Starting an LLC in California is Easy
To start an LLC in California you will need to file your Articles of Organization with the California Secretary of State, which costs $70 online. You can apply online, in-person, or by mail or fax. The Articles of Organization is the legal document that officially creates your California Limited Liability Company.
Follow the steps below to form your California LLC today and get your business up and running.
STEP 1: Name Your California LLC
Choosing a company name is the first and most important step in starting your LLC. Be sure to choose a name that complies with California naming requirements and is easily searchable by potential clients.
1. Follow the naming guidelines for a California LLC:
- Your name must include the phrase “limited liability company,” or one of its abbreviations or words: “LLC, L.L.C., Limited, Ltd., Company or Co.”
- Your name cannot include words that could confuse your LLC with a government agency (FBI, Treasury, State Department, etc.).
- Restricted words (e.g. Bank, Attorney, University) may require additional paperwork and a licensed individual, such as a doctor or lawyer, to be part of your LLC.
- For a complete list of naming rules in California, you can read California's Code of Regulations.
2. Is the name available in California? Make sure the name you want isn't already taken by doing a name search on the State of California website.
3. Is the URL available? We recommend that you check to see if your business name is available as a web domain. Even if you don't plan to start a business website today, you may want to buy the URL in order to prevent others from acquiring it.
After registering a domain name, consider setting up a professional email account (@yourcompany.com). Google's G Suite offers a business email service that comes with other useful tools, including word processing, spreadsheets, and more. Try it for free
FAQ: Naming a California LLC
What is an LLC?
Do I need to get a DBA or Trade Name for my business?
Most LLCs do not need a DBA (Doing Business As). The name of the LLC can serve as your company’s brand name and you can accept checks and other payments under that name as well. However, you may wish to register a DBA if you would like to conduct business under another name. Read our guide, "What is a DBA?".
STEP 2: Choose a Registered Agent in California
You are required to appoint a California Agent for Service of Process for your California LLC. An Agent for Service of Process is more commonly known as a Registered Agent in other states.
What is an Agent of Service of Process? An Agent Of Service Of Process is a person or business entity responsible for receiving important tax forms, legal documents, notice of lawsuits, and official government correspondence on behalf of your business. Think of your registered agent as your business' point of contact with the state.
Who can be an Agent Of Service Of Process? An Agent of Service of Process must be a full-time resident of California or a corporation, such as an Agent of Service of Process, authorized to conduct business in the state of California. You may elect an individual within the company including yourself.
Recommended: ZenBusiness provides the first year of registered agent service free with LLC formation ($49 + State Fees)
FAQ: Nominating a California Registered Agent
Can I be my own Registered Agent?
Yes. You or anyone else in your company can serve as the registered agent for your LLC. Read about being your own registered agent.
STEP 3: File the California LLC Articles of Organization
To register your LLC, you will need to file the Articles of Organization with the Secretary of State. You can apply online, by mail, or in-person. Some states refer to the Articles of Organization as the Certificate of Formation or Certificate of Organization.
The Articles of Organization for an LLC (limited liability company) in California is a legal document to officially form your business. You’ll be expected to provide the name of your LLC, choose a registered agent, list the services your LLC will offer, and pay the state filing fee.
After you file the Articles of Organization, you must file an Initial Statement of Information (Form LLC-12) with the California Secretary of State within 90 days of forming your LLC.
When filing, you will need to state whether your LLC will be member-managed or manager-managed. We recommend learning more about member-managed vs manager-managed LLCs before you file.
File the Articles of Organization
OPTION 1: File Online with the State of California
- OR -
OPTION 2: File by Mail or In-Person
State Filing Cost: $70 when filing online or by mail (Nonrefundable)
Secretary of State
Business Entities Filings
P.O. Box 944228
Sacramento, CA 94244
1500 11th St.
Sacramento, CA 95814
Mon-Fri. 8 a.m. to 5 p.m.
