How to Start an LLC in California: Costs, Steps & Timeline

August 13, 2025
Neenneena92@gmail.com
Finance
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Thinking about forming a limited liability company in the Golden State? This guide walks you through how to start an LLC in California the right way—step by step, with current fees and deadlines, common pitfalls, and links to the exact government pages you’ll need. It’s written for founders, freelancers, real estate investors, and small-business owners who want clarity, compliance, and a clean paper trail from day one.

Fast overview of the process:

Name your LLC and clear it with the state.
Choose a California registered agent.
File Articles of Organization (Form LLC-1) with the California Secretary of State.
Create a written Operating Agreement.
Get an EIN from the IRS.
File your Statement of Information within 90 days.
Register for state and local taxes, licenses, and permits.
Calendar the $800 annual franchise tax and ongoing filings.

Throughout this guide, you’ll see embedded links to official pages (Secretary of State, Franchise Tax Board, IRS, FinCEN, CDTFA, EDD, CalGOLD, and DCA) so you can file and verify quickly.

What a California LLC is—and why it’s popular

A limited liability company (LLC) is a state-created business entity that separates your personal assets from business liabilities. In California, LLCs are flexible: you can have a single member (owner) or multiple members, choose member- or manager-management, and select your federal tax classification (default pass-through, elect corporate, potentially S corporation status via IRS election after corporate classification).

Key protections and trade-offs:

Liability shield: If formed and operated properly (separate bank account, proper contracts, compliance, no fraud), your personal assets are generally protected from business debts and lawsuits.
Tax flexibility: Default pass-through taxation, with options to elect corporate taxation depending on goals. California imposes an annual franchise tax and, if you’re taxed as an LLC, a separate gross receipts–based fee once income crosses thresholds.
Compliance: California requires a Statement of Information, an annual franchise tax, possible additional fee based on total income, and strict timelines.

For statutory authority, see the California Revised Uniform Limited Liability Company Act in the Corporations Code (starting at Section 17701.01) on the state’s official site: California Corporations Code, Title 2.6.

How to start an LLC in California: Step-by-step

This is the practical section—use it as your checklist.

1) Decide on your LLC’s structure and ownership

Single-member or multi-member?
Member-managed (owners run day-to-day) or manager-managed (you appoint managers)?
Each approach has governance and tax implications. Decide before you file so your Articles and Operating Agreement align.

Pro tip: If you expect outside investors or a more complex cap table, draft an Operating Agreement early with counsel to avoid re-papering later.

2) Choose and clear your California LLC name

California requires your name to be distinguishable on the Secretary of State’s records and to include “LLC,” “L.L.C.,” or “Limited Liability Company.”

Search the state’s database: Use the California Secretary of State Business Search to check availability and conflicts.
Naming rules: Avoid restricted words (e.g., “bank,” “trust,” “insurance”) unless you have approvals; don’t imply an unlawful purpose. Review the Secretary of State’s guidance on name availability and rules.
Optional: Reserve your name for 60 days (helpful if you’re not filing immediately). See the name reservation process.

Thinking long-term?

Check federal trademark conflicts to safeguard your brand nationwide via the USPTO trademark search.
If you’ll use a public-facing name that differs from your LLC’s legal name, file a Fictitious Business Name (DBA) at the county level after formation (examples: Los Angeles County FBN, San Francisco FBN).

3) Appoint a California registered agent (Agent for Service of Process)

Your registered agent receives legal and official state mail on your LLC’s behalf. Requirements:

Must have a California street address (no P.O. Boxes for the agent’s address).
Can be an individual California resident or a registered corporate agent.
If you want a professional option, consult the state’s list of Registered Corporate Agents.

Using a professional agent adds privacy and reliability, especially if you work from home or move frequently.

4) File Articles of Organization (Form LLC-1)

File with the California Secretary of State to legally create your LLC.

Where to file: Online via bizfile Online is typically fastest.

