How to Start an LLC in California
California has the largest economy of any US state — but also unique rules like the $800 annual franchise tax and the 90-day Statement of Information. Here’s exactly how to form your LLC the right way.
The Short Version
California makes you file with the Secretary of State, then stay compliant with two ongoing requirements most states don’t have.
How California LLC Formation Works
To start an LLC in California, you file Articles of Organization (Form LLC-1) with the California Secretary of State, appoint a registered agent with a California street address, and pay the $70 filing fee. Once approved, you get a business entity number and your LLC legally exists.
But California has extra steps that trip up new owners: you must file an initial Statement of Information (Form LLC-12) within 90 days of formation ($20), and pay an $800 annual franchise tax to the Franchise Tax Board every year — even if you made $0. There’s also no way around the franchise tax for California-based LLCs.
The whole process can be done online in 5 steps, and most filings are approved in 1-3 business days if filed online.
Heads up for California: Even if you form your LLC in another state but do business in California, California will still require you to foreign qualify and pay the $800 annual tax. You can’t avoid it by forming in Delaware or Wyoming if you live and operate in CA.
7 Steps to Start Your California LLC
Follow these in order — skipping one is the fastest way to get a rejection or penalty letter.
Choose a Name That Meets California Rules
Your name must include “Limited Liability Company”, “LLC”, or “L.L.C.” and be distinguishable from every other business on file with the California Secretary of State. You cannot include words like “Bank”, “Trust”, “Insurance” without approval.
- Search availability on the California Business Search tool
- Check domain and social handle availability
- Optional: Reserve name for 60 days for $10 with Name Reservation Request
Appoint a California Registered Agent
California requires every LLC to have a registered agent with a physical street address in California (P.O. Box not allowed) who is available during business hours to receive legal documents. You can be your own agent, appoint someone, or use a professional service.
- Must be 18+ and have a California address, or a company authorized to do business in CA
- Using a service keeps your home address off public record
- Most formation services include this for the first year
File Articles of Organization (Form LLC-1)
This is the official filing that creates your LLC. File online via bizfileOnline.sos.ca.gov for fastest approval.
- Fee: $70 standard filing
- Info needed: LLC name, business address, registered agent info, management structure (member-managed vs manager-managed), organizer signature
- Processing: 1-3 business days online, 2-4 weeks by mail
Create an Operating Agreement
California doesn’t legally require you to file an Operating Agreement with the state, but the California Corporations Code strongly recommends every LLC have one — and banks, investors, and courts will expect it. It defines ownership, profit distribution, voting rights, and what happens if a member leaves.
- Single-member LLCs should still have one for liability protection
- Keep it with your business records, do not file with Secretary of State
Get Your EIN from the IRS
An Employer Identification Number (EIN) is like a Social Security number for your LLC. You need it to open a business bank account, hire employees, and file taxes. It’s free directly from the IRS website.
- Apply free at IRS.gov (15 minutes online)
- Required even if you have no employees — California banks will ask for it
- Formation services like Bizee and Doola include EIN filing support
File Initial Statement of Information (Form LLC-12)
California requires every new LLC to file Form LLC-12 within 90 days of formation. This updates the state with your members/managers, business address, and agent.
- Fee: $20
- Deadline: Within 90 days of LLC-1 approval, then every 2 years after
- Penalty: $250 late fee if you miss it — one of the most common California LLC penalties
Handle California Tax & License Requirements
California LLCs have unique ongoing obligations you need to handle immediately after formation.
- Register with the California Franchise Tax Board for the $800 annual franchise tax (due by the 15th day of the 4th month after formation, then annually)
- Check if your city/county requires a local business license (Los Angeles, San Francisco, San Diego all do)
- If selling products, get a seller’s permit from CDTFA
- Open a separate business bank account to preserve liability protection
The $800 franchise tax catches everyone off guard: In California, you owe $800 per year just to keep your LLC active — even in year one, even if you had zero revenue. New LLCs get a first-year exemption under AB 85 if formed after 2021 (you still pay year two onward). Don’t forget to budget for this.
How Much Does an LLC in California Cost?
