for the maintenance fees of the previous years and a premium for the age of the company. Since the California Franchise Tax Board charges an annual fee of at least $800, then you are also paying this fee for the previous years of the shelf company. If the seller of the shelf company hadn't paid the fee, then you must pay it in arrears, plus penalties and interest. In addition, the reports made the California Franchise Tax Board may not have been truthful.

The California Franchise Tax Board, and the local business license, also requests the identity of the owners of the corporation or LLC.

A change of ownership resets the age of the company to ZERO, from the standpoint of Dun & Bradstreet, and the banks. Since there was a filing of the initial owner of the company, and you recently bought it, this means you're the second owner. When a company is purchased, the existing credit and age is reset to ZERO. As a result, obtaining a shelf corporation or shelf LLC with established credit is futile, since the established credit is reset to ZERO within a couple of months.

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 the foreign shelf company to do business in California. This is important if you intend to build corporate 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 shelf corporation 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.

CALIFORNIA BASICS ON CORPORATIONS AND LLC'S

A domestic corporation formed in California is a company that was filed in California.

This also means that a corporation filed in any other state, such as in Oregon, is considered a foreign corporation in California. But, an Oregon, an Oregon company is domestic to Oregon. A California company filed in Oregon is a foreign company in Oregon. Got it?

A foreign corporation that seeks to do business in California must file one of these forms:

Since California requires disclosure of the owners at the business license level, this will reveal the owners for anyone who is looking. When you apply for corporate credit, a change of ownership is detected. As such, a change of ownership is considered a new company. The age of the company and its corporate credit is reset!

The solution is to obtain a foreign company and file it in California. An aged shelf corporation or an aged shelf LLC will provide the following advantages:

There are 49 other states! From which state should I buy a shelf corporation or shelf LLC?

The states to consider are:

These three states don’t ask for the owners of the companies.

How to Register a Foreign Corporation or LLC in California

Step 1: Is your entity name already in use?

Check to see if the name of the Corporation or LLC you are wanting to register is already in use. If your entity name is already taken, you may need to modify your entity name slightly to register in that state.

To check names in California:

Step 2: Complete Application Form

Obtain an application from the state's department of commerce. The application will be called something like, "Application for Authority to Conduct Affairs" or “Registering a Corporation or LLC”. Often, you can download this from your state's official Web site.

All California registration Forms are located here:

Some specific forms and filing fees are listed here for your convenience:

Step 3: Certificate of Good Standing for Foreign Entities

If your corporation or LLC is domestic (same state), you can skip this step.

If you are a foreign organization, go to the secretary of state in the state where you are incorporated, and get a Certificate of Good Standing. This must be attached to the application form.

For foreign entities wishing to register in California, the certificate must be dated within 6 months of the time of filing.

Step 4: File Application, Fee, and Return Envelope with Department of Commerce

File your application and fee with state's department of commerce. Know that nonprofit corporations may qualify for reduced filing fees.

For California, you may hand deliver for over the counter processing to one of the regional offices (Sacramento, LA, San Francisco, Fresno, San Diego) from 8 am - 4:30 pm. Call 916-657-5448 for complete current addresses. If a document is hand delivered there is an additional $15 counter fee and must be remitted separately. All offices accept checks or money orders made out to California Secretary of State.

The main office at the capitol is:

Business Entities Section (For hand deliveries)1500 11th St – 3rd Floor, Sacramento, CA 95814, 916-657-5448

Mailing Address:

Document Filling Support Unit, PO 944260, Sacramento, CA 94424-2600

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

Step 1:

Know that, since you are choosing to take advantage of all the rights and amenities of the state in which you are operating as a foreign corporation, you will be obligated to contribute to the health and wealth of that state. This may mean filing taxes and paying other fees within that state.

All California tax forms : http://www.ftb.ca.gov/forms/index.shtml

Corporations

Corporations that organize in California, register in California, conduct business in California, or receive California source income, must file California Form 100.
The California Estimated Tax Form 100 (ES100)
www.ftb.ca.gov/forms/2008/08_100es.pdf
The return due date is the 15th day of the third month after the close of the taxable year.

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.

LLCs

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 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 LLC. For any non-residents that do not sign an agreement, the LLC must pay tax on the nonresidents’ share of LLC income.

Tax General Information

Step 2:

Contact an attorney or firm who helps corporations register in foreign states to ensure that you are strictly adhering to the registration procedure.

Tips & Warnings 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.

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CALIFORNIA MAIN STATE WEBSITE Corporations & LLC’s

News & Notices, Customer Alerts and Processing Times

News & Notices:

Get the latest information about changes affecting business conducted with the Business Programs Division.

Customer Alerts:

Get the latest information about confirmed scams against Californians and businesses in the State of California, and what you can do if you have been a victim of a scam.

Business Entities

Get the current processing dates for Business Entities and determine which method of submission meets your needs.

LLC Statements

All LLC Statements of Information and the required Statement of Information for most corporations can be submitted electronically using a credit card. PDF copies of imaged business entity documents, including Statements of Information are available for free on the Secretary of State's Business Search.

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).

Service Options:

Options for online searches and filings, document processing and information requests (for certificates, copies and status reports)

Name Reservations:

Corporation, limited liability company and limited partnership name reservations

Forms, Samples & Fees:

Forms, document samples and associated fees

Statements of Information:

(annual/biennial reports): Corporation and limited liability company statements of information, common interest development association statements and publicly traded disclosure statements

Filing Tips:

Tips for filing most corporation, limited liability company and limited partnership documents

Information Requests:

Orders for certificates, copies and status reports

Service of Process:

Substituted service of process

FAQs:

Answers to the most frequently asked business entity questions

Victims of Corporate Fraud Compensation Fund:

Restitution to victims of corporate fraud

BUILDING CORPORATE CREDIT CORPORATE CREDIT

Preparation for the building of corporate credit:

ORDER PROCEDURE

FILING YOUR SHELF CORPORATION OR SHELF LLC IN ANOTHER STATE?

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