What you’ll need:

LLC name and address(es)
Registered agent name and street address
Management structure (member-managed or manager-managed)
Organizer information and signature
Filing fee: The standard Articles of Organization filing fee is typically $70. Check the current fee schedule for updates and any optional expedite or counter fees.
Forms and references: See the Secretary of State’s Forms, Samples and Fees page for LLC forms, including LLC-1.

Processing times vary, but online filings often process quickly. You’ll receive a stamped acknowledgment and an entity number; keep these in your permanent records.

5) Create a written California LLC Operating Agreement

California expects LLCs to have an Operating Agreement, though you don’t file it with the state. It clarifies:

Ownership percentages and capital contributions
How profits and losses are allocated
Voting rights and manager authority
Procedures for adding members, resolving disputes, or buying out interests
Recordkeeping rules and indemnification provisions

Even single-member LLCs should have one—it helps preserve the liability shield and strengthens your position with banks, partners, and auditors. Keep a signed copy with your company records.

6) Get an EIN (Employer Identification Number) from the IRS

Most LLCs need a federal EIN to open bank accounts, file taxes, hire employees, and issue 1099s.

Apply free online: IRS EIN application
Same-day issuance in most cases.
If your LLC will choose a tax election (e.g., corporate classification), you’ll typically use this EIN across filings.

7) File your Statement of Information (Form LLC-12) within 90 days

California requires every new LLC to file a Statement of Information within 90 days of formation and then biennially (every two years).

File online: Use bizfile Online.
Fee: Typically $20. Verify current details on the Statement of Information page or the forms page.

Information you’ll provide:

Business addresses
Managers or members in control
Registered agent
Business activity description
Late filings trigger a $250 penalty (assessed by the Franchise Tax Board). Calendar this deadline.

8) Register for State and Local Taxes, Licenses, and Permits

Depending on your activities and where you operate, you may need several registrations:

California Franchise Tax Board (FTB) for LLC taxes:

Learn your obligations on the FTB’s official LLC page.

Seller’s permit and sales/use tax (if you sell tangible goods or taxable services):

Payroll and employer taxes (if you hire employees):

Enroll via the Employment Development Department (EDD): Enroll in e-Services for Business.

Local business license/tax registration:

Use the state’s CalGOLD portal to find city/county-level business license, zoning, and permit requirements.

Professional licensing:

If your business provides professional services, verify license requirements with the California Department of Consumer Affairs: DCA license search.

Note: California generally does not allow licensed professionals (e.g., doctors, lawyers, accountants) to form professional LLCs; they typically form professional corporations instead. Confirm the rules for your profession with the relevant board via DCA.

9) Open a business bank account and set up accounting

Keep your business finances separate to preserve your liability shield.

Bring your Articles (or certified copy), EIN letter, Statement of Information (if available), and a banking resolution if required.
Choose accounting software that can track California taxes, payroll, and contractors.
Set reminders to make estimated payments and annual fees on time.

10) Understand and meet ongoing California LLC taxes and filings

California LLCs have unique state-level costs. Your timing and classification matter (more below), but at a minimum:

Annual franchise tax: Generally $800 each tax year for active LLCs. Pay the first-year tax as required by the FTB’s schedule; see payment options and due dates on the FTB LLC page.
LLC fee based on total income: If your LLC’s “total income from all sources derived from or attributable to California” exceeds statutory thresholds, you may owe an additional LLC fee. See thresholds and payment vouchers (Forms 3536 and 568) on the FTB site.
Franchise Tax Board filings: File Form 568 (and related vouchers/forms) as applicable. Calendar deadlines if you’re a calendar-year taxpayer (usually April due dates).
Biennial Statement of Information: File every two years to keep your entity in good standing.

11) File the federal Beneficial Ownership Information (BOI) report

Under the Corporate Transparency Act (CTA), most LLCs must report beneficial ownership to FinCEN.

