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CALIFORNIA

Why Form a Limited Liability Company (LLC)?


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How to Start a 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 it’s brimming with top employee talent and beautiful locations to live.

For most business owners, the fastest and easiest way to start a business in California is by creating a California LLC. A Limited Liability Company (LLC) is a type of business entity that’s ideal for startups and small- to medium-sized businesses. You get the advantages and protections of larger California corporations but with much simpler rules and regulations.

Briefly, the benefits of starting a California LLC include:

  • Separating and limiting your personal liability from your business liability and debts
  • Quick and simple filing, management, compliance, regulations and administration of your California LLC
  • Easy tax filing and potential advantages for tax treatment

Learn more about the benefits of the LLC business structure.

Start a California LLC in Six Quick Steps

We’ve got lots of useful information on starting a business in CA. On this page you’ll find the basic steps of how to form a California LLC, with more in-depth content throughout the rest of our guide.

1. Gather Information for Your Members

First, you need to gather basic information about your LLC, including the names and addresses of the managers or members. The LLC members are typically the people who own and run the business. They are also the ones who can take profits out of the business to pay themselves.

2. Search for and Choose a Unique Business Name for Your California LLC

You will need a distinctive and original name for your California LLC that’s not used by any other business in CA. To find out if another company is using your chosen business name, carry out a California business entity name search on the CA Secretary of State website.

There are a few rules you’ll need to follow when choosing an LLC name. You can find out more in our guide to searching for and naming your California LLC.

Learn about California LLC business naming rules.

3. Provide an Official Address for Your CA LLC

Every California LLC must have a designated street address. That could be your home address (if you’re running the company from your residence), your company’s office building or any physical address of your preference. The address must be inside the state of California, but it cannot be a P.O. box.

4. Assign an Agent for Service of Process for Your California LLC

Every CA LLC must have a “Registered Agent,” known in California as an “Agent for Service of Process” when it is formed. This is an official position; the Registered Agent is someone who receives official legal and tax correspondence and has responsibility for filing reports with the California Secretary of State.

This position can be filled by you, another manager in the business or a dedicated Registered Agent service. Your CA Registered Agent must have a physical street address in California and must be present to receive important documents for your company during business hours.

At Incfile, all of our packages include a California Registered Agent service that is free for the first year and just $119 per year afterward. We also have a dashboard where you can log in and easily view any document your Registered Agent has received on your behalf.

Learn more about California Agents for Service of Process.

5. Get an Employee Identification Number (EIN) From the Internal Revenue Service

You will need an EIN to identify your business to the IRS. You use this number when filing and paying taxes or when submitting payroll information and payments for your employees. You can obtain one directly from the IRS, or we can get one for you as part of the California LLC business formation process.

6. File Articles of Organization With the California Secretary of State

Once you've gathered all the information for your California LLC, you’ll need to file a formal document with the CA Secretary of State. This document is known as your “Articles of Organization,” and filing the document creates your California LLC. Here’s what is typically included:

  • Your business name and address
  • Details of your Agent for Service of Process
  • Management structure
  • Name of the incorporator

You can file your California LLC Articles of Organization online, mail in a form or have Incfile do it on your behalf. There is a fee to file and start an LLC in California. You only need to file your Articles of Organization once.

Form Your LLC Now

Review Information From the California Secretary of State

The CA Secretary of State has plenty of additional information on forming and running a business in California.

Special Types of California LLCs

A regular California LLC is suitable for most business needs, but you also have a few other options to incorporate a special type of LLC.

Form a Professional California LLC

Some states allow certain occupations to form “Professional LLCs.” These types of business typically have specialized requirements and licensing. California does not recognize or allow professional LLCs, and the state does not allow professional services to be provided by LLCs. Instead, if you want to provide professional services, you will need to form a CA corporation.

Form a Foreign LLC in California

If your business is already operating in another state and expanding to California, you’ll need to form a foreign LLC.

More information on California filing and licensing requirements here <link ‘to state page once created>

Detailed Information for Your California LLC

You’ll find plenty more insight and guidance on the other pages of this guide, including:

Naming Your California LLC

How to search the California business registry of the CA Secretary of State and find the right name. Includes information on naming rules, fictitious names, reserving a California LLC name and more.

California Registered Agents for Your LLC

How to appoint a California Registered Agent to your new LLC or change to a different Registered Agent. Includes information on Registered Agent rules and searching for California Registered Agents.

Fees and Requirements for Your California LLC

How to understand the various fees you’ll need to pay and the requirements you’ll need to meet for both federal and California rules. Includes details of Employee Identification Numbers (EINs), California and federal business licenses, California annual reports and more.

Federal, State, Sales and Other Taxes for Your California LLC

How to understand the various taxes you will need to pay to the federal and California government. Includes details of federal taxes like income and self-employment, and California taxes like sales tax and income tax.

Only $49 + State Fee To Launch Your Business

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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
$75 15 Business Days 5 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 Fee: $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.

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