How to Start an LLC in California (2025 Guide)

How to Form an LLC in California in 6 Steps

In order to form your LLC in California, there are certain steps you’ll need to complete:

1. Name Your LLC
2. Choose a California Agent for Service of Process
3. File Your Articles of Organization
4. Create an LLC Operating Agreement
5. Obtain an EIN
6. File Your Initial Statement of Information

Step 1: Name Your California LLC

Before you get started, you will need to pick a suitable name for your California LLC. 

This will need to comply with all applicable California naming requirements and be both memorable and easily searchable for potential clients.

1. Important Naming Guidelines for California LLCs:

• Your name must include the phrase “Limited Liability Company or the abbreviations “LLC” or “L.L.C.” The words “Limited” and “Company” may be abbreviated to “Ltd.” and “Co.”
• Your name must be distinguishable from other entities in California.
• Your name cannot include words that create a false implication of government affiliation (e.g., Department, Commission, Division, etc.). 
• Your name cannot include words that create a false implication of your business’s purpose.

We recommend checking out the California Code of Regulations for a complete list of naming rules in this state.

2. Conduct a Business Name Search in California 

To check whether your desired name has already been taken by another business entity in California, you can perform a business entity search on the State of California’s website.

If you’re not going to start your LLC right away, it might be a good idea to consider reserving your name for up to 60 days, with a $10 processing fee.

For more information, you can have a look at our California LLC Name Search guide.

3. Conduct a Domain Name Search

It’s a good idea to check if your business name is available as a web domain. Even if you don’t plan to make a business website right away, as this is an extremely important step that can help prevent others from acquiring it, potentially saving you both time and money in the long term.

Once you have verified your name is available, you can select a professional service to complete the California LLC formation process.

FAQ: Naming a California LLC

Step 2: Choose a Registered Agent in California

After you find the right name for your LLC, you will need to nominate a registered agent, known in California as an agent for service of process. This is a necessary step in your Articles of Organization (i.e., the document used to file and register your LLC with the Secretary of State).

What is an agent for service of process? An agent of service of process is a person or business entity responsible for receiving important tax forms, legal documents, notices of lawsuits, and official government correspondence on behalf of your business.

Who can be an agent for service of process? An agent of service of process must be a full-time resident of California or a corporation, such as a registered agent service, individual within the company (e.g., yourself, or a business attorney, authorized to conduct business in the state of California. 

Tip: A substituted service of process through the Secretary of State’s office may be made upon a business entity if:

• Direct service of process has proven to be unsuccessful
• Attempts at direct service have been proven to be diligent in court
• A court order is hand-delivered to the Secretary of State’s Office in Sacramento with a copy of the process to be served, a copy of the court order permitting the service, and a $50 statutory fee.

FAQ: Nominating a Registered Agent

Step 3: File Your California LLC Articles of Organization

To register your California LLC, you must file Form LLC-1: Articles of Organization with the California Secretary of State.

Before filing your LLC paperwork, make sure you have completed your Articles of Organization correctly. You will need to have filled in the following sections:

• Contact person information, including full name and phone number (optional)
• Entity information, including name, entity number, and address.
• Agent of service of process information
• Management structure (e.g., member- or manager-managed)
• Purpose statement approval and signature

File the Articles of Organization

File Form LLC-1 Online With California bizfile Online

File Online

California Filing Cost: $70

For help completing the form, visit our California Articles of Organization guide.

If you’re expanding your existing LLC to the state of California, you must form a foreign limited liability company.

FAQ: Filing California LLC Documents

Step 4: Create a California LLC Operating Agreement

An operating agreement is required when forming an LLC in California.

An operating agreement is a legal document outlining the ownership and operating procedures of an LLC.

A comprehensive operating agreement ensures that all LLC members are on the same page and reduces the risk of future conflict.

You can use the free tool in our Business Center to create a custom operating agreement in minutes — or download our free templates:

• California Single-Member LLC Operating Agreement
• California Multi-Member LLC Operating Agreement

FAQ: Creating a California LLC Operating Agreement

Step 5: Get an EIN for Your California LLC

What is an EIN? You can get an Employer Identification Number (EIN) from the IRS for free. It is used when you file and pay taxes and is essentially a Social Security number (SSN) for the company.

An EIN is sometimes referred to as a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number (FTIN).

Why do I need an EIN? An EIN is required for the following:

• To open a business bank account for the company
• For federal and state tax purposes
• To hire employees for the company

Where do I get an EIN? The business owner obtains an EIN for free from the IRS after forming the company. This can be done online or by mail.

FOR INTERNATIONAL APPLICANTS: You do not need an SSN to get an EIN. Learn more here.

Get an EIN

Option 1: Request an EIN from the IRS

Apply Online

– OR –

Option 2: Apply for an EIN by Mail or Fax

Download Form

Mail to:
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999

Fax: (855) 641-6935

Fee: Free

FAQ: Getting an EIN

Step 6: File the Initial Statement of Information

All California LLCs (domestic and foreign) must file an Initial Statement of Information (Form LLC-12) with the California Secretary of State within 90 days of formation.

File the Initial Statement of Information

File the Statement Online through the California bizfile Online Platform

File Online

Fee: $20

Best LLC Services in California Compared

For a comprehensive comparison, read our Best LLC Service review. We reviewed and ranked the top LLC formation services to help you determine the best fit for your new business. 