What it is: A report listing individuals who own 25%+ or exercise substantial control.
Where to file: FinCEN BOI filing. Learn who must file and when at FinCEN’s BOI page.

Deadlines:

Companies created on or after January 1, 2025: File within 30 calendar days of formation.
Companies created in 2024: 90 days from formation (transitional rule).
Companies created before 2024: Initial filing deadline was January 1, 2025; if you missed it, file promptly.
Update BOI within 30 days of changes (e.g., ownership shifts, new managers, address changes).

This is a federal filing and separate from your state obligations.

How to start an LLC in California: Costs and Timelines

While costs can vary, here are the core state expenses most California LLCs encounter:

Articles of Organization (Form LLC-1): Typically $70 filing fee. See the current fee schedule.
Statement of Information (Form LLC-12): Typically $20, due within 90 days, then biennially.
Registered agent: $0 if you serve as your own; $50–$200/year for a professional agent (paid to the agent, not the state).
Annual franchise tax (FTB): Generally $800 per tax year for active LLCs. See the FTB LLC overview.
LLC fee (if applicable): Additional fee based on total income thresholds; see details and current brackets at the FTB link above.
Local business license: Varies by city/county (use CalGOLD).

Processing time:

Online filings through bizfile Online are typically the fastest.
Mailing or counter service takes longer; expedited options may exist for an additional fee (availability can change, so verify on the Secretary of State site or within your bizfile account).

Tax basics for a California LLC

Taxes are where California differs most from other states.

California Franchise Tax Board requirements (default LLC classification)

Most California LLCs taxed in the default pass-through manner have three recurring state touchpoints:

Annual franchise tax: Generally $800, paid to the FTB. The due date depends on your LLC’s taxable year. The FTB publishes specific due dates and vouchers on its LLC page (including Form 3522).
LLC fee (gross receipts–based): If your total California-derived income exceeds thresholds, you owe an additional fee. You typically estimate and pay this using Form 3536 and reconcile it on Form 568. Details and current brackets are on the FTB site.
Return filing: LLCs generally file Form 568 (LLC Return of Income) with the FTB, even if the LLC is treated as a disregarded entity for federal purposes. See the forms and due dates on the FTB page.

Other California tax considerations:

If you have employees: Register with the EDD for payroll taxes (EDD e-Services).
If you make taxable sales: Obtain a seller’s permit and collect/remit sales tax via the CDTFA (CDTFA online services).
Nonresident members: Withholding rules may apply when allocating income to nonresident members. Consult a CPA for Forms 592 and related obligations.

Federal Tax Classification Options for LLCs

By default:

Single-member LLCs are disregarded entities for federal income tax (income flows to Schedule C/E/F).
Multi-member LLCs are partnerships for federal purposes (file Form 1065 and issue Schedule K-1s to members).

Elections:

Corporate tax election: An LLC can elect to be taxed as a corporation using IRS Form 8832.
S corporation status: After electing corporate status, some LLCs also elect S corporation status (IRS Form 2553) if they meet eligibility rules. This can change how you pay self-employment taxes. California generally follows the federal classification for most purposes, but state-level taxes still apply. If you elect corporate or S corp taxation, your California obligations change—work with a tax professional to model the impact (e.g., corporate franchise tax vs. LLC fee).

No one-size-fits-all choice: Evaluate your expected profit, payroll plans, and exit goals with a CPA to determine the most tax-efficient path.

Compliance checklist and first-year calendar

Here’s a simple, practical schedule for a new California LLC (calendar-year taxpayer, example timeline).

Week 1–2:

Name clearance on the Business Search.
Appoint registered agent.
File Articles of Organization on bizfile Online.

Week 2–3:

Draft and sign Operating Agreement.
Apply for EIN at the IRS.
Open bank account.