Note (if filing in-person): Articles filed in person at the Secretary of State Office in Sacramento are subject to an additional $15 counter drop-off fee. This provides priority processing over applications submitted by mail. The filing counter is on the 3rd floor.
If you’re expanding your existing LLC to the State of California, you need to form a Foreign LLC.
FAQ: Filing California LLC Documents
What is the processing time to form my LLC in California?
- 5 business days online or by mail, but may be expedited for an additional fee.
- 4–Hour - $500.00:
- Same Day - $750.00:
- 24–Hour - $350.00:
What is the difference between a domestic California LLC and foreign LLC?
An LLC is referred to as a "domestic LLC" when it conducts business in the state where it was formed. Normally when we refer to an LLC we are actually referring to a domestic LLC. A foreign LLC must be formed when an existing LLC wishes to expand its business to another state. If you are filing as a foreign California LLC read our guide for more information.
STEP 4: File the Initial Statement of Information
All California LLCs are required to file an Initial Statement of Information (Form LLC-12) with the California Secretary of State within 90 days of forming your LLC. This can be done online, in-person, or by mail.
File the Initial Statement of Information
OPTION 1: File the Statement Online through the California Secretary of State
- OR -
OPTION 2: File the Statement by mail or in-person
Fee: $20 (Nonrefundable)
Secretary of State, Statement of Information Unit
P.O. Box 944230
Sacramento, CA 94244
California Secretary of State Sacramento Office
1500 11th Street
Sacramento, CA 95814
STEP 5: Create a California LLC Operating Agreement
An operating agreement is required when forming an LLC in California.
What is an operating agreement? An operating agreement is a legal document outlining the ownership and operating procedures of an LLC.
Why are operating agreements important? A comprehensive operating agreement ensures that all business owners are on the same page and reduces the risk of future conflict.
For more information on operating agreements, read our California LLC operating agreement guide.
Recommended: Download a template or create a Free Operating Agreement using our tool.
FAQ: Creating a California LLC Operating Agreement
Do I need to file my operating agreement with the State of California?
No. The operating agreement is an internal document that you should keep on file for future reference. However, many states do legally require LLCs to have an operating agreement in place.
STEP 6: Get an EIN for your California LLC
What is an EIN? The Employer Identification Number (EIN), Federal Employer Identification Number (FEIN), or Federal Tax Identification Number (FTIN), is a nine-digit number issued by the Internal Revenue System (IRS); an Employer ID Number is used to identify a business entity and keep track of a business’s tax reporting. It is essentially a social security number (SSN) for the company.
Why do I need an EIN? An EIN number 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? An EIN is obtained from the IRS (free of charge) by the business owner after forming the company. This can be done online or by mail.
FAQ: Getting an EIN
How do I get an EIN if I don’t have a social security number?
What tax structure should I choose for my LLC?
When you obtain an EIN, you will be informed of the different tax classification options that are available. Most LLCs elect the default tax status.
However, some LLCs can reduce their federal tax obligation by choosing S corporation status. We recommend consulting with a local accountant to find out which option is best for you.
Considering Using an LLC Formation Service?
We reviewed and ranked the top 5 LLC formation companies.
Find out which LLC service is best for you.
Business Banking for Personal Asset Protection
Get a Business Bank Account & Credit Card
Using dedicated business banking and credit accounts 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 California LLC is sued. In business law, this is referred to as piercing your corporate veil.
You can protect your California LLC 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.
Recommended: Get $200 when you open a business checking account with Chase. Learn more.
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 Business Insurance
Business insurance helps you manage risks and focus on growing your LLC. The most common types of business insurance 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. Get a free quote with ADP.
How much will the right insurance cost you? Click here to find out.
Properly Sign Legal Documents
Improperly signing a legal document as yourself and not as a representative of the business can leave you open to personal liability. When signing legal documents on behalf of your California LLC, you could follow this formula to avoid problems:
- Formal name of your business
- Your signature
- Your name
- Your position in the business as its authorized representative
See the image below for an example.
