Not for Profit LLC

[One-Fine-User]

My question involves business law in the state of: California
Can I avoid incorporating in California if I start up a not for profit company in another state. I reside in California but I would be running just a website. I was hoping for some legal protection and no California taxes!

[adjusterjack]

If you want to be tax exempt may have to get approval from the IRS first.

There's a tax attorney who participates here that will be more helpful.

[flyingron]

You have two issues: the IRS and California. They are somewhat independent.

Just because you are a non-profit in California doesn't get you out of paying the franchise tax. You need to be Tax Exempt as well. Just claiming you're not making any money doesn't get you out of the minimum ~$800 franchise tax.

If you're a one-man operation, it's not clear if an LLC is giving you any "legal" protections anyhow. You can still be personally sued for anything you do.

[pg1067]

Can I avoid incorporating in California if I start up a not for profit company in another state.

Of course you can "avoid incorporating in California." You have, presumably, "advoid[ed] incorporating in California" every day of your life so far (as have I). It's within every human being's power to "avoid incorporating in California." Were you supposing that some irresistible force might compel you to incorporate in California (or any other state)?

Note that starting a non-profit company in another state has no relevance whatsoever to your ability to "avoid incorporating in California."

I reside in California but I would be running just a website. I was hoping for some legal protection and no California taxes!

Protection from what? Also, nearly 40 million people hope for "no California taxes," but that's about as realistic as flying unicorns.

If you're looking for assistance in setting up a business entity in a way that minimizes its and your tax obligations, you would be well advised to retain the services of an attorney.