Week 2–4:

File seller’s permit (if needed) with CDTFA.
Register for payroll (if hiring) with EDD e-Services.
Check local license/permit requirements via CalGOLD.
If applicable, file Fictitious Business Name with your county.

Within 30–90 days (depending on creation date and BOI rules):

File your federal Beneficial Ownership Information report with FinCEN.

Within 90 days of formation:

File your Statement of Information (bizfile Online).

Month 4 of your tax year:

Calendar the $800 franchise tax and any estimated LLC fee payments; see the FTB LLC page for vouchers and due dates.

End of year/early next year:

Prepare annual federal and California returns (federal Form 1065 + K-1s if multi-member; FTB Form 568 for California; other forms as applicable).

Ongoing:

Maintain a clean, separate bank account.
Keep records of member votes/consents (even if not required, it’s good governance).
Update BOI within 30 days of changes (owners, addresses, managers).
File your biennial Statement of Information.

Special situations when you start an LLC in California

Foreign LLCs registering to do business in California

If your LLC was formed in another state but is “doing business” in California (employees, offices, regular sales/operations here), you must register as a foreign LLC.
File an Application to Register (Form LLC-5) via bizfile Online.
Appoint a California registered agent.
File a Statement of Information within 90 days of registration.
Pay California franchise tax and any applicable LLC fee through the FTB.
If you have a series LLC formed in another state: California doesn’t form series LLCs domestically. If you operate series here, each series doing business in California may need to register and could have separate tax obligations. Consult the FTB guidance and a tax professional.

Professional services and California’s LLC limits

California generally prohibits licensed professionals (e.g., physicians, lawyers, CPAs, architects) from forming professional LLCs. Instead, the default vehicle is a professional corporation, often with specific naming and ownership rules set by the relevant licensing board. Check your board’s rules via the DCA license portal and the Secretary of State’s guidance.

Using DBAs and Operating Multiple Lines of Business

You can run multiple lines of business under one LLC. If you’ll brand some offerings differently, file a county-level DBA for each assumed name. Keep internal accounting clear so you can evaluate profitability by line of business and meet any tax reporting obligations.

Out-of-the-garage Today, Growing Tomorrow

If you’re planning to raise money, grant equity, or expand across states:

Build your Operating Agreement with future investors in mind.
Keep a proper cap table and obtain written approvals for new units.
If expanding to new states, register as a foreign LLC there and understand local taxes.

Practical tips to Make your California LLC more Resilient

Use the LLC’s full legal name on contracts and invoices (including the “LLC” suffix).
Adopt a written Operating Agreement, even if you’re solo.
Keep business and personal finances separate (dedicated bank account, card, and accounting).
Calendar recurring filings and taxes (Statement of Information, $800 franchise tax, LLC fee if applicable).
Maintain records at the principal office: member lists, contributions, tax returns for the past years, and key consents. These corporate formalities support the liability shield.
Obtain appropriate insurance (general liability; professional liability if applicable; workers’ compensation if you have employees—verify with the California Department of Industrial Relations and your insurer).
If you change your registered agent, managers, or addresses, promptly file an updated Statement of Information.
If your LLC is suspended by the FTB or SOS for noncompliance, stop doing business and work through revival procedures with the FTB before proceeding. Operating while suspended creates penalties and risks.

Frequently asked questions: How to start an LLC in California

Below are direct answers, with links to official resources when helpful.

Is publication required to start an LLC in California?

No. California does not have a newspaper publication requirement.

How long does it take to form a California LLC?

Online filings through bizfile Online are often processed quickly (sometimes same day), whereas mail or counter submissions take longer. Check current timelines inside your bizfile account.

How much does it cost to start and maintain a California LLC?

Expect the Articles filing fee (typically $70), the initial Statement of Information fee (approx. $20), and the annual $800 franchise tax (plus an LLC fee if your California-sourced income exceeds thresholds). See the SOS fee schedule and FTB LLC page.

When is the Statement of Information due?

