Many people who form Delaware companies are from California, with businesses that are physically located and operated in California. The reason they form a Delaware company may be because California’s corporate law structure is notorious for being one of the worst in the 50 states.
Rather than form a California company, people form a Delaware company and register it to do business in California. You can get more information on this and assistance registering as a foreign entity in California on this website or by contacting us.
While operating in California, many businesses choose to operate under a different name than the company name filed with the Delaware Secretary of State. The state of California mandates that individuals or entities doing business for profit under a name different from the owner’s full legal name must file a Fictitious Name Statement with the county clerk’s office in the county where the business resides. This is called a “Doing Business As” name or “DBA”.
Before you can register a DBA in California, the state requires you to register your Delaware company as a foreign entity in the state of California. This is called Foreign Qualification, and it is the first step in how to register a DBA in California.
When you file for Foreign Qualificaton in California, you will receive a Certificate of Authority for you Delaware company. You will need this Certificate when you register a DBA in California.
Here is an example of a DBA: let’s say John Slice forms a Delaware company called “John Slice LLC,” but he wants to operate in California under the name “Good Guy Delivery Service” rather than use his business’ legal name. In order to use Good Guy Delivery Service, John needs to register that name as a DBA in California with the county clerk’s office in the county in which his business resides.
However, be aware that when you register a DBA in California, you will not be protected from personal liability in the same way incorporating your company protects you. When Harvard Business Services, Inc. files your LLC or corporation with the Delaware Division of Corporations, it creates a whole new entity, which is separate, in most legal respects, from its owners, and offers asset protection for you and any other members or owners.
If you would like Harvard Business Services, Inc. to help you Foreign Qualify your entity in California, you can call us at 1-800-345-2677 and a helpful specialist will walk you through the process.
*Disclaimer*: Harvard Business Services, Inc. is neither a law firm nor an accounting firm and, even in cases where the author is an attorney, or a tax professional, nothing in this article constitutes legal or tax advice. This article provides general commentary on, and analysis of, the subject addressed. We strongly advise that you consult an attorney or tax professional to receive legal or tax guidance tailored to your specific circumstances. Any action taken or not taken based on this article is at your own risk. If an article cites or provides a link to third-party sources or websites, Harvard Business Services, Inc. is not responsible for and makes no representations regarding such source’s content or accuracy. Opinions expressed in this article do not necessarily reflect those of Harvard Business Services, Inc.