An LLC may be classified for tax purposes as a partnership, a corporation, or a disregarded entity.The LLC should file the appropriate California return.

There is a common misconception by many that they can form the LLC in other states, specifically those states that do not have income tax such as Nevada or Texas, in order to avoid state taxes. This turned out to be false.

Form 568 must be filed by every LLC that is not taxable as a corporation if any of the following apply:

The LLC is doing business in California.

The LLC is organized in California.

The LLC is organized in another state or foreign country, but registered with the California SOS.

The LLC has income from California sources.

LLCs that are formed in California, are required to file articles of incorporation with the California SOS before doing business in this state. LLCs organized under the laws of another state or foreign country are required to register with the California SOS before entering into intrastate business in California.

Nonregistered foreign LLCs that are members of an LLC doing business in California or general partners in a limited partnership doing business in California are considered doing business in California. Regardless of where the trade or business of the LLC is primarily conducted, an LLC is considered to be doing business in California if any of its members, managers, or other agents are conducting business in California on behalf of the LLC.

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