Within 90 days of formation, and then every two years. File online via bizfile Online. Missing deadlines can result in a $250 penalty.

Can a California LLC have just one member?

Yes. Single-member LLCs are common. Despite being a disregarded entity for federal income tax, you still owe California obligations like the annual franchise tax.

Do I need an Operating Agreement?

California expects LLCs to have one. It isn’t filed with the state, but it’s crucial for governance, banking, and liability protection.

Do I need a business license?

Most cities and some counties require a business license or tax registration. Use CalGOLD to see what’s required for your industry and location.

What is a registered agent, and can I be my own?

The registered agent receives legal documents for your LLC. You can serve as your own if you have a California street address and are reliably available during business hours. Many owners prefer a professional agent for privacy and continuity; see the state’s Registered Corporate Agents.

What is the federal Beneficial Ownership Information (BOI) report?

It’s a federal filing to disclose your company’s beneficial owners to FinCEN under the Corporate Transparency Act. File at FinCEN BOI. Most newly formed companies in 2025 must file within 30 days of formation.

Can licensed professionals form an LLC in California?

Generally no. Many regulated professions must use a professional corporation. Verify with your licensing board via the DCA.

How do I register a foreign (out-of-state) LLC in California?

File the Application to Register (Form LLC-5) through bizfile Online, appoint a California registered agent, and file a Statement of Information within 90 days. You’ll also owe California taxes via the FTB.

What if I don’t plan to make money this year—do I still owe the $800?

The $800 annual franchise tax generally applies to active LLCs, regardless of profit. See the FTB LLC page for nuances and exceptions.

Does California allow Series LLCs?

California does not form domestic series LLCs. If your out-of-state series LLC does business in California, each series may need to register and could have separate tax obligations. Consult the FTB guidance and a tax professional.

How to start an LLC in California—and position it to grow

You came here to understand how to start an LLC in California; by now, you’ve seen that the steps are straightforward once you know where to file and what to calendar:

Name the LLC and clear it via the state search.
Appoint a qualified registered agent.
File Articles of Organization on bizfile Online.
Execute a robust Operating Agreement.
Obtain an EIN at the IRS.
File your Statement of Information within 90 days.
Register for California taxes (FTB, CDTFA, EDD as needed).
File your federal BOI report with FinCEN.
Calendar annual state taxes, biennial statements, and license renewals.

If you want to go the extra mile:

Document member decisions and keep clean corporate records.
Choose accounting software that can handle California tax nuances.
Consult a CPA about tax classification—especially if profits are meaningful or you plan to pay yourself W-2 wages.
Review insurance annually as your risk profile changes.

The end goal isn’t just to form an LLC—it’s to build one that’s bankable, tax-compliant, and ready for opportunities.

Official Resources and Quick Links

California Secretary of State (Business Entities):

File online: bizfile Online
Business Search (name clearance): Search database
Forms and fees: Forms, Samples and Fees
Fee schedule: Business Entities Fees
Registered Corporate Agents: SOS registered agents
Name availability: Name rules and info

California Franchise Tax Board (LLCs):

Overview, forms, due dates: FTB LLC page
Make payments: FTB Pay

Sales tax and seller’s permits:

CDTFA registration and accounts: CDTFA online services

Payroll and employer registration:

EDD e-Services for Business: Enroll here

Local licensing and permits:

CalGOLD (find city/county requirements): CalGOLD

Professional licensing:

California DCA license portal: Search/verify

Federal:

IRS EIN application: Apply online
FinCEN Beneficial Ownership Information: BOI home | File BOI
USPTO trademarks: Search and apply

Final Word: How to Start an LLC in California

If you follow the steps above, keep your records clean, and use the linked government portals, you’ll not only start a California LLC correctly—you’ll set a foundation that helps with banking, tax filings, and future growth. If you’d like, tell me your industry and city, and I can outline the specific licenses and tax registrations you’ll likely need.