Starting an LLC in California requires filing Articles of Organization with the Secretary of State, paying a $70 filing fee, and handling a few additional compliance steps. The entire formation process can be done online, and if you have your information ready, you can complete the filing in under an hour. Here’s everything you need to do, from start to finish.
Choose a Name for Your LLC
Your LLC name must be distinguishable from other business entities already registered in California. You can check availability using the business search tool on the Secretary of State’s website. The name must include “Limited Liability Company” or an abbreviation like “LLC” or “L.L.C.”
If you want to operate under a different public-facing name (a “DBA” or fictitious business name), you’ll register that separately with your county clerk’s office after forming the LLC. But the legal name on your Articles of Organization is what matters for state records.
Designate an Agent for Service of Process
California requires every LLC to have an agent for service of process. This is the person or company authorized to receive legal documents (like lawsuits) on your LLC’s behalf. You have two options: an individual who resides in California, or a registered corporate agent that has an active 1505 application on file with the Secretary of State.
You can serve as your own agent if you’re a California resident, but the LLC itself cannot be its own agent. Keep in mind that your agent’s name and physical street address become part of the public record. If you’d rather keep your home address off state filings, hiring a registered corporate agent (typically $50 to $300 per year) gives you that layer of privacy. Whoever you designate needs to agree beforehand, especially if you’re naming a corporate agent.
File Articles of Organization
The Articles of Organization is the document that officially creates your LLC. In California, you file this online through the Secretary of State’s portal at bizfileOnline.sos.ca.gov. The filing fee is $70, and online is the only filing method available.
The form asks for basic information: your LLC’s name, its business address, the name and address of your agent for service of process, and whether the LLC will be managed by one manager, more than one manager, or all members. Filing online typically results in faster processing than you’d get with a mailed form in other states, though the Secretary of State doesn’t publish exact turnaround times.
Create an Operating Agreement
California law requires every LLC to have an operating agreement. This document doesn’t get filed with the state. You keep it at the office where your LLC’s records are stored. But it’s legally required, and it’s also one of the most important documents your business will have.
An operating agreement lays out how the business is owned, how profits and losses are split, how decisions get made, and what happens if a member leaves or the LLC dissolves. For a single-member LLC, the agreement is simpler but still worth having. It reinforces the legal separation between you and your business, which is the whole reason you’re forming an LLC in the first place. For multi-member LLCs, it prevents disputes by putting the ground rules in writing before disagreements arise.
You can draft one yourself using a template or have an attorney prepare a customized version. Either way, make sure every member signs it and keep a copy with your business records.
Get an EIN from the IRS
An Employer Identification Number (EIN) is a federal tax ID for your business, similar to a Social Security number but for your LLC. You’ll need one to open a business bank account, hire employees, and file taxes. Even single-member LLCs with no employees benefit from having an EIN so they can keep personal and business finances separate.
Applying is free and takes about five minutes on the IRS website. You’ll receive your EIN immediately after completing the online application.
Pay the California Franchise Tax
Every LLC doing business or organized in California owes an annual franchise tax of $800. This tax is owed regardless of whether the LLC earns any income. The Franchise Tax Board (FTB) collects this payment, not the Secretary of State.
California previously offered a first-year waiver of the $800 tax for LLCs formed between January 1, 2021, and January 1, 2024. That waiver has expired, so LLCs formed now owe the $800 for their first tax year. The payment is due by the 15th day of the fourth month after your LLC’s tax year begins. For most calendar-year LLCs, that means April 15.
If your LLC’s total California income exceeds $250,000, you’ll also owe an additional annual fee that ranges from $900 to $11,790 depending on gross revenue. This is on top of the $800 minimum.
File Your Statement of Information
Within 90 days of forming your LLC, you must file an initial Statement of Information with the Secretary of State. After that, you’ll file a new one every two years during a six-month window tied to the month your LLC was formed. For example, if your LLC was formed in March, your biennial filing window runs from October through March.
The Statement of Information updates the state on your LLC’s current address, the names of managers or members, and your agent for service of process. You can file it online through the same bizfileOnline portal. Missing the deadline can result in penalties, and if you fall far enough behind, the state can suspend or even cancel your LLC.
Open a Business Bank Account
Once you have your Articles of Organization and EIN, open a dedicated bank account for the LLC. This isn’t just good practice. It’s essential for maintaining the liability protection your LLC provides. If you mix personal and business funds in the same account, a court could decide the LLC is just an extension of you personally, which means your personal assets could be exposed in a lawsuit. This is called “piercing the corporate veil,” and keeping finances separate is one of the simplest ways to prevent it.
Most banks will ask for your filed Articles of Organization, your EIN confirmation letter, your operating agreement, and a government-issued ID. Some banks also want to see a certified copy of your Articles, which you can order through the Secretary of State.
Handle Local Permits and Licenses
Forming your LLC with the state is just the business structure. Depending on what your LLC does and where it operates, you may also need local business licenses, city permits, or industry-specific registrations. Many cities and counties in California require a general business license, and certain industries (construction, food service, professional services) have their own state licensing boards.
Check with your city or county clerk’s office to find out what’s required in your area. The California Governor’s Office of Business and Economic Development (GO-Biz) also maintains a permit assistance tool that can help you identify which licenses apply to your industry.
Costs at a Glance
- Articles of Organization filing fee: $70 (one-time)
- Annual franchise tax: $800 per year (minimum)
- Statement of Information: $20 per filing (every two years)
- EIN: Free
- Registered agent service (optional): $50 to $300 per year
Your total first-year cost, at minimum, will be around $890 if you handle everything yourself. Add in a registered agent service or attorney-drafted operating agreement and the number goes up, but the state’s own fees are straightforward.