This ensures that you are signing on behalf of your California LLC and not as yourself.
Learn more on how to protect your business & personal assets by reading our article - How to Maintain your LLC Corporate Veil.
Keep Your Company Compliant
California Business Permits & Licenses
Do I need business licenses and permits?
To operate your LLC in California you must comply with federal, state, and local government regulations. For example, restaurants likely need health permits, building permits, signage permits, etc.
The details of business licenses and permits vary from state to state. Make sure you read carefully. Don't be surprised if there are short classes required as well.
Fees for business licenses and permits will vary depending on what sort of license you are seeking to obtain.
Find out how to obtain necessary California business licenses and permits for your LLC or have a professional service do it for you:
- Federal: Use the U.S. Small Business Administration (SBA) guide to federal business licenses and permits.
- State: Apply for or learn more about licenses, permits and registration with the State of California's CalGold website.
- Local: Contact your local county clerk and ask about local business licenses and permits.
California LLC Tax Requirements
Depending on the nature of your business, you may be required to register for one or more forms of state tax:
If you are selling a physical product, you’ll typically need to register for a seller's permit through the state of California’s website. This certificate allows a 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.
If you hire employees, you will need to register for California Employer Taxes, which includes Employee Withholding Tax, Unemployment Insurance Tax, and Disability Insurance through the California Payroll website.
FAQ: Additional Taxes
What is the California Franchise Tax?
There is a Franchise Tax for each LLC formed in California which varies depending upon your LLC’s income. Read about California's biennial report and franchise tax.
Federal LLC Tax Requirements
Most LLCs will need to report their income to the IRS each year using:
- Form 1065 Partnership Return (most multi-member LLCs use this form)
- Form 1040 Schedule C (most single-member LLCs use this form)
Read our LLC Tax Guide to learn more about federal income taxes for LLCs.
California Biennial Report & Franchise Tax
LLCs in California are required to file a biennial report, also known as the Statement of Information, with the California Secretary of State. This must be submitted on paper, by mail or in person (drop off).
File your Biennial Report
OPTION 1: File Online with the Secretary of State
- OR -
OPTION 2A: File form LLC-12NC by mail or in-person if none of your business information has changed
- OR -
OPTION 2B: File form LLC-12 by mail or in-person if some of your business information has changed
Fee: $20 for each biennial statement (Nonrefundable)
Due Date: Every second year by the end of the month in which your LLC was formed.
Late Filings: California charges a $250 penalty for failure to file on time.
California LLCs are required to pay an annual Franchise Tax. You can do this online or by mail.
File and Pay Your Franchise Tax Online through the California Franchise Tax Board
- OR -
File and Pay Your Franchise Tax by Mail through the California Franchise Tax Board
You can pay by mail by making a check or money order payable to the "Franchise Tax Board," along with the Estimated Fee Form.
Franchise Tax Board
P.O Box 942857
Sacramento, CA 94257
- $800 for LLCs with annual revenue < $250,000.
- $800 + Estimated Fee for LLCs with annual revenue > $250,000
Avoid Automatic Dissolution
LLCs may face fines and even automatic dissolution when they miss one or more state filings. When this happens, LLC owners risk loss of limited liability protection. A quality registered agent service can help prevent this outcome by notifying you of upcoming filing deadlines, and even submitting reports on your behalf for an additional fee.
Recommended: ZenBusiness offers a reliable registered agent service and excellent customer support.
We understand that creating an LLC in California and getting your business up and running comes with many challenges. To help you succeed, we compiled the best local resources in every major metro area in California. You can get free assistance in the following areas:
Make Running Your Business Easier
After starting a business, two of the most important things you can do are get professional accounting and hire the right employees. Streamlining these processes can save you time and money as your business grows.
