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I have an LLC in Arizona (a technology company). The business is physically located in AZ. However, I have an investor from California who is willing to invest some money ~4K for 50% stake in the company. The LLC is manager managed by me in Arizona and currently not making any money.

Will I be subjected to the dreaded $800 California franchise tax? Can I have passive investors from other states without having to register my LLC in those states as foreign entities ?

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Here's the link to the FTB definition of "doing business in California". If your LLC fits the requirements - you'll have to chip in with the Golden State. Based on what you've described, it doesn't look like you'll have to pay the $800 merely because of the investor, but do get a consultation with a California licensed CPA to ensure that.

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