California LLC Formation Guide
Complete step-by-step guide to forming your Limited Liability Company in California. Learn requirements, timelines, and expert tips for a successful formation.
7 Steps to Form Your California LLC
Choose Your LLC Name
Your California LLC name must be unique and follow state naming requirements.
- ✓ Must end with "Limited Liability Company," "LLC," or "L.L.C."
- ✓ Cannot be confusingly similar to existing business names
- ✓ Cannot contain restricted words without proper licensing
Pro Tip: Search the California Secretary of State database to check name availability before filing your Articles of Organization.
Appoint a Registered Agent
California requires every LLC to have a registered agent with a California address.
- ✓ Must be available during business hours (9 AM - 5 PM)
- ✓ Must have a California street address (no P.O. boxes)
- ✓ Can be yourself, an employee, or a professional service
Consider a Professional Service: Many business owners choose professional registered agent services for privacy and reliability. Services start around $49/year.
File Articles of Organization
File Form LLC-1 with the California Secretary of State along with the $75 filing fee.
- ✓ LLC name and purpose
- ✓ Registered agent name and address
- ✓ Management structure (member-managed or manager-managed)
Create an Operating Agreement
While not required by law, an Operating Agreement protects your business and clarifies ownership.
- ✓ Member roles and responsibilities
- ✓ Ownership percentages and profit distribution
- ✓ Decision-making procedures and voting rights
Obtain an EIN (Federal Tax ID)
Get an Employer Identification Number from the IRS for tax purposes and banking.
- ✓ Free to obtain directly from the IRS
- ✓ Required for business bank accounts
- ✓ Needed for tax filings and hiring employees
File Statement of Information
File Form LLC-12 within 90 days of formation and pay the $20 fee.
- ✓ Due within 90 days of LLC formation
- ✓ Must be renewed biennially (every 2 years)
- ✓ Provides current LLC information to the state
Pay Annual Franchise Tax
California LLCs must pay an annual franchise tax, with a minimum of $800.
- ✓ Minimum $800 annual franchise tax
- ✓ Due by 15th day of 4th month after formation
- ✓ Additional LLC fee based on gross receipts
Important: The $800 minimum franchise tax is due even if your LLC makes no income. New LLCs formed in their first tax year may be exempt from the first year's tax.
Additional Requirements & Considerations
Business Licenses
Depending on your business type and location, you may need additional licenses and permits.
- • City business license
- • Professional licenses
- • Industry-specific permits
Workers' Compensation
California requires most businesses with employees to carry workers' compensation insurance.
- • Required for most employees
- • Penalties for non-compliance
- • Obtain before hiring
Sales Tax Registration
Register with the California Department of Tax and Fee Administration if you sell taxable goods or services.
- • Free registration online
- • Resale permits available
- • Regular filing requirements
Ongoing Compliance
Maintain good standing by meeting all ongoing requirements and deadlines.
- • Annual franchise tax payment
- • Biennial Statement of Information
- • Registered agent maintenance
Need Help Forming Your California LLC?
Professional formation services can handle the entire process for you, ensuring accuracy and compliance. Compare top-rated services and find the best option for your business.