We have an S-Corporation in Hawaii for the purposes of managing rental property. We recently purchased a house in California to rent it out. Do we need to register our Hawaii corporation in California so the corporation can act as “landlord”?
Whenever a company is going to be listed as the owner of a real estate property, the company must be registered in that state where the property is physically located.
With that in mind, you have two possible options:
1) One option is to file your Hawaii-registered S-Corp as a foreign entity in California. This will have your business registered in both states, using the same EIN, bank account, etc. Keep in mind, in California, S-Corps are taxed in a certain way, which you can read about on our research page for S-Corporations.
2) Alternatively, since it’s very common to put a real estate property in its own LLC for asset protection reasons, you could use your corporation to register and own a domestic LLC in California.
And, of course, you might want to consult your accountant to see which of the options would work best with your particular situation.
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