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How to Start an LLC in California

Complete 2026 guide with step-by-step instructions, costs, and required forms

Filing Cost
$70
Processing Time
5-10 Days
Annual Tax
$800
Difficulty
Easy

Starting a California LLC is straightforward. You file paperwork with the California Secretary of State, pay the filing fee, and wait for approval. No lawyer required.

This guide walks you through the entire process step-by-step, including costs, timelines, required forms, and common mistakes to avoid.

⏱️ Time Investment: 1-2 hours to complete paperwork. 5-10 business days for state approval.
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Step-by-Step Guide to Forming a California LLC

  1. Choose Your LLC Name

    Your California LLC name must:

    • Include "Limited Liability Company," "LLC," or "L.L.C."
    • Be distinguishable from existing California businesses
    • Not contain restricted words (bank, insurance, corporation) without approval

    Check name availability: California Business Search

    ⚠️ Common Mistake: Don't skip the name search. If your name is too similar to an existing business, your filing will be rejected and you'll lose the $70 fee.
  2. Appoint a Registered Agent

    California requires every LLC to have a registered agent—a person or company authorized to receive legal documents on behalf of your business.

    Requirements:

    • Must have a physical California address (no P.O. boxes)
    • Must be available during normal business hours
    • Can be yourself, a partner, or a professional service

    Cost: $0 if you act as your own agent. Professional services cost $100-300/year.

  3. File Articles of Organization (Form LLC-1)

    This is the official document that creates your LLC. You'll submit it to the California Secretary of State.

    Required information:

    • LLC name
    • Purpose of business (can be general)
    • Registered agent name and address
    • Management structure (member-managed or manager-managed)

    How to file:

    • Online: BizFile Online (fastest, 3-5 business days)
    • Mail: Send completed form to Secretary of State (7-10 business days)

    Filing Fee: $70 (non-refundable)

    Download Form LLC-1
  4. Create an Operating Agreement

    While not legally required in California, an Operating Agreement is highly recommended. It defines ownership percentages, profit distribution, management structure, and procedures for adding/removing members.

    Why you need it:

    • Protects your limited liability status
    • Prevents disputes between members
    • Required by most banks to open a business account
    💡 Pro Tip: Even if you're a single-member LLC, create an Operating Agreement. It strengthens the legal separation between you and your business.
  5. Get an EIN (Employer Identification Number)

    An EIN is like a Social Security number for your business. You need it to open a bank account, hire employees, and file taxes.

    How to get it: Apply free online at the IRS website. Takes 10 minutes, receive immediately.

    Cost: $0 (free from the IRS)

    ⚠️ Scam Alert: Third-party services charge $50-200 for EIN applications. Don't pay. The IRS does this for free.
  6. File Statement of Information (Form LLC-12)

    Within 90 days of forming your LLC, you must file Form LLC-12 with the California Secretary of State.

    Required information:

    • LLC name and entity number
    • Principal office address
    • Mailing address
    • Names and addresses of all members/managers
    • Registered agent information

    Filing Fee: $20

    Renewal: Must be filed every 2 years ($20 each time)

    Download Form LLC-12
  7. Pay California Franchise Tax

    California charges an annual $800 minimum franchise tax to all LLCs, regardless of income.

    When to pay:

    • First year: Exempt (no payment required)
    • Second year onward: $800 due by April 15
    ✓ Good News: If you form your LLC in December, you get 15 months before your first $800 payment is due.

    Additional fee for high earners: If your LLC earns over $250,000/year, you'll pay an additional fee ranging from $900 to $11,790.

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Complete Cost Breakdown

Item Cost When Due
Articles of Organization (Form LLC-1) $70 At filing
Statement of Information (Form LLC-12) $20 Within 90 days of formation
EIN (Federal Tax ID) $0 Anytime
Franchise Tax (Annual) $800 Exempt first year, then annually by April 15
Statement of Information Renewal $20 Every 2 years
TOTAL (First Year) $90
TOTAL (Year 2+) $800/year

Note: Optional costs like registered agent services ($100-300/year) and business licenses (varies by city/industry) are not included.

