How to Form an LLC in California — Step-by-Step Guide
Here's how to form an LLC in California: file your Articles of Organization, meet the state's Statement of Information and franchise tax rules, and stay in good standing.
Updated 2026-08-15
Key Takeaways
- Filing the Articles of Organization (Form LLC-1) with the California Secretary of State costs $70.
- California LLCs owe an $800 minimum annual franchise tax to the Franchise Tax Board starting in year two — waived in year one for LLCs formed after January 1, 2021.
- An initial Statement of Information (Form LLC-12) is due within 90 days of formation, then again every two years, with a $250 penalty if you miss the deadline.
- California is one of the only states that legally requires every LLC to have an operating agreement, whether or not it's filed anywhere.
- CompanySage builds and files through the state's bizfile system, with 24-hour filing included at no extra cost on every formation package.
Why Form an LLC in California
If you're doing business in California — selling to California customers, hiring California employees, or holding California property — an LLC is one of the most direct ways to separate your personal assets from your business's debts and liabilities. It's a structure freelancers, small business owners, and real estate investors reach for specifically because it doesn't come with the rigid management rules a corporation does: you and your co-owners decide how the company is run and how profits are split, and by default the business itself isn't taxed separately — income passes through to your personal return.
California does make LLC ownership more expensive than most states, mainly through its $800 annual franchise tax, so it's worth going in with eyes open. But for founders who need liability protection and flexibility to operate in the country's largest state economy, forming an LLC in California is usually still the right call — banks, investors, and vendors increasingly expect a formal entity before they'll do business with you at all.
The scale of that opportunity is part of the draw: California is regularly cited as the world's fifth-largest economy on its own, and the state has consistently ranked among the top states nationwide for new business applications in recent years. Small businesses make up the overwhelming majority of California employers and account for a substantial share of the state's private-sector jobs. That density of customers, vendors, and capital is a real advantage for a new LLC — it just comes bundled with California's higher compliance and tax bar.
Step-by-Step: How to Form an LLC in California
Forming an LLC in California follows a fairly standard sequence, with a few state-specific requirements layered in along the way.
Search and reserve your LLC name
Your name has to be distinguishable from every other entity already on file with the California Secretary of State, and it must include "Limited Liability Company," "LLC," or "L.L.C." — abbreviations like "Ltd." aren't accepted. You can search existing names through the Secretary of State's business search tool, and reserve a name for a fee if you're not ready to file yet.
Choose a California registered agent
Every California LLC needs a registered agent with a physical California street address (P.O. boxes don't qualify) to accept legal mail and state notices on the LLC's behalf. See our California registered agent guide for what the role requires and how CompanySage's registered agent service works.
File the Articles of Organization
This is the document that actually creates your LLC. It's filed with the California Secretary of State, typically through the state's online bizfile portal, and it sets your LLC's name, principal address, and registered agent on the public record.
Adopt an operating agreement
California is one of the few states that legally requires every LLC to have an operating agreement. It doesn't get filed with the state, but you'll need it the first time a bank, title company, or investor asks who has authority to act for the LLC. See how a CompanySage operating agreement works.
Get an EIN from the IRS
An Employer Identification Number is free directly from the IRS and required to open a business bank account, hire employees, and file most business tax returns. Our EIN guide walks through the application.
File your initial Statement of Information
California requires new LLCs to file an initial Statement of Information within 90 days of formation, reporting your registered agent, principal office, and management structure.
Check local licenses and register for state taxes
California has no single statewide business license, but most cities and counties require a local business license or tax certificate, and certain industries need state-level professional licenses. You'll also register with California's tax agencies if you'll owe sales tax or have employees.
California LLC Formation Costs
Here's the full picture of what California charges directly, separate from anything a formation service bills you.
| Item | California Fee | Notes |
|---|---|---|
| Articles of Organization | $70 | Filed with the CA Secretary of State to form the LLC |
| Statement of Information (initial) | $20 | Due within 90 days of formation; $250 penalty if missed |
| Statement of Information (biennial) | $20 | Refiled every two years in your formation month |
| Annual franchise tax | $800 minimum | Franchise Tax Board; waived year one for LLCs formed after Jan. 1, 2021 |
| LLC fee on gross receipts over $250,000 | $900–$11,790 | Tiered by revenue; separate from the flat franchise tax |
| Fictitious Business Name (DBA), if used | Varies by county | Filed at the county level, not with the state |
CompanySage formation packages start at $99 plus state fees, and every tier includes the state filing itself, an attorney-designed operating agreement, and a resolution to open a business bank account — see full CompanySage pricing for the complete breakdown by tier.
