California law is convoluted and Californian courts slow. That makes doing almost everything with a California LLC more expensive than with a Delaware LLC.
The only reason to form a California entity is if you’re doing business with the state.
In a revenue sense, e.g. if you are contracting with the state. Paying California taxes is about equally easy for a California resident, New York resident or Delaware entity.
Or if you’re operating a small business unlikely to ever need to use the courts or raise outside capital, and the extra ~$300 for a Delaware entity isn’t worth the benefits.
https://www.ftb.ca.gov/forms/misc/3556.html#Doing-Business-i...
Paul is a California resident and a member of a Nevada LLC. The Nevada LLC owns property in Nevada. The LLC hires a Nevada management company to collect rents and provide maintenance. Paul has the right to hire and fire the management company. He occasionally has telephone discussions from California with the management company in Nevada regarding the property. He is ultimately responsible for the property and oversees the management company. Paul conducts business in California on behalf of the LLC. The LLC must file Form 568.