Timeline: How Long Does It Take?

Step Time Required
Choose name and check availability 15 minutes
Complete Form LLC-1 20-30 minutes
State processing (online filing) 3-5 business days
State processing (mail filing) 7-10 business days
Create Operating Agreement 1-2 hours
Get EIN from IRS 10 minutes (instant online)
File Form LLC-12 15 minutes
TOTAL (online filing) 5-7 days
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Common Mistakes to Avoid

1. Skipping the Operating Agreement

Even though California doesn't legally require it, banks often won't open business accounts without one. Plus, it protects you in disputes and strengthens your liability protection.

2. Forgetting the Statement of Information

You have 90 days after forming your LLC to file Form LLC-12. Miss this deadline and you'll face late fees and potential suspension of your LLC.

3. Not Budgeting for the $800 Franchise Tax

Many new business owners are shocked by the $800 annual fee. It's due every year regardless of whether you make a profit. Budget for it from day one.

4. Using Your Home Address as Registered Agent

Your registered agent address is public record. If you value privacy, consider using a professional registered agent service or a business address.

5. Paying Third-Party "EIN Services"

Scammers charge $50-200 to file for your EIN. The IRS does this for free. Never pay for an EIN.

Do You Need a Lawyer?

Short answer: No.

Forming a California LLC is simple enough to do yourself. The forms are straightforward, and the Secretary of State website has instructions.

When you might want a lawyer:

Typical lawyer cost: $500-1,500 for LLC formation services.

California LLC Checklist

Print this checklist and check off each item as you complete it:

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Frequently Asked Questions

Can I form a California LLC if I don't live in California?

Yes. You can form a California LLC from any state or country. However, you'll need a registered agent with a physical California address.

Do I need a California business license?

Maybe. It depends on your city and industry. After forming your LLC, check with your city clerk's office to see if you need local permits or licenses. Professional services (contractors, therapists, etc.) may need state-level licensing.

What's the difference between member-managed and manager-managed?

Member-managed: All LLC owners (members) make day-to-day decisions. Most common for small businesses.

Manager-managed: Members appoint one or more managers to run the business. Used when some members are passive investors.

Can I convert my sole proprietorship to an LLC?

Yes. You'll form a new LLC and transfer your business assets to it. Update your licenses, permits, contracts, and bank accounts with your new LLC name. Consult a tax professional about any tax implications.

What if I want to operate under a different name?

File a "Fictitious Business Name" (DBA - "Doing Business As") with your county clerk. This lets you operate under a trade name while maintaining your official LLC name for legal documents.

Do single-member LLCs pay the $800 franchise tax?

Yes. The $800 minimum franchise tax applies to all California LLCs regardless of the number of members or whether you make a profit.

How is a California LLC taxed?

By default, LLCs are "pass-through" entities—profits pass through to your personal tax return. Single-member LLCs are taxed as sole proprietorships. Multi-member LLCs are taxed as partnerships. You can also elect S-corp or C-corp taxation if beneficial.

Can I file online or do I have to mail the forms?

You can file online through BizFile Online. It's faster (3-5 days vs 7-10 days) and you get instant confirmation. Highly recommended over mail filing.

What Happens After Your LLC Is Approved?

Once the California Secretary of State approves your LLC, you'll receive:

Next steps:

  1. File Form LLC-12 within 90 days ($20 fee)
  2. Open a business bank account using your EIN and LLC documents
  3. Get business insurance (general liability, professional liability, etc.)
  4. Obtain required licenses for your city and industry
  5. Set up accounting (separate business finances from personal)
  6. Mark your calendar for annual $800 franchise tax (due April 15 of second year)
🎉 Congratulations! You've successfully formed a California LLC. Now focus on growing your business.
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Additional Resources

Last updated: February 25, 2026
Information verified with California Secretary of State and IRS guidelines.