What do I need to form an LLC in California?
You will need to decide who will be involved in your LLC and get the relevant information from them. Next, you should search for your proposed business name for your California LLC to see if it’s already in use. After that, you’ll need to provide an official business address and details of your Registered Agent. You can then complete and file your formation documents to officially create your LLC.
Can I form an LLC in California entirely online?
No, you will need to fill in the necessary forms and mail them to the California Secretary of State. You should gather relevant information from everyone involved in the LLC and fill out your Articles of Organization. You can then send them to the Secretary of State.
Does a California LLC need an EIN?
Single-member California LLCs don’t strictly need an Employer Identification Number (EIN) unless you’re going to hire employees, but we recommend obtaining one anyway. Multi-member California LLCs must have an EIN. You can get an EIN directly from the IRS or have Incfile obtain one for your California LLC.
Do I need a business license in California?
The types of business licenses your California LLC may need are based on several factors. These include: local licenses for the city, county or municipality where you’re doing business; specialized licenses depending on the products and services you provide; and other licenses for the industry you operate in. Incfile provides a complete Business License Research package for California LLCs so you’ll know every license and permit required of you.
How do I pay LLC fees in California?
It depends on which fees you are paying. The fees you might have to pay are:
- A fee to form your LLC
- An annual franchise tax fee
- A fee when you file a Statement of Information report, due every two years
- Federal income tax
- Federal self-employment tax
- State income tax
- Estimated taxes for federal income, federal self-employment and state income tax
- Fees for business licenses and permits
We’ve covered details for each of these below.
What is the California Annual Franchise Tax and how does it work?
The California Franchise Tax Board requires a yearly payment of $800 from LLCs that do business in or are formed in the state. Unless you cancel or dissolve your LLC, this franchise tax is payable even if you are not doing business.
Do I have to pay franchise tax in my first year as an LLC?
Normally, yes. California LLCs are not subject to the franchisor tax fee if both of the following are true: you did not conduct any business in California during the tax year; your tax year was 15 days or fewer.
Do LLCs pay taxes in California?
California LLCs themselves do not pay income or self-employment tax. These taxes are “passed through” to the owners and are taxed when the individual files their 1040 income tax returns. California LLCs do need to pay sales tax if they sell taxable products or services.
What’s the tax rate for LLCs in the State of California?
California LLCs themselves don’t pay income or self-employment taxes. Those taxes “pass-through” to the members’ 1040 individual income tax forms where federal income tax (rates start at 10 percent) and self-employment tax (rate of 15.3 percent) will both be payable.
California does charge a state income tax of between 1 and 13.3 percent, depending on taxable income. As with federal income tax, this tax is paid when you file your California personal income tax return. Other taxes that your California LLC may be liable for are sales taxes of around 7.25 percent if you sell taxable goods or services.
Additional taxes may be payable depending on the type of business you run and the goods and services you sell. Note that you will also need to pay estimated taxes to the IRS and to the California Department of Tax and Fee Administration four times a year.
Do I need to pay estimated taxes?
Yes. You will need to make estimated tax payments to the IRS and California state four times a year. If you do not make estimated tax payments, you may be charged a penalty.
Where do I go to file California sales tax and get a sales tax license?
You can apply for a sales tax ID and file your sales tax through the California Department of Tax and Fee Administration website.
How do I register a business name in California?
Your California LLC name will automatically be registered when you file your Articles of Organization with the Secretary of State. Incfile can also do this on your behalf.
Where do I go to file my LLC paperwork in California?
You will file your formation and other paperwork with the California Secretary of State. You must complete most filings by mail or fax, although the Secretary of State does allow you to file some paperwork online.
What’s the form to file an LLC in California?
The form you need to file to start an LLC is called your “Articles of Organization.” You file this form with the California Secretary of State, or we can help you gather the information you need and file the form on your behalf.
Does California have a periodic reporting requirement for LLCs?
Yes. You will need to file a California Statement of Information report for your LLC. The initial report is due within 90 days of forming your LLC and is then due every two years. You can file this online with the Secretary of State, or have Incfile file your public information report on your behalf.
Does California have Series LLCs?
No. California does not allow for the formation of series LLCs. Series LLCs are currently only available in a few states, including Delaware, Illinois, Iowa, Nevada, Oklahoma, Tennessee, Texas and Utah.
Does California have Professional LLCs?
No. 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.
How much does it cost to get an LLC in California?
The current fee for incorporating an LLC in California is $70, payable to the Secretary of State. If you need your LLC formed quickly, additional fees ranging from $350 to $750 will get you faster processing. Some incorporation businesses may also charge an additional fee for completing and submitting paperwork on your behalf. Incfile does not charge any additional fees, meaning you only pay the state fee of $75 for LLC formation through us. Incfile also offers an expedited processing time of five days for a fee of just $50.
How long does it take to file an LLC in California?
The standard processing time from filing your Articles of Organization to being legally created as a California LLC varies according to the CA Secretary of State. If you incorporate your business with Incfile, your LLC will be ready in 15 business days. You can also pay an expedited filing fee to the Secretary of State to have your California LLC created the same day or Incfile can do it within five days for a $50 fee.
How do I find available business names in California?
You will need to find a unique business name for your California LLC that’s not already in use in the state. You can search for business names on the Secretary of State website, or Incfile can search for business names on your behalf. California does have certain rules about words you can and can’t use in your business name.
Do I need an Operating Agreement in California?
Yes, you are required to have an Operating Agreement for a California LLC. Here’s more information on how to create one. This agreement will specify how the business is run, how profits will be split, how members will interact and other important factors.
What is Form 3522 in California?
Form 3522 is the LLC Tax Voucher (FTB 3522). You use it to pay your annual LLC franchise tax.
What is Form 568 in California?
Form 568 is an annual form you will need to file and is the Return of Income that many limited liability companies (LLCs) are required to file in the state. Form 568 is filed with Form 3522.
What is Form LLC-12 in California?
Form LLC-12 is more commonly known as the Statement of Information. You will need to file it with the California Secretary of State every two years to tell them about changes within your business.
What is Form LLC-1 in California?
Form LLC-1 is more commonly known as your Articles of Organization. This is the form you fill out and file with the California Secretary of State to legally create your LLC.
What is Form LLC-5 in California?
Form LLC-5 is the form you file to establish a Foreign LLC in California.
Do I need business permits and licenses in California?
Generally, yes, and these permits and licenses will vary depending on where you’re running the business, the industry you are in and several other factors. There will likely be annual fees you need to pay for permits and licenses. To learn what permits and licenses your LLC needs, you can use Incfile’s Business License Research service.
How do I dissolve an LLC in California?
If you want to dissolve your business, you will need to complete and file a “Certificate of Cancellation” or a “Certificate of Dissolution.“ These are available on the Secretary of State website.