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CALIFORNIA

Why Form a Limited Liability Company (LLC)?


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Cities in California to Form Your LLC

Los Angeles California - LLC Formation in Los Angeles California San Francisco California - LLC Formation in San Francisco California

As the most populous state in the union, California has no shortage of cities where you can start your LLC. Here’s some of the key information on each city to help you make an informed choice.

Starting an LLC in Los Angeles, CA:

Los Angeles certainly has plenty going for it as a great place to start your LLC — warm beaches, the hub of the entertainment industry and a prominent influence for the fashion industry. Many startups and businesses have chosen L.A. as home base, including Hulu, Demand Media and Snapchat. Here is information helpful to starting your business in L.A.:

  • Area of Los Angeles city: 503 square miles (Metropolitan).
  • Population: 18.7 million in the metropolitan, city, and surrounding areas. It’s the largest city in California and the second largest city in the U.S.
  • Population density: 8,300 people per square mile.
  • Cost of living: 44 percent higher than the national average.
  • Time zone: Pacific time.
  • Sales tax in Los Angeles: 9 percent.
  • Economic outlook: the economic outlook in LA is likely to continue to improve.

Most Popular Industries in LA

The ten biggest industries in LA, in descending order of revenue are:

  1. Wholesale trade
  2. Manufacturing
  3. Retail trade
  4. Professional, scientific and technical services
  5. Health care and social assistance
  6. Real estate and rental and leasing
  7. Accommodation and food services
  8. Administrative, Support, Waste Management, Remediation Services
  9. Arts, Entertainment and Recreation
  10. Other services (except public administration)

Starting an LLC in San Francisco, CA

As a central hub of technology, innovation and culture, San Francisco is the city to start up a tech-based LLC, if you can afford the high cost of living. Despite San Francisco being the most expensive city in the United States to live, it has opportunities other cities might not have because so many entrepreneurs choose it as their home base. These opportunities include access to investors, unparalleled networking opportunities and shared housing opportunities for entrepreneurs. Here are some stats on what it's like to live and start a business in San Francisco:

  • Area of San Francisco city: 231 square miles (famously called "7x7" for being roughly 7 miles by 7 miles).
  • Population: 8.7 million in the metropolitan, city, and surrounding areas. It’s the fourth largest city in California and the 13th largest city in the U.S.
  • Population density: 18,400 people per square mile.
  • Cost of living: 78 percent higher than the national average with housing 222 percent higher.
  • Time zone: Pacific time.
  • Sales tax in San Francisco: 8.75 percent.
  • Economic outlook: the economic outlook in San Francisco is slowing slightly.

Most Popular Industries in San Francisco

San Francisco has a number of big industries including:

  • ​Finance
  • World commerce
  • Tourism
  • Technology

Starting an LLC in San Jose, CA

As the largest city in the Bay Area, San Jose is home to many tech startups and businesses across a range of sectors. But watch out, San Jose also made the list of most expensive cities in the world to buy housing.

  • Area of San Jose city: 2,694 square miles (Metropolitan).
  • Population: 8.7 million in the metropolitan, city, and surrounding areas. It’s the third largest city in California and the 10th largest city in the U.S.
  • Population density: 5,700 people per square mile.
  • Cost of living: 48 percent higher than the national average.
  • Time zone: Pacific time.
  • Sales tax in San Jose: 9 percent.
  • Economic outlook: The economic outlook in San Jose is cooling off slightly.

Most Popular Industries in San Jose

As home to “Silicon Valley,” San Jose is a national leader in the tech industry. It is also well represented in:

  • ​Professional services
  • Trade
  • Transportation
  • Utilities
  • Healthcare

Starting an LLC in San Diego, CA

Another popular choice for California startups, San Diego is worth a look. It might not be a metropolis like it's sister San Francisco and brother L.A., but San Diego has it's perks. Namely, 70-degree, year-round weather and a laid-back beach vibe.

  • Area of San Diego city: 372 square miles
  • Population: 3 million
  • Population density: 4,000 people per square mile
  • Cost of living: 46 percent higher than the national average
  • Time zone: Pacific time
  • Sales tax in San Diego: 8 percent

Most Popular Industries in San Diego

San Diego’s biggest industries include:

  • ​Manufacturing
  • Military and defense
  • Shipbuilding
  • Industrial machinery
  • International trade

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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
$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.

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