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Why Start an LLC in California?

The State of California offers a wide range of business incentives and tax credits to LLCs and other business entities that meet certain requirements. For example, the New Employment Credit offers tax credits to companies that hire qualified full-time employees within designated geographic areas.

For most people starting a business, a California limited liability company (LLC) is the easiest, fastest way to go. An ideal entity for startups and small- to medium-sized businesses, an LLC also gives you the advantages and protections of larger corporations, but with simpler rules and regulations.

If an LLC isn't the right entity for the type of business you're starting, you may want to consider forming a California Corporation instead.

Benefits of creating an LLC in California:

  • Protects your personal assets from business debts and liability

  • Easy tax filing and potential advantages for tax treatment

  • Simple filing, management, compliance, regulation and administration

  • $75 filing fee ($70 filing cost plus a $5 certified copy fee)

Learn more about the benefits of the LLC business structure.

This guide will provide you with the basics of how to start an LLC in California. It includes information about naming your business, getting a Registered Agent, taxes and much more. We’ll also go over what you need to file your LLC and how you'll work with the California Secretary of State.

Starting a Small Business in California Checklist

To help you along the way, use our Starting a Business checklist to keep track of everything you need to do to get your business up and running.

 

How to Start a California LLC Yourself in 6 Steps

1

Choose a Unique Business Name and Complete a State Business Search

You'll need an original and distinctive name for your LLC that no other business in the state is using. If you’re having difficulty thinking of a name, try using our Business Name Generator for ideas. You'll also need to follow some general and state naming rules, which you can read about in detail on our California Business Names page.

Once you’ve selected a name, you’ll need to make sure it’s available in California. To find out whether your desired name is already in use by another business, use our tool to do a California entity search. You can also perform a name search on the California Secretary of State website.

Allow us to search the California company registry for you

2

Provide an Official Address for Your LLC

Every California LLC must designate an official address, whether it's an office building, your home address (if you’re running the business out of your residence) or any other physical location. The address can be outside the state, but cannot be a P.O. Box.

You may also be able to use a virtual mailbox as a business address, whether you're in San Diego, Santa Barbara, or any location. Incfile can provide you with a California virtual mailbox, where we'll receive your mail and scan it for you to review online. This can be especially convenient if you run a home-based business and don't want your home address published as public record.

3

Assign an Agent for Service of Process

Most states require business entities to have a Registered Agent. In California, it’s called an Agent for Service of Process, but the purpose is the same. We’ll use these terms interchangeably.

A business entity’s agent receives official correspondence and is responsible for filing reports with the Secretary of State. Every California LLC is required to have an Agent for Service of Process. You'll appoint an Agent for Service of Process when you file your Articles of Organization.

You or another manager in the business can fill this position, or you can use an outside service. If your California Registered Agent is a person, they must reside and have a physical address in California and be at least 18 years old. They must also be available during business hours to receive documents on your behalf.

All of Incfile's business formation packages include Registered Agent service that's free for the first year and just $119 per year thereafter. You'll have access to a dashboard where you can view any documents we receive on your behalf.

4

File Your Articles of Organization with the California Secretary of State

Once you have all the information for your LLC, you'll create your Articles of Organization. California makes this easy with a form and attached instructions. Filing it with the Secretary of State officially creates your LLC.

Here’s what’s usually required on the form:

  • Your business name and address
  • Information about your Agent for Service of Process 
  • The company's management structure
  • Name of the organizer

Your California LLC Articles of Organization can be filed online on the Secretary of State website, mailed in, submitted in person or you can have Incfile file on your behalf for free. The state charges a $5 certification fee to register an LLC in California, along with the $70 filing fee.

File by Mail

Secretary of State
Business Entities Filings
P.O. Box 944260
Sacramento, CA 94244-2600

Submit in Person

1500 11th St.
Sacramento, CA 95814
(Open M–F 8 a.m.–5 p.m.)

Note: If you drop off your Articles of Organization in person, you’re required to pay a separate, non-refundable $15 handling fee. This also gives your paperwork priority over mail-in documents.

You only need to file your Articles of Organization in California once, but you'll be required to pay the California franchise tax (if applicable to your business) annually.

You'll also need to file a Statement of Information biennially 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.

Have Incfile Handle All the Paperwork for You for $0 + the California State Fee

What Are the California LLC Formation Fees and Requirements?

State Fee

$75*

State Filing Time

4 Weeks

Expedited Filing Time

3 Business Days

*The $75 filing fee includes a $70 state fee and a $5 certified copy fee

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.
(Incfile does not assist in the filing of the Franchise Tax Report)

5

Get an Employer Identification Number (EIN) from the Internal Revenue Service

You'll need an EIN to identify your business to the IRS. This number is used when you file and pay taxes, submit payroll information and payments for your employees or open a business bank account. You can obtain one directly from the IRS, or we can get one for you as part of the California LLC formation process.

6

Create an Operating Agreement

A kind of "instruction manual" that details how you'll run your business, an LLC Operating Agreement outlines how the business is set up among members, how business decisions will be made and what will happen if a member leaves the company.

In California, you are legally required to have an LLC Operating Agreement in order to start your business.

Receive a personalized Operating Agreement when you select Incfile’s Gold or Platinum package

Other California LLC Types

Professional LLC

Some states allow certain occupations to form Professional Limited Liability Companies (PLLCs), usually when those occupations require licensing or certification. California does not recognize or allow PLLCs.

However, you may be able to form an LLC to offer certain professional services, provided you meet the requirements specified in Title 2.6, Article 1, §17701.04 of the California LLC Act:

"A domestic or foreign limited liability company may render services that may be lawfully rendered only pursuant to a license, certificate, or registration authorized by the Business and Professions Code, the Chiropractic Act, the Osteopathic Act, or the Yacht and Ship Brokers Act, if the applicable provisions of the Business and Professions Code, the Chiropractic Act, the Osteopathic Act, or the Yacht and Ship Brokers Act authorize a limited liability company or foreign limited liability company to hold that license, certificate, or registration."

If your professional services business doesn't meet those requirements, you may need to form a California corporation instead.

Series LLC

A specialized business entity that allows business owners to manage multiple LLCs under one master LLC is called a Series LLC (SLLC). California does not recognize or allow SLLCs.

However, an SLLC formed in another state may do business in California, provided the business registers with the California Secretary of State and meets all filing requirements.

Foreign LLC

If your business operates in another state and you want to expand into California — or vice versa — you’ll need to form a Foreign LLC.

Learn more about California Foreign LLC registration.

Helpful Resources from the State of California

More Information in This Guide

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

California Business Names

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

California Registered Agents

How to appoint, change and search for Agents for Service of Process. Also includes the duties they fulfill and the rules they’re required to follow.

California LLC Filing Requirements

Explains various fees you’ll need to pay and the state and federal requirements you’ll need to meet. Includes details about Employer Identification Numbers (EINs), state and federal business licenses, Statements of Information and more.

California Business Taxes

Details various taxes you’ll have to pay to the state and federal governments. Includes information about state taxes, such as sales and franchise, and federal taxes, such as income and self-employment.

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