If you plan to hire employees for your California LLC, stay compliant with the law by following these steps:
- Verify that new employees are able to work in the US
- Report employees as "new hires" to the State
- Provide workers' compensation insurance for employees
- Withhold employee taxes
- Print compliance posters and place them in visible areas of your work space
For more information, check out California's Tax Service Center.
Recommended: Check out our Hiring for your Small Business Guide for resources like sample job descriptions, payroll service reviews, and more.
FAQ: Hiring Employees
What is the minimum wage in California?
The statewide minimum wage in California is $13.00 per hour for employers with 26 or more employees. Businesses with 25 or fewer employees have a minimum wage of $12.00 per hour.
How often do I need to pay employees?
In California, wages are required to be paid at least twice during each calendar month on days designated as regular paydays by the employer.
Accounting for your LLC
It’s critical to get your books in order-- even if you haven’t officially opened for business. A well managed accounting system will help you:
- Track your business finances, including bills, expenses and income.
- Simplify your annual tax filings.
The right software makes accounting easy. Look for software that:
- Syncs with your bank automatically.
- Matches transactions to invoices, bills and purchase orders.
- Can be accessed from your phone.
Recommended: QuickBooks has all the accounting features your small business will need.
Women in Business Tools and Resources
If you have a woman-owned business, many resources are available to help you concentrate on your business’s growth:
- Funding - (ie. grants, investors, loans)
- Events - (ie. conferences, meetups)
- Guides - (ie. business formation, personal growth)
- Support - (ie. advice, communities, business strategies)
Our information and tools will provide educational sources, allow you to connect with other women entrepreneurs, and help you manage your business with ease.
TRUiC has created video guides to support and reinforce our on-page guides. These videos help to visualize the ideas and lessons that you need to know to create and run a successful business.
Check out our growing library of small business videos on the TRUiC YouTube channel.
Forming a foreign LLC allows your company to operate as one entity in multiple states. If you have an existing LLC and want to do business in California, you will need to register as a foreign LLC. This can be done by mail.
Register as a Foreign LLC in California
File by Mail with the California Secretary of State
Fee: $70 (Nonrefundable)
Secretary of State, Business Entities Filings Unit
P.O. Box 944228
Sacramento, CA 94244
How to Obtain a Certificate of Good Standing
A Certificate of Good Standing, known in California as a Certificate of Status, verifies that your LLC in California was legally formed and has been properly maintained. Several instances where you might need to get one include:
- Seeking funding from banks or other lenders
- Forming your business as a foreign LLC in another state
- Obtaining or renewing specific business licenses or permits
To order a Certificate of Status in California, you must complete the Business Entities Records Request Form. You can submit this form either in person at the Secretary of State, or by mail.
Order a Certificate of Good Standing
Request a Certificate by Mail or In-Person
Fee: $5, payable to the California Secretary of State (Nonrefundable)
Secretary of State
BE Certification and
P.O. Box 944260
Sacramento, CA 94244
1500 11th St.
3rd Floor, Room 380
Sacramento, CA 95814
Mon-Fri. 8 a.m. to 5 p.m.
Dissolve Your California LLC
If at any point in the future you no longer wish to conduct business with your LLC, it is important to officially dissolve it. Failure to do so in a timely fashion can result in tax liabilities and penalties, or even legal trouble. To dissolve your California LLC, there are two broad steps:
- Close your business tax accounts
- File the Articles of Dissolution
When you are ready to dissolve your LLC, follow the steps in our California LLC Dissolution Guide.
Read more about LLCs and how to run a business
State of California Quick Links
- GO-Biz: California's One-Stop-Shop for business.
- Small Business Assistance Center
- California Secretary of State - Business Entities
- California Tax Service Center
- Contact California SOS
- SBA's Small Business Resource for Sacramento
- SBA's Small Business Resource for Los Angeles
- SBA's Small Business Resource for Fresno
- SBA's Small Business Resource for San Diego
- siness Resource for Santa Ana
- California LLC Statutes