"Do business in California" is nebulous. Many startups are at the stage of being a single-member LLC working out of their own garage. No property rental, no pay

"Do business in California" is nebulous. Many startups are at the stage of being a single-member LLC working out of their own garage. No property rental, no payroll, no customer transactions (yet). Legally speaking such an entity could be registered anywhere. Doing so in California for the first year or two is needlessly inefficient of your scarce resources at that stage.