How Much Does Forming a California LLC Cost?
Legal business registration — and keeping your business in good standing — requires some investment. Some of these costs are payable to the Secretary of State, while others are due to additional state entities or the federal government. We’ve summarized some of the most common fees and requirements here.
Note that California business license and permit fees may be due when you first form your business, on an ongoing schedule or on an ad hoc basis. Find more details below.
Initial California LLC Filing Fee
an LLC in California, you’ll need to file a form with the Secretary of State and pay a filing fee. Here are the current fees and filing times:
When you use Incfile for your California LLC registration, we charge you the state filing fee and forward it to the Secretary of State when we file your formation paperwork.
Employer Identification Number
Every business entity in the U.S. should have a unique Employer Identification Number (EIN) from the Internal Revenue Service. You'll use it when you open a business bank account, file taxes and pay employees. You can get one directly from the IRS, or Incfile can obtain one on your behalf.
If you want to do business in a state other than the one where your business is based, you must create a Foreign LLC.
California Foreign LLC Registration
Before you can bring an arm of your business from another state into California, you must request California Foreign Qualification. This means the state gives you permission to conduct business there.
To register a California Foreign LLC, you must complete an Application to Register a Foreign Limited Liability Company and pay a processing fee of $70. You must also attach "... a valid certificate of good standing by an authorized public official of the foreign jurisdiction under which the foreign limited liability company is organized."
Possible additional fees include $15 for in-person drop-off and $5 for a certified copy of your registration. You may also complete this application via the state's online portal.
California may have additional registration requirements, so contact the Secretary of State directly for more information and to ensure you're in compliance with state law.
Foreign Qualification to Operate in Another State
If you plan to expand your California LLC into another state, you’ll first need Foreign Qualification or a Certificate of Authority from that state. This is necessary before you can create a physical presence, hire employees or bank in that state.
You'll likely have to complete at least one application and pay a filing fee, but each state has its own requirements. Before you start the process, compare state filing times and state filing fees so you can plan accordingly.
Above all, contact the state government entity that administers business (usually the Secretary of State) for specific instructions and to confirm their requirements.
If you need assistance, Incfile provides a complete Foreign Qualification service for all states.
California Annual Report Requirements
Most states require business entities to file an annual (or other periodic) report. California calls their report a Statement of Information.
You must file a California Statement of Information biennially (every other year) and pay a $20 filing fee. Incfile can remind you to do this, or we can do it for you if you have us take care of your formation paperwork.
Important: Your first Statement of Information (Form LLC-12) is due within 90 days of your LLC formation date.
During six-month period ending on last day of anniversary month of incorporation or qualification.
The initial Statement of Information filing is due within 90 days of the entity formation date.
California Franchise Tax
Franchise Tax Fee
$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.
(Incfile does not assist in the filing of the Franchise Tax Report)
California Business License and Permit Requirements
Before you start doing business, you must secure the necessary state, federal or local business licenses and permits to operate your LLC. Some of the fees will only need to be paid once, while others may be ongoing charges.
Permits and licenses vary based on:
Operating your LLC without the required business license in California can leave you vulnerable to risks, such as fines from local, state and federal governments.
You can research these permits and licenses yourself, or use Incfile’s Business License Research Package, which includes:
- A complete report on all the licenses, permits and tax registrations your LLC will need
- The applications you'll need to file with the local, state and federal licensing authorities
You are legally required to have a California LLC Operating Agreement in place when you form your business.
This document covers how your business will be run, how managers and members will be chosen, rights and duties of members and several other key areas.
Aside from legal compliance, having an LLC Operating Agreement in California can be extremely helpful in making sure you’re organized and prepared for any future events that may affect your business.
You can make changes to the template based on your unique requirements.
Other California LLC Filing Requirements or Fees
You may need to pay and meet several other fees and requirements during the life of your LLC. These fees will only be payable in certain circumstances, as listed below.
Obtaining a Fictitious Name or DBA
If you want to establish a DBA in California (fictitious name), you must file with the clerk of the county where your business is located. Fees may vary. Contact your county clerk for more information.
Changing the Registered Agent
Your LLC must have a Registered Agent in California, which you need to appoint when you file your Articles of Organization. You can also change to a new Agent for Service of Process (Registered Agent) later by filing a California Statement of Information. There is no fee for this if the change is filed between regular Statement of Information due dates.
Reserving a Name for Your LLC
If you're not quite ready to start your business, you can reserve a name for 60 days with the Secretary of State by filling out a Name Reservation Request and paying a fee of $10. First, conduct a California business search and learn the state's business naming rules to ensure you choose a name that meets legal requirements.
Amending Facts About Your LLC
Your business formation paperwork includes certain facts about your business at the time it's formed. Over time, some of this information may change. If it does, you'll need to file an Amendment to the Articles of Organization with the Secretary of State along with a filing fee of $30. You can do this yourself or Incfile can do it for you.
Getting a Certificate of Good Standing in California
Some organizations may request that you prove your LLC’s compliance with laws and tax requirements. In most states, this proof is provided with a Certificate of Good Standing or Certificate of Existence. In California, it's a Certificate of Status.
If you need to prove you have met your commitments, you’ll need to request a California Certificate of Status from the Secretary of State. You can do this by submitting a Business Entities Records Order Form and paying a fee of $5.
The information listed above details many of the fees a standard LLC will be required to pay in California. In some circumstances, there may be other one-off, periodic or ad hoc fees not listed above.
Of course, your LLC will also probably need to pay self-employment, payroll, federal, state and other taxes. More information about taxes can be found on the California Business Tax page.