That's correct. California requires "foreign" corporations (any business entity incorporated in another jurisdiction) "doing business" in Califoria to register

That's correct. California requires "foreign" corporations (any business entity incorporated in another jurisdiction) "doing business" in Califoria to register as a foreign corporation (or LLC) in California. This "franchise tax" is similar to the "franchise tax" paid by domestic corporations (incorporated in California), and is the greater of net income from California activities (all activities, for California-based companies) or $800. The franchise tax for foreign corporations is heavily dependent on having a physical nexus to California, such as offices, employees, or equipment located within California borders. For example, registering as a Nevada company but headquartering in Santa Monica would result in the imposition of a franchise tax. While this situation is quite common, it usually has the nasty side effect of subjecting the business to nasty tax penalties for not paying franchise taxes they thought did not apply. The franchise tax is waived for domestic S-Corporations in their first year of existence, unless they are profitable. LLCs are required to pay the franchise tax whether or not they dissolve in the first year unless they were never a going concern (i.o.w., they never actually did any business).