How to Form an LLC in California

Step 1: Choose a Name That Meets California's Rules

Your California LLC name must contain an LLC identifier such as "LLC" or "L.L.C." (the Secretary of State adds "LLC" automatically if you leave it off), and must be distinguishable in the Secretary of State's records from every other corporation, LLC, and limited partnership on file or reserved. Search your proposed name through bizfileOnline's business search before filing. If you're not ready to file immediately, reserve an available name for $10; the reservation lasts 60 days and can't be renewed for consecutive 60-day periods, so at least one day has to pass between reservations.

Step 2: Name an Agent for Service of Process

California calls its registered agent an "agent for service of process." It can be an individual who resides in California and lists a California street address (no P.O. box), or a registered corporate agent already on file with the Secretary of State under Corporations Code section 1505. A member or manager of your LLC can serve in this role personally, as long as they reside in California and have a qualifying street address. The LLC itself can't be its own agent.

Step 3: File Articles of Organization

File Form LLC-1, Articles of Organization, with the California Secretary of State's Business Entities division for $70, online through bizfileOnline, by mail, or in person. Processing time depends on current filing volume; the Secretary of State posts current processing dates on its own site, and standard mail processing can take several weeks. If you need faster processing, California offers a 24-hour service for $350 extra, same-day service for $750 extra (by 4:00 p.m., if received by 9:30 a.m.), or a 4-hour service for $500 extra that requires prior preclearance and drop-off in Sacramento.

Step 4: Get an EIN From the IRS

Once your Articles of Organization are approved, apply for a free EIN directly from the IRS, usually issued immediately through the online application. Have your approved California filing on hand, since the EIN application asks for your LLC's exact legal name and formation date.

Step 5: Put a Written Operating Agreement in Place

Unlike most states, California requires every LLC to have an operating agreement, written or oral, among the members. A single-member LLC can satisfy this with a simple written statement from that one member. It's never filed with the Secretary of State; keep it with your LLC's own records.

Step 6: File Your Statement of Information and Pay the Annual Tax

File your first Statement of Information (Form LLC-12) within 90 days of registering, for a $20 fee, then again every two years during a 6-month window tied to your registration month, filed in even years if you registered in an even year or odd years if you registered in an odd year. Missing the deadline brings a $250 penalty, billed by the Franchise Tax Board on the Secretary of State's behalf, and can lead to suspension.

Separately, every California LLC owes an $800 annual tax to the Franchise Tax Board, due by the 15th day of the 4th month after registration and every year after, regardless of income, until the LLC is cancelled. LLCs with $250,000 or more in total California income also owe an additional LLC fee, from $900 to $11,790 depending on income, estimated and paid by the 15th day of the 6th month of the tax year on Form 3536. If you'll sell taxable goods, register for a Seller's Permit with the California Department of Tax and Fee Administration at no cost; if you'll hire employees, register with the Employment Development Department. For the full picture of California's fees and taxes, see our California LLC guide.

The $800 Annual Tax Applies Even in a Year With No Income

Unlike most states' annual report fees, California's $800 LLC tax isn't tied to whether the business made money. It's due every year the LLC exists, from its first partial year through the year it's formally cancelled with the state. Budget for it as a fixed cost of keeping the LLC open, not something that depends on revenue.

The Statement of Information Deadline Isn't a Fixed Calendar Date

Because the filing window is tied to your LLC's registration month and whether you registered in an even or odd year, it's easy to lose track of when it's actually due. Set a reminder based on your specific registration date rather than assuming it falls on the same date every other state uses for an annual report.

California Generally Bars LLCs From Licensed Professional Services

Corporations Code section 17701.04(b) prevents an LLC from providing services that require a license under the Business and Professions Code, unless that code specifically authorizes an LLC to hold the license, which it does for only a few fields such as chiropractic and osteopathic medicine. Licensed professionals such as attorneys, physicians, and accountants typically use a registered limited liability partnership or a professional corporation instead.

California Doesn't Allow Domestic Series LLCs

If a series LLC structure matters to your plans, know that California's LLC Act has no domestic series LLC provisions. A series LLC formed in another state can register as a foreign LLC in California, but the Franchise Tax Board treats each series as a separate entity that owes its own $800 annual tax. None of this is tax advice; talk to a tax professional about how the annual tax and additional LLC fee apply to your specific revenue.