Start Your California LLC​

Quick facts about forming a California LLC

Filing Fee	$70 + $5 for a certified copy
Processing Time	3–5 business days online, longer by mail
Annual/Biennial Report Fee	$20 Statement of Information (filed within 90 days and every 2 years)
Registered Agent Required	Yes, must have a physical address in California
Operating Agreement	Mandatory, not filed with the state
State Franchise Tax	$800 annual minimum tax
Business License	Not required statewide, but local permits may apply
Managing Authority	California Secretary of State

How to start an LLC in California in 5 steps

Starting an LLC in California or any other state can be a stressful process, especially if you’re doing it for the first time and not sure what to expect. To help guide you through this process, we created this simple step by step guide, breaking down each step so that you can clearly understand what you need to do in each stage of the process.

1. Name your California LLC
2. Choose a registered agent
3. File articles of organization
4. File your initial statement of information
5. Create an operating agreement
6. Apply for an EIN

Step 1: Name your California LLC

California requires you to register the name of your business in order to form an LLC. The first thing you need to do is to run a California Secretary of State business search to check in the Secretary of State business name database. 

This step is done to make sure the name you chose is unique. Your business name must be unique in order for you to be able to form an LLC in California.

Other requirements include:

• Must be readily distinguishable: The name must be readily distinguishable from any other business name on file.
• Must Include an LLC suffix: Your LLC name must include one of the following phrases or abbreviations: Limited Liability Co, Limited Liability Co, Ltd. Liability Company, Ltd. Liability Co., L.L.C., LLC.
• Not confusing or similar to other names: The name cannot be confusing or similar to an existing name. For example, ‘Good Time Rest Home LLC’ and ‘Goodtime Rest Home LLC’ are too similar.
• Can’t include restricted words: The name cannot include restricted words like: bank, trust, trustee, incorporated, corporation, inc., corp., insurer, insurance company, county, municipality, or department.

Step 2: Choose a registered agent​

The California registered agent must be identified in the Articles of Organization. In California, the registered agent is officially termed the agent for service of process. The agent must:

• Have a street address in the state. Your LLC can have a P.O. address, but you must have a registered agent with a physical street address in the state
• Be available during regular business hours at the address provided
• Accept all legal papers for the business, including the service of process for a subpoena and tax notices
• A corporation or registered agent service can be used but must be a registered 1505 corporate agent.
• You business entity cannot be it’s own registered agent.

The LLC can choose the services of any approved California registered agents or can use a registered corporate agent who is qualified with the California Secretary of State.

You can choose to designate yourself as the registered agent. But, keep in mind that if you do that, your information will be public. 

Step 3: File articles of organization

An article of organization is a key legal document containing basic information about your business, and filling it is one of the very first steps for forming an LLC.

California requires you to file Articles of Organization with the Secretary of State. You can only do this online through the bizfile website. For domestic LLC’s you complete the information for “Articles of Organization – CA LLC”. There are also options for conversions and foreign (out-of-state) LLCs.

Note: the previously used Form LLC-1 is no longer available for download.

State filing fees

The filing fees for California LLC formation is $75 in total, which includes $70 state filing fee for your Articles of Organization, and $5 fee for certified copy.

Requirements

You need to be sure you fill in form LLC-1 correctly or it will be sent back to you for correction and delay the process of operating your business as an LLC.

Include the following on the form:

• The name of you LLC exactly as it appears on the California Secretary of State Records.
• A complete street address, city, and ZIP code of the LLC’s designated California office. This is where all documents relevant to the LLC along with other business records must be kept.
• The name of your registered agent. This can be either an individual who resides in California or who has a physical street address in California, or a registered corporate agent who is qualified by the California Secretary of State. 
• How you will manage your LLC, either have a member managed or a manager managed LLC. If you are the sole member of your LLC, the default would be a member managed LLC.
• The form must be signed by each person responsible for forming the LLC
• A Cover Sheet that is included in the first page of the form.

How to file

California allows filing the Submission of the Cover Sheet and the Articles of Organization online only. Submission online: Go to bizfile California. You must pay the fee with Mastercard or Visa

Other forms are available for download for Conversions, Restated Articles, and Amendments and can be submitted by mail or in person as follows:

By mail to Secretary of State, Business Entities Filings, P.O. Box 944260, Sacramento, CA 94244-2600. You may pay by check or money order. Do not send cash. There is no extra handling fee

In person at the Sacramento office, 1500 11th Street, Sacramento, CA 95814. You may pay by check, money order, Visa, or Mastercard. In addition to the $70.00 filing fee, there will be an extra handling fee of $15.00. No matter how you file, if you want a certified copy, you need to submit your own copy and pay a $5.00 certification fee

Step 4: File your initial statement of information

After forming your LLC in California, you are required to file an Initial Statement of Information (Form LLC-12) with the California Secretary of State. This must be completed within 90 days of your LLC’s registration date.

The Statement of Information includes important details, such as:

• Your LLC’s principal business address
• The names and addresses of your LLC’s members or managers
• Your registered agent’s information
• A brief description of your business activity

The filing fee is $20, and it must be submitted directly to the Secretary of State, either online or by mail.

Missing this step can result in penalties or your LLC falling out of good standing, so be sure to mark your calendar. We can help you take care of it as part of our compliance service, and make sure you don’t miss the deadline.

Step 5: Create an operating agreement

In California, forming an LLC requires you to create and maintain an operating agreement. An operating agreement defines the roles and responsibilities of all members and goes a long way toward preventing future misunderstandings.

You don’t need to file the agreement with the Secretary of State, but the state does require the LLC to prepare one and maintain it at the office where the rest of the LLC papers are kept.

Your California operating agreement should include:

• Percentage of ownership that is allocated to each member and how profits will be distributed.
• How the LLC is structured and the responsibilities, rights, and roles of each member
• How decisions will be made. Will your proposals need to be passed by unanimous or majority vote? Will voting power be provisional to ownership interest? Will all decision-making authority be given to just one person?
• What will happen to the ownership interest of a member who wants to leave, files for bankruptcy, or gets a divorce?
• How will it be handled if the owner wants to dissolve the LLC? How will the assets be divided?

The operating agreement should be updated whenever there is a new member or there are any other changes that need to be made so that the agreement will accurately reflect your current situation.

Important note: California requires you to create an operating agreement, even if you have a single member LLC that includes only yourself.

Step 6: Apply for an EIN

In California, like in other states, you would need to create an EIN (IRS Employer Identification Number). This is very beneficial from several reasons that will be explained below, so we consider it a must for every business owner.

An EIN is your Employer Identification Number required and issued by the IRS for all LLCs. It is a 9-digit number similar to your Social Security Number (SSN) but is used for business-related purposes only. As a business owner, you will need an EIN to open a business bank account, apply for a business loan, and to pay your business income taxes.

Note the EIN is filed with the IRS, and is not the same as your California Tax ID Number.

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