How to Form an LLC in California

Step-by-step guide to forming an LLC in California: filing fee $70, annual costs, registered agent, and state-specific requirements.

Why form an LLC in California

Learning how to form an LLC in California starts with understanding the costs. The state charges a $70 filing fee for the Articles of Organization, but every California LLC must also pay the $800 minimum franchise tax each year, regardless of revenue. Despite the higher ongoing cost, the LLC remains a popular choice because it offers personal liability protection and pass-through taxation. The formation process itself is quick, and most online filings are approved within a few business days. The process takes only a few days from start to finish, and you can complete every step without a lawyer.

Step 1: Choose a business name

Your California LLC name must be distinguishable from other registered names and must include "Limited Liability Company" or an approved abbreviation such as "LLC." You can search the Secretary of State database to check availability. Reserving a name costs $10 and holds it for 60 days. Avoid restricted words such as "bank" or "trust" unless you hold the appropriate license.

Step 2: Appoint a registered agent

Every California LLC must have a registered agent with a physical street address in the state. The agent accepts legal documents and official mail on behalf of the business. You can act as your own agent, but many owners choose a professional registered agent service to keep their home address private and ensure documents are handled reliably.

Step 3: File the Articles of Organization

The core filing is the Articles of Organization, submitted online or by mail to the California Secretary of State. The filing fee is $70. You will provide the LLC name, registered agent details, and the business address. Online filings are typically approved within a few business days. The online system is fast, and most owners complete the filing in under an hour. Once approved, your LLC legally exists and can begin operating.

Step 4: Draft an operating agreement and get an EIN

California does not require an operating agreement, but it is strongly recommended. This document defines ownership percentages, voting rights, profit distribution, and management duties. A well-drafted operating agreement prevents disputes between members and strengthens liability protection. It is also useful when opening a business bank account or applying for financing.

Most California LLCs also need an Employer Identification Number from the IRS, even if there are no employees. The EIN is used to open a business bank account, file taxes, and hire staff. You can apply for an EIN online at no cost through the IRS website. A business bank account keeps personal and business money separate, which is essential for preserving your liability protection.

California LLC costs and ongoing requirements

The total cost to start an LLC in California is $70 for the state filing, plus the $800 minimum franchise tax for the first year and a $20 Statement of Information fee. The franchise tax is due every year, and the Statement of Information is due within 90 days of formation and then every two years. Keep a calendar reminder for both deadlines so your LLC stays in good standing with the state. Compare these figures with other states in our LLC cost by state guide, and see the full California LLC page for more detail.

Frequently Asked Questions

How much does it cost to form an LLC in California?

The filing fee to form an LLC in California is $70 for the Articles of Organization. However, every California LLC must also pay the $800 minimum franchise tax each year, regardless of revenue. The first year franchise tax is typically due within the first few months of formation. Additional costs include the $20 Statement of Information filing fee and any registered agent fees. In total, expect to budget at least $900 in the first year.

What is the California franchise tax?

The California franchise tax is an $800 annual tax that every LLC doing business in California must pay, even if it earns no revenue. It is due by the 15th day of the fourth month after your LLC tax year ends, which is April 15 for calendar-year LLCs. The tax is separate from the $70 formation fee and the $20 Statement of Information fee. LLCs with gross receipts above $250,000 may owe an additional fee based on revenue.

What is the Statement of Information in California?

The Statement of Information is a biennial filing that California LLCs must submit every two years. It updates the state on your LLC registered agent, principal address, and managers or members. The filing fee is $20, and it is due within 90 days of formation and then every two years in the month of your LLC initial filing anniversary. Failing to file on time triggers a late penalty, so it is important to track the deadline.

Do I need a registered agent in California?

Yes, every California LLC must maintain a registered agent with a physical street address in the state. The agent accepts service of process and official correspondence on behalf of the LLC. You can act as your own agent, but a professional registered agent service is a common choice because it keeps your personal address private and ensures documents are handled reliably. The agent information is listed on the Statement of Information.