Clarification of Answer by
24 Jun 2004 05:18 PDT
Sorry to take so long to respond. I just set up my Google Mail account
this week and forgot the clarification requests would be going there.
Do you have a specific reason for having a Los Angeles address?
I mean, do you have someone, a contact or friend, in the Los Angeles area
working with your company?
If not, move that address out of Los Angeles AND out of California.
Trust me, I am IN California. Your life will be less complicated if you
can move your mailing address to Nevada, Delaware, even Florida or
Washington state. (All tax-free states.)
I must tell you, I got chills when reading 'Los Angeles' in your notes.
For not being present, you couldn't have selected a worse city/state
combination, when it comes to taxes and licensing. Both the City of
Los Angeles and the State of California are very aggressive when it
comes to enforcing and collecing taxes.
I stumbled across these public library informational pages that provide
information about L.A. and California.
Business Licenses - http://www.lapl.org/guides/startbus/4license.html
Business Taxes - http://www.lapl.org/guides/startbus/3tax.html
Most likely, by having that address within the city limits of L.A. (very
broadly defined by the City Council as being most of Southern California),
you have subjected yourself to CITY TAXES. The City of LA business license
requires you to pay a percentage of your GROSS SALES each year.
So, if you must stay in California - at least get it out of Los Angeles.
Move your mail box to Beverly Hills, Pasadenda, Glendale, Malibu,
even West Hollywood - those are all separately incorporated cities adjacent
to, or within the L.A. boundaries. They have fixed rate licenses.
If you stay in Los Angeles, you are conducting a mail order business within
City limits. Here is the application to file to get your business license.
You may fill in the form online, then print it out and mail it to the address
shown on the top right hand corner of page 1. Be sure to fill in page two to
show your prior year activity.
If your business started before 2004, expect to pay taxes, penalty and interest
for the previous years. (Even as charming as I am, I have not been able to get
that waived for my clients.)
For the state of California, you're right, you don't qualify as a foreign
partnership. The form says not to use it if you're a limited partnership.
While I do not know what an I.B.C. or B.C.I. is, you did mention that your
business name includes LTD. That would make you a 'limited' entity.
That probably makes you a limited partnership in the eyes of the state.
You will pay an annual minimum $800 limited partnership fee
and a Secretary of State (SOS) annual filing fee (about $20).
For the SOS, you will need to register, using form LP-5, scroll down this page
to FOREIGN (out of state or country) LIMITED PARTNERSHIPS:
And send in the $70 application fee. They will send you the annual report
of partners each year. That $20 (or so) annual fee and form must be filed on
time each year or they add a $250 penalty. So, be sure your mailing service
gets your mail to you on time. (The SOS does mail those forms out with
plenty of time to respond. They ARE good about it. And they have been known
to waive the penalty if you have a good excuse for being late.)
In addition to the SOS's office, you will have to file annual partnership
returns, using Form 565, along with your $800 fee. Here is the booklet:
If you're going to stay in L.A. I do suggest you get someone local to help
you with all the filing requirements. You will want someone who can help you
research ways to keep your taxes and filing requirements to a minimum, as
a foreign entity. If you need recommendations, I can provide them.
(no, not me, sorry)
Please, consider moving out of California.