I run a small design studio as an LLC in San Francisco. I'm thinking about starting a second company (maybe an e-commerce brand) in Oregon. Can my SF LLC own that new company? Like, have the LLC be the member of the new LLC? Or do I need to do something else? I don't want to mess up my California paperwork.
LLC formation
Can a San Francisco LLC own a second company in another state?
Yes, an LLC can own another LLC. It's called a parent-subsidiary structure. Your SF LLC would be the member of the Oregon LLC. Just make sure you file the right forms in Oregon and maybe check with a lawyer.
Short answer: yes. Long answer: yes, but you'll need to register your SF LLC as a foreign LLC in Oregon if it's doing business there. And the Oregon LLC will have itts own fees.
Why Oregon? Sales tax? I'm genuinely curious because I've been thinking about something similar.
Oregon has no sales tax, and I have a supplier there. But mostly it's just a test market.
Prepare for a ton of paperwork. California will still want their $800 franchise tax, and Oregon has its own minimum tax. Also, you might need a registered agent in Oregon.
Actually, if the SF LLC is the sole member, the Oregon LLC is disregarded for federal taxes, but California might treat it differently. You should talk to a CPA.
Im not a lawyer, but I've done this. You'll need to file Articles of Organization in Oregon and then a Statement of Information in CA for the foreign LLC if you're registered there. It's not rocket science but it's not free either.
Thanks, LegalBeagle. So the SF LLC would need to register in Oregon as a foreign LLC? That seems like extra zteps.
Only if the SF LLC is "doing business" in Oregon. If it's just holding membership interest in the Oregon LLC, maybe not. But the Oregon LLC itself will neeed a registered agent.
This is why I love forums. I learned more here than on the state websites.
State websites are designed to confuse you into hiring help. Anyway, good luck with the e-commerce thing. What are you selling?
I'd also check the Oregon Secretary of State's website. They have pretty clear instructions. And don't forget about an EIN for the new LLC.