Timeline and Expedited Filing
California's Secretary of State processes most online Articles of Organization filings within a matter of business days under normal volume, though published processing times can stretch to several weeks during peak filing periods. The state also sells its own expedited tiers for founders who need to move faster and are willing to pay an added state fee on top of the base $70.
CompanySage takes a different approach: 24-hour filing is included on every formation package at no extra cost — there's no separate rush fee to unlock a faster turnaround. Learn more about same-day LLC formation with CompanySage.
Ongoing Compliance for Your California LLC
Forming the LLC is the easy part; staying compliant in California takes more attention than in most states. Three recurring obligations matter most:
- Statement of Information: refiled every two years in the same calendar month your LLC was formed, for a $20 fee. Miss it and California adds an automatic $250 penalty.
- Annual franchise tax: $800 minimum, paid to the Franchise Tax Board, generally due by April 15 for calendar-year LLCs starting in your second taxable year. Unpaid balances accrue a penalty plus monthly interest.
- LLC fee on higher revenue: if your California gross income exceeds $250,000 in a year, an additional tiered fee applies on top of the flat franchise tax.
Falling behind on any of these can lead to the Franchise Tax Board suspending your LLC — which blocks it from doing business or defending itself in court until you're reinstated. A CompanySage compliance plan, starting at $14.99/month, keeps registered agent service and annual filing reminders in one place so these dates don't slip. Attorney access is available as an add-on for an additional fee if a compliance question needs a legal opinion. For a broader look at getting started, see our guide to how to form an LLC, and our registered agent overview.
Forming elsewhere for a business that actually operates in California doesn't avoid these rules — California's doing-business standard applies the $800 franchise tax to out-of-state LLCs doing business here too. If you're weighing California against another state, our guides to forming an LLC in Texas and forming an LLC in Florida cover two of the more common comparisons.
Frequently Asked Questions
How much does it cost to form an LLC in California?
The California Secretary of State charges $70 to file the Articles of Organization (Form LLC-1). Add the $20 Statement of Information (Form LLC-12) due within 90 days, and most owners land in the low hundreds once a registered agent and an operating agreement are factored in. The bigger number to plan around is the $800 annual minimum franchise tax, which starts in your LLC's second taxable year.
Do I really owe an $800 franchise tax every year?
Yes, from year two onward. California LLCs formed after January 1, 2021 are exempt from the $800 minimum franchise tax in their first taxable year under Assembly Bill 85. After that, it's due annually to the Franchise Tax Board (FTB Form 3522), typically by April 15 for calendar-year LLCs, regardless of whether the LLC turned a profit. CompanySage formation packages start at $99 plus state fees; the $800 tax itself is paid directly to the FTB, not to CompanySage.
What is a Statement of Information, and when is it due?
It's California's version of an annual report, filed as Form LLC-12. New LLCs must file an initial Statement of Information within 90 days of formation, then file again every two years in the same calendar month the LLC was originally formed. The fee is $20. Missing the deadline triggers an automatic $250 penalty, so it's worth calendaring both dates the day you form.
Is an operating agreement required for a California LLC?
Yes. Unlike most states, California law requires every LLC to adopt a written or oral operating agreement under Corporations Code Section 17701.10. You don't file it with the state, but you do need it on hand — banks, title companies, and anyone reviewing management authority will ask for it. CompanySage includes an attorney-designed operating agreement with every formation package.
Can every business use a California LLC?
Most can, but not licensed professionals. Under Corporations Code Section 13401, California bars attorneys, physicians, accountants, architects, engineers, and similar state-licensed professions from operating as an LLC — they generally need a Professional Corporation instead. If you're not sure which structure applies to your license type, that's a good question to raise with an attorney before you file.
What happens if I miss California's franchise tax or Statement of Information deadline?
The Franchise Tax Board can suspend your LLC, which blocks it from doing business, filing documents, or defending itself in a lawsuit until it's reinstated. Unpaid franchise tax also accrues a penalty plus monthly interest, and a missed Statement of Information adds a flat $250 fee on top. Reinstatement means paying everything owed and filing the paperwork to restore your LLC's status — it's far cheaper to stay ahead of both dates.
How fast can I form an LLC in California?
Standard online filings with the Secretary of State are typically processed within a matter of business days, though the state has published processing times of several weeks during peak periods, and the state also offers paid expedite tiers for faster turnaround. CompanySage's 24-hour filing is included at no extra cost on every formation package, so you're not choosing between speed and price.
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