[yieldcrv]

It works because you ignore that law

LLC franchise fees are at the same level of priority as unreturned library books, and the legal consequences are even lower than that

There is no reason to form an LLC in the state you’re physically in just because the state said so (unless the consequences really are so meaningful)

If they notify you of a fine, go ahead and pay it and reincorporate in-state then

but I know people that even paid payroll taxes with an out of state LLC and the franchise tax board never said anything

even the courts might have a provision for you to retroactively gain limited liability by reincorporating in the state just to represent in court after being sued

always remember that states are in competition with each other for business, and this transcends their due process and opinions. they do things to attract business. california already attracts business and keeping that is more important than worrying about a Wyoming or Delaware entity operating in their borders