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CALIFORNIA

Why Form a Limited Liability Company (LLC)?


$49 + State Fee & 1st Year FREE Registered Agent

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Quick 6 Steps to Forming Your California LLC

California is a center of technology, entertainment, innovation and businesses that are changing the world. Some of the biggest brand names have started their business in California — from Dollar Shave Club and Snapchat to the big tech giants such as Facebook, Apple and Google. California is at the forefront of technology, and is brimming with top employee talent and beautiful locations to live. If you’re inspired to start your own business in California, one of the best ways to do so is by forming an LLC. Limited Liability Companies (LLCs) are a business entity designed for startups, and small- and medium-sized businesses.

LLCs are simple and inexpensive to set up in California. They provide you with many of the protections and advantages of larger corporations without all the rules, regulations and compliance issues common to other types of California business entities. First, let's understand the advantages of forming an LLC in California:

Advantages of Forming an LLC in California

LLCs in California have many benefits...

  • Setting up a California LLC is quick and easy — you can complete all the paperwork online in an hour or less and then file it with the Secretary of State
  • An LLC limits your personal liability — any liabilities your business has (debts, obligations and other liabilities) are separate from you as the business owner or founder
  • California LLCs are easy to maintain — there’s no need for formal annual meetings, boards of directors or complex rules or regulations. LLCs are very easy to manage and you can add and amend members and make other changes with just a little paperwork.
  • Doing your taxes is simple — any income you earn through your LLC is reported on your personal tax returns, both federal and local California state. This means you won’t run into “double taxation” issues common with larger corporations.

How to Setup your California LLC in Six Quick Steps

1. Name Your California LLC

  • You will need an original name for your LLC.
  • The name should be distinctive and not used by another LLC in California. To find out if another company is using your #1 business name choice, conduct a California business entity name search.
  • The name should not be confusable with the name of another business.
  • The name of your business must end with “Limited Liability Company” or the abbreviations “LLC.” “Limited” and “Company” can be abbreviated to “Ltd.” and “Co.”
  • For example: “Malibu Beach Luxury Rentals LLC” or “Redwood Ziplining and Tree Surgery, Limited Liability Company.”
  • You can search for other company names, including words you aren’t allowed to use in your company name, on the California Business Entity Search & Name page.

2. Provide the Address for Your New California LLC

Your California LLC must have a designated business address. That could be your home address (if you’re running the company from your residence) or where your office is located. You can’t use a PO Box, the address must be a physical street address.

3. Assign a Registered Agent for Your California LLC

Every California LLC must have a "registered agent". That could be you, the managing director, owner or a dedicated registered agent service. The registered agent in California is someone who receives official legal and tax correspondence and has responsibility for filing reports with the California Secretary of State.

At Incfile, all of our packages include a "Registered Agent" service free for the first year and $99 per year thereafter. We also have a dashboard you can login to and easily view any document your registered agent has received on your behalf. Here are a few reasons you might want to appoint Incfile as their registered agent service...

  • The Registered Agent must have a physical street address in the state where you are forming the company. Some people establish companies outside of the state they live in and will need to use a Registered Agent service to provide the address.
  • You always need to have someone on hand to receive important documents for your business during business hours (typically 9 AM to 5 PM Monday to Friday). Therefore, person must always be available to sign for legal correspondence.
  • The Registered Agent’s name and address is part of the public record and available through the California Secretary of State's website. If you would prefer your name and address isn’t published, this is a reason to choose a Registered Agent service.
  • If you change your California business address or move out of state, you don’t need to file additional documentation with the secretary of state for the new address of your Registered Agent. You will need to setup a new registered agent service in the new state.

There are more considerations, but this should help you with your decision to use a Registered Agent service.

4. Provide the Names and Addresses of California LLC Members

The LLC members are the individuals who own and run the business. They typically withdraw profits from the business to pay themselves. California requires you to list the names and addresses of all managers or members when you register the LLC. You can register these addresses as street addresses or P.O. boxes.

5. File the Articles of Organization with the California Secretary of State

Once you've gathered all the information together for your LLC, you’ll need to file formal documents with the California Secretary of State. Incfile can also do this on your behalf.

6. Put your California LLC Operating Agreement Together

An LLC should have an Operating Agreement. This defines how the business runs, how managers and members are chosen, rights and duties of members and several other key areas. Here’s how to create your Operating Agreement. If you’re interested in having your Operating Agreement created for you, Incfile will draft a general Operating Agreement within most of our online business formation packages. It can also be selected as an add-on option in our Silver package. This Operating Agreement will be a basic template that you can make changes to anytime you see fit.

You can find lots more useful information on how to form an LLC here. It answers questions like:

  • Who can form an LLC?
  • Where should you form an LLC?
  • When should you form an LLC?
  • What are the ongoing responsibilities for an LLC?

Useful Resources for Starting Your California LLC

How to Form a California LLC without Breaking the Bank

Incfile provides a cost-effective service to help you create your LLC. We guide you through the process and handle most of the administrative steps, such as filing the articles of organization on your behalf. Our basic package also provides a free registered agent service for the first year. If you're looking for help to start an LLC, our comprehensive services provide outstanding value.

*Note that some types of businesses cannot be formed as LLCs in California so you will need to choose a different business structure if you are one of these types of businesses.

Only $49 + State Free To Launch Your Business

Clear Pricing. No Contracts. No Surprise.

What are the fees and requirements to form a business in California?

Filing Time and Price

The state charges this amount to file a new business entity. This fee goes directly to the Secretary of State.

State Fee State Filing Time Expedited Filing Time
$100 15 Business Days 10 Business Days

Compliance Requirements

This report is mandatory and must be filed within the specified time frame in order for the entity to remain in good standing with the state. Failure to file this report can lead to the company being revoked or administratively dissolved.

Statement of Information

Frequency: Biennially

Due Date: During six-month period ending on last day of anniversary month of incorporation or qualification.

Filing Free: $20

Important:The initial Statement of Information filing is due within 90 days of the entity formation date.

 

California Franchise Tax

Frequency: Annually

Franchise Tax Fee: $800 (minimum)
$800 payment for the LLC Franchise Tax is due by 15th day of the 4th month after your LLC is filed. The month your LLC is filed counts as Month 1, regardless if you file on the 1st of the month, the last of the month, or any day of the month, really. This means that if you were to file your LLC on March 22nd, then you must pay the $800 fee no later than June 15th (in this example, March is Month 1, April is Month 2, May is Month 3, and June is Month 4). Then, every year after your first payment $800 LLC Franchise Tax will be due by April 15th. You pay the $800 LLC Franchise Tax using Form 3522 called the LLC Tax Voucher.
(We do not assist in the filing of the Franchise Tax Report)

Learn more about starting a business in California

Additional resources, guides, and articles for better decision making.

Select the package that works best for you.

Silver

49

+ $100 (state fee)

The Basics To Get You Started

Prepare & File Articles Of Organization
FREE Registered Agent for !st Year
Lifetime Customer Support

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GOLD

149

+ $100 (state fee)

Everything from Silver +

EIN / Tax ID Number
Personalized Operating Agreement
Customized LLC Kit

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Platinum

299

+ $100 (state fee)

Everything from Silver & Gold +

Expedited Filing
UPS Delivery
Contracts Library

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