California is one of the more expensive states to form and maintain an LLC in.
| Fee / Requirement | Amount | When |
|---|---|---|
| Articles of Organization (LLC-1) | $70 | At formation |
| Initial Statement of Information (LLC-12) | $20 | Within 90 days of formation |
| Annual Franchise Tax | $800 / year | Annually (first year exempt for most LLCs formed after 2021) |
| Biennial Statement of Information | $20 every 2 years | Every 2 years thereafter |
| Registered Agent Service | $0 – $150 / year | If using a service (often free year 1 with formation packages) |
| City Business License | $30 – $150+ / year | Varies by city/county |
Total Year 1 (Minimum)
$90 if you qualify for the first-year franchise tax exemption ($70 LLC-1 + $20 LLC-12). Otherwise $890 including franchise tax.
Ongoing Annual Cost
At least $800/year franchise tax + $20 every 2 years for Statement of Information. City licenses are extra.
No Annual Report
California doesn’t have a separate annual report fee like many states — the biennial Statement of Information replaces it.
California LLC Compliance Checklist
Forming is the easy part — staying compliant is where California penalizes you if you forget.
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✓File Statement of Information on time — every 2 years
After the initial filing within 90 days, you must file LLC-12 every 2 years during your anniversary month. Set a calendar reminder — $250 late penalty.
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✓Pay the $800 franchise tax on time
Even if your LLC made $0, you owe it. FTB can suspend your LLC and pierce your liability protection if you ignore it. Pay online via FTB.
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✓Keep business and personal finances separate
California courts are strict about piercing the corporate veil. A dedicated business bank account is non-negotiable.
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✓Maintain a valid registered agent
If your registered agent resigns or moves and you don’t update the state within 30 days, your LLC can be suspended.
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✓Get required local licenses and permits
Los Angeles, San Francisco, San Jose, San Diego, and most CA cities require a separate local business license. Check your city hall website.
Best Services to Start Your California LLC
These platforms handle California’s extra paperwork — Statement of Information, EIN, and registered agent — so you don’t miss a deadline.
Bizee
Bizee offers a free LLC formation package — you only pay the $70 California state fee. Includes free registered agent for a year, EIN filing support, and they remind you about the LLC-12 and $800 franchise tax so you don’t get hit with penalties.
LegalZoom
LegalZoom is ideal if you want attorney support and ongoing compliance alerts for California’s Statement of Information and franchise tax. They also help draft a California-compliant Operating Agreement and handle S-corp election paperwork if you need it.
Doola
Doola bundles California LLC formation, EIN, US bank account setup, bookkeeping, and annual compliance — including the $800 franchise tax reminders and LLC-12 filing. Perfect for founders who want everything handled in one dashboard.
StartGlobal
StartGlobal specializes in helping non-US residents form a California LLC remotely — including EIN without an SSN, registered agent, California compliance, and cross-border banking support. Great alternative to Wise for international compliance.
Not legal advice: This guide explains how California LLC formation generally works based on 2026 California Secretary of State and FTB rules. Fees and requirements can change. For complex situations (multiple members, foreign ownership, S-corp election), consult a licensed attorney or CPA.
California LLC FAQ
Online filings via bizfileOnline are usually approved in 1-3 business days. Mail filings take 2-4 weeks, plus mailing time. Expedited 24-hour processing is available for an extra fee if you file in person in Sacramento.
Yes. California charges an $800 annual franchise tax for the privilege of having an LLC in the state, regardless of income. Since 2021, most new LLCs get a first-year exemption, but you will owe $800 starting year two. There is no way to waive it while keeping the LLC active.
Yes, if you have a physical street address in California and are available during normal business hours. Many owners use a professional service instead to keep their home address off public record and ensure they never miss legal notices.
Absolutely. California allows non-US residents to own LLCs. You’ll still need a California registered agent, a California address for the business, and an EIN from the IRS (which you can get without an SSN). Services like Doola and StartGlobal specialize in this exact use case.
California charges a $250 late penalty and can suspend or forfeit your LLC if you continue to ignore it. A suspended LLC loses its liability protection and cannot legally do business, sue, or defend itself in court until revived.
If you live and operate your business in California, you should almost always form in California. If you form in Delaware or Wyoming but work from California, California will still require you to foreign qualify in CA and pay the $800 franchise tax anyway — meaning you pay in both states.
Ready to Start Your California LLC?
Get your filing done right the first time and avoid the $250 late fees California loves to charge.
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