We supply services to an Australian company that is expanding in the USA, California. We are simply going to be drop shipping product from a Californian based supplier, we will have no other physical presence in California other than this trade, the purchaser will pay us by check, and will will forward payment to a wholesale distributor who will ship the product the end user. if we incorporate in Delaware (LLC), will we need a business license and a resellers license in California, the distributor we will be paying to ship the goods is based in California. If so, is it then less problematic to set up our LLC in California if our customer and distributor is both based at that location
Ian,
Generally speaking, if you are only receiving and forwarding the payment to the distributor, you may indeed be able to open your company in Delaware. You will need to have a California sales tax id to be able to remit the payments the distributor. In this case, California offers a specific reseller’s permit for companies located outside of the state.
From our knowledge and experience, if you have any physical presence (such as an office, warehouse or employees) in California state, that is where you should register your company. If you would like, contact us to explain how exactly your business would be conducted. That way we can have a better understanding of the business concept and your company’s specific actions, and offer a more detailed response.
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