Important Next Steps to Protect Your California LLC

After you’ve formed your LLC, you’ll need to complete key steps in order to:

• Separate your personal and business assets
• Stay compliant with state and federal laws

Get a Business Bank Account & Credit Card

Using a dedicated business banking account and business credit card is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your LLC is sued. In business law, this is referred to as piercing your corporate veil.

You can protect your business with these two steps:

1. Opening a business bank account:

• Separates your personal assets from your company’s assets, which is necessary for personal asset protection.
• Makes accounting and tax filing easier.

2. Getting a business credit card:

• Helps you separate personal and business expenses.
• Builds your company’s credit history, which can be useful to raise capital later on.

Get Insurance

Even though an LLC offers limited liability, you’ll still likely need to purchase some form of business insurance to protect your LLC’s assets. The most common types are:

• General Liability Insurance: A broad insurance policy that protects your business from lawsuits. Most small businesses get general liability insurance.
• Professional Liability Insurance: A business insurance for professional service providers (consultants, accountants, etc.) that covers against claims of malpractice and other business errors.
• Workers’ Compensation Insurance: A type of insurance that provides coverage for employees’ job-related illnesses, injuries, or deaths. In California, businesses with one or more employees, including LLC members and corporate officers, are required by law to have workers compensation insurance.

Want to learn exactly what coverage your California business may need? Read our full California Business Insurance Guide.

Obtain Business Licenses If Needed

While California doesn’t require a general state business license, your LLC may need specific licenses or permits based on its industry, location, and activities.

• State-Level Licenses: Use the California State License Search to determine if your business requires any state-issued licenses or permits.
• Local Licenses: Check with your city or county clerk’s office to identify any local licensing requirements, such as zoning permits or health department approvals.
• Federal Licenses: If your business activities are regulated by a federal agency (e.g., selling alcohol, firearms, or operating in transportation), consult the U.S. Small Business Administration’s guide to determine necessary federal licenses or permits.

For a comprehensive overview and step-by-step instructions, refer to our California Business License Guide.

Pay California LLC Taxes

Your California LLC will have several key tax obligations: 

Federal LLC Tax Requirements

As a pass-through entity, profits typically flow to your personal tax return. LLC members pay self-employment tax (15.3%) on their earnings.

Franchise Taxes

All LLCs in California are required to pay franchise tax. 

The rate for this tax is $800, which you’ll have to pay regardless of whether you operate at a loss — after your first year of operation.

Your LLC will typically need to pay its franchise tax bill by the 15th day of the fourth month of the current taxable year. You can pay online through the California Franchise Tax Board’s Web Pay platform.

Income Taxes

California also imposes taxes on the income of individuals and businesses in the state.

• Personal Income Tax: This is set at a gradual rate that ranges between 1% and 12.3% depending on the taxable entity’s income. You can use the California Franchise Tax Board’s Tax Calculator to find out how much you owe. 
• Corporate Income Tax: The net taxable income of an LLC business classified as C corps is subject to a flat tax rate of 8.84%. 
• Alternative Minimum Tax: Each LLC taxed as a C Corp is allowed a maximum of $40,000 in deductions. After these reductions are made, your Minimum Taxable Income (AMTI) is taxed at a rate of 6.65%, which is used to determine your provisional tax rate – known as Tentative Minimum Tax (TMT).  If your TMT exceeds the amount you’d owe in regular corporate income tax, your business will be required to pay the difference.

Sales and Use Taxes

If you are selling a physical product, you will need to obtain a seller’s permit through the California Department of Tax and Fee Administration (CDTFA).

This permit allows your business to collect sales tax on taxable sales. 

Sales tax, also called “Sales and Use Tax,” is a tax levied by states, counties, and municipalities on business transactions involving the exchange of certain taxable goods or services.

Read our sales tax guide to find out more.

Employer Taxes

If you have employees in California, you will need to register for several payroll taxes. These include unemployment insurance (UI) tax, employment training tax (ETT), personal income tax (PIT), and state disability insurance (SDI) tax. You can learn more about these taxes on the California Employment Development Department website.

Most California LLCs must file their state tax returns by April 15. For help understanding your full tax obligations — and making sure nothing gets missed — check out our full California LLC Tax Guide.

File the Biennial Statement of Information

After registering your LLC and filing a Statement of Information with the California Secretary of State, you’ll need to continue to submit this statement every two years thereafter. The deadline for this will depend on your initial filing date.

You can submit a Statement of Information for your LLC online alongside a $20 filing fee.

To stay on top of this deadline and other important compliance tasks, we recommend hiring a professional registered agent service — they can help ensure you never miss a filing.

Pay the Annual LLC Fee

If your LLC generates more than $250,000 in gross annual revenue in California, it will need to pay an LLC fee to the California Franchise Tax Board each year. The exact fee amount varies depending on your LLC’s income:

• $250,000–$499,999: $900
• $500,000–$999,999: $2,500
• $1 million–$4.99 million: $6,000
• $5 million+: $11,790

The LLC fee is due by the 15th day of the sixth month of your LLC’s taxable year. You can submit the return by mail using Form 3536.

California Business Resources

• TRUiC Business Center
• Local Resources
• California GO-Biz
• California Secretary of State – Business Entities
• California Tax Service Center
• California LLC Statutes