Starting an LLC in Los Angeles requires both California state filings and city-level registration. You’ll file your formation documents with the California Secretary of State, pay the state’s $800 annual franchise tax, and register for a Business Tax Registration Certificate with the City of Los Angeles. Here’s how to work through each step.
Choose a Name for Your LLC
Your LLC name must be distinguishable from any other business entity already on file with the California Secretary of State. The name must include “Limited Liability Company” or one of its abbreviations: “LLC” or “L.L.C.” You can search the Secretary of State’s business database online to check whether your preferred name is available before filing.
If you plan to operate under a name different from your official LLC name, you’ll need to file a fictitious business name statement (commonly called a DBA) with the Los Angeles County Clerk. This is separate from your LLC formation and typically involves a small filing fee plus a requirement to publish the fictitious name in a local newspaper.
Appoint a Registered Agent
California requires every LLC to designate a registered agent, which is a person or company authorized to receive legal documents and official notices on behalf of your business. Your agent must have a physical street address in California, not a P.O. box. You can serve as your own registered agent using your home or office address, or you can hire a commercial registered agent service, which typically costs $50 to $300 per year.
File Articles of Organization
To officially create your LLC, you file Form LLC-1, the Articles of Organization, with the California Secretary of State. You can file online through the Secretary of State’s bizfile portal or submit a paper form by mail. Online filing is faster and often processed within a few business days, while mailed forms can take several weeks.
The form asks for basic information: your LLC’s name, its purpose, your registered agent’s name and address, and whether the LLC will be managed by its members or by designated managers. The filing fee is set by the Secretary of State, so confirm the current amount on their website before submitting.
Pay the California Franchise Tax
Every LLC organized or doing business in California owes an annual tax of $800, regardless of whether the business earns any revenue. You have until the 15th day of the fourth month after your formation date to pay the first year’s tax. So if you file your Articles of Organization in June, your first payment is due by October 15. After that first year, the $800 is due on April 15 of each subsequent year. You pay using LLC Tax Voucher FTB 3522, filed with the California Franchise Tax Board.
LLCs that earn more than $250,000 in total California income also owe an additional fee on a sliding scale:
- $250,000 to $499,999: $900
- $500,000 to $999,999: $2,500
- $1,000,000 to $4,999,999: $6,000
- $5,000,000 or more: $11,790
This fee is due by the 15th day of the sixth month of your current tax year. For most calendar-year LLCs, that means June 15. The $800 annual tax continues even if your LLC is dormant. The only way to stop it is to formally cancel your LLC with the Secretary of State.
Get Your EIN
An Employer Identification Number (EIN) is a federal tax ID for your business, similar to a Social Security number but for the LLC itself. You need one to open a business bank account, hire employees, and file federal taxes. Applying is free and takes only a few minutes on the IRS website. Single-member LLCs that have no employees can technically use the owner’s Social Security number for tax purposes, but getting an EIN is still worth it. It keeps your personal SSN off business documents and is required by most banks.
Register for an LA Business Tax Certificate
Anyone conducting business within the City of Los Angeles must obtain a Business Tax Registration Certificate (BTRC) from the city’s Office of Finance. This applies whether you’re operating from a commercial space, a coworking office, or your apartment.
To register, you’ll need your LLC’s EIN, a description of your business activity, your legal business name and any DBA, your business start date, and your business and mailing addresses. The fastest way to register is online through the Office of Finance website, though you can also download a paper form and submit it by email or in person at a contact center.
One detail that catches new business owners off guard: your first year of business activity in Los Angeles is not tax-exempt. However, the city collects first-year taxes in the second year when you renew your BTRC. Some business classifications also require a minimum payment at the time of initial registration, so check whether your business type falls into one of those categories.
Check Zoning and Permit Requirements
If you plan to run your LLC from a home address in Los Angeles, the city allows home-based businesses but imposes specific restrictions. Your commercial activity cannot be visible from outside your home, so no signage or window displays. You’re limited to one non-resident employee working onsite, no more than two deliveries or pickups per day, and a maximum of one client visit per hour between 8 a.m. and 8 p.m. Mechanized equipment that wouldn’t normally be found in a home is not permitted. If clients or employees visit your home office, you may also need to ensure the space meets Americans with Disabilities Act accessibility requirements.
Businesses operating from commercial spaces may need additional permits depending on the industry. Restaurants, contractors, childcare providers, and other regulated businesses typically require separate city or county permits beyond the BTRC. The city’s Development Services Center and the LA Business Navigator can help you identify which permits apply to your specific type of business.
Create an Operating Agreement
California doesn’t require you to file an operating agreement with any state agency, but having one is essential. An operating agreement is an internal document that spells out how your LLC is owned, how profits and losses are divided, how decisions get made, and what happens if a member wants to leave or a new member joins. Even single-member LLCs benefit from an operating agreement because it reinforces the legal separation between you and the business, which is the whole point of forming an LLC in the first place.
Open a Business Bank Account
Once you have your Articles of Organization and EIN, open a dedicated bank account for your LLC. Keeping business finances separate from personal finances is critical for maintaining the liability protection your LLC provides. If you mix the two, a court could decide your LLC is just an extension of you personally, which means your personal assets could be exposed in a lawsuit. Bring your filed Articles of Organization, EIN confirmation, and operating agreement to the bank, as most institutions require all three to open a business account.
File Your Statement of Information
Within 90 days of forming your LLC, you must file an initial Statement of Information (Form LLC-12) with the California Secretary of State. This form lists your LLC’s current address, the names of managers or members, and your registered agent. After the initial filing, you’ll file an updated Statement of Information every two years during a six-month window that corresponds to the month your LLC was formed. For example, an LLC formed in March would file its biennial statement between March and October of the applicable year. Missing this filing can result in penalties and, eventually, suspension of your LLC by the state.
Understand Your Tax Elections
By default, a single-member LLC is taxed as a sole proprietorship, and a multi-member LLC is taxed as a partnership. In both cases, profits pass through to the owners’ personal tax returns. You also have the option to elect S-corp or C-corp tax treatment by filing the appropriate form with the IRS. S-corp election can reduce self-employment taxes for owners who pay themselves a reasonable salary, but it adds payroll obligations and additional paperwork. This election makes the most financial sense once your LLC is consistently profitable enough that the tax savings outweigh the added complexity.
Regardless of your federal tax election, California still imposes its $800 annual franchise tax and the income-based LLC fee. Los Angeles also collects its own business tax through the BTRC renewal process, with rates that vary by business classification.