Forming an California LLC

(2025 Guide)

2025 LLC Guide

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How to Start an LLC in California 2025 Step-by-Step Guide

Discover how to start an LLC in California, our step-by-step guide. Learn the essential requirements and process to form your business today.

To establish an LLC in California, you need to file the Articles of Organization with the California Secretary of State. The filing fee is $70, and the approval process takes around 8 days.

Here’s a step-by-step guide:
– Pick an LLC Name
– Choose a Registered Agent
– File Articles of Organization
– Draft an Operating Agreement
– Obtain an EIN
– Submit a Statement of Information
– Pay the $800 Annual Franchise Tax & Estimated Fee

If you prefer to handle the LLC formation on your own, follow our complimentary guide below. Alternatively, if you’d like professional assistance, we suggest hiring Northwest Registered Agent.

(We recommend Northwest. After reviewing top companies in the field, Northwest is our top choice for affordability, customer service, and privacy.)

Need to save time?

Form your LLC with Northwest ($39 + state fee) or LegalZoom ($149 + state fee).

(See why Northwest is #1: Northwest vs LegalZoom.)

How much does it cost to form an LLC in California?

The initial cost is $70. Then, there’s a $820 cost every two years.

What are these fees for? The $70 fee is for submitting the Articles of Organization, which officially forms your LLC. The $20 biennial fee covers your Statement of Information, a required filing to maintain your LLC’s status. The $800 annual fee is the Annual Franchise Tax, a mandatory charge for operating in California. For more details on LLC costs, visit LLC Costs in California.

How long does it take to form an LLC in California?

Filing by mail will get your LLC approved in 8 business days, plus mail time. Online filings are also approved within 8 business days. Check How long does it take to get an LLC in California for possible delays.

Here are the steps to forming an LLC in California

1. Search Your LLC Name

Begin by checking the availability of your desired LLC name in the state. It’s essential because California prohibits two businesses from sharing the same name.

Start by searching your business name and compare it against existing businesses in the state. Use the Business Entities Search to ensure your chosen LLC name is distinct. It’s also important to familiarize yourself with the state’s naming rules to guarantee approval. Detailed information can be found here: California LLC Name.

Note: 

Most people choose “LLC”.

2. Choose a Registered Agent

The next step involves selecting a California Registered Agent. A Registered Agent is an individual or company responsible for receiving legal mail and state notices for your Limited Liability Company.

You have three options for selecting a Registered Agent:

– You
– A friend or family member
– A Registered Agent Service

California law mandates that your LLC’s Registered Agent must have a physical street address in the state; PO Boxes are not permitted. The name and address of the Registered Agent will be publicly recorded. If you lack a California address or prefer increased privacy, consider hiring a Registered Agent Service for your LLC.

We recommend Northwest Registered Agent. One of Northwest’s best features is allowing you to use their office address for your LLC filings, helping keep your address private. They also scan and upload any mail sent to your LLC to your online account. Northwest is known for outstanding customer service, and we trust them as our own Registered Agent.

Special offer: 

Form your LLC with Northwest for $39 + state fee and get a free year of Registered Agent service.

(Read our Northwest Registered Agent review.)

3. Submit Articles of Organization to the Secretary of State

To establish an LLC, you must submit the Articles of Organization form. This is done through the California Secretary of State.

Filing the Articles of Organization online costs $70, which is a one-time fee for creating your LLC. If you prefer to handle this process yourself, refer to our step-by-step guide: California Articles of Organization. Alternatively, you can hire a company to manage this for you. Looking to save time? Consider hiring a company like Northwest ($39 + state fee) or LegalZoom ($149 + state fee). (Find out why Northwest is rated #1 in Northwest vs LegalZoom)

Need to save time? 

Form your LLC with Northwest ($39 + state fee) or LegalZoom ($149 + state fee).

(See why Northwest is #1: Northwest vs LegalZoom.)

4. Draft an Operating Agreement

An Operating Agreement complements the Articles of Organization. While the Articles of Organization officially form your LLC, the Operating Agreement outlines the ownership structure.

Some financial institutions also require an Operating Agreement to open an LLC bank account. Additionally, this document can be invaluable if you ever need to resolve issues in court, as it demonstrates that your LLC is managed correctly. Therefore, we advise all LLCs to have an Operating Agreement, including Single-Member LLCs. This document is “internal,” meaning you don’t need to file it with the state or the IRS. Simply keep a copy with your business records. You can download a free template below and learn how to complete it by watching our detailed California Operating Agreement video.

Download a free LLC Operating Agreement:

Member-managed: Google Doc | Word | PDF
Manager-managed: Google Doc | Word

(What’s better? See Member-managed vs Manager-managed LLC)

5. Obtain an EIN for your LLC

The next step involves acquiring an EIN from the IRS for your LLC.

Note that an EIN is also known as a Federal Tax ID Number or Federal Employer Identification Number. This number is essential for:

– Identifying your LLC for tax purposes
– Opening a business bank account
– Applying for business licenses and permits

What’s the cost of an EIN? Obtaining an EIN from the IRS is entirely free.

How long does it take to receive an EIN? Applying online takes about 15 minutes. If you choose mail or fax, expect a wait of 1-3 months.

How can I apply for an EIN?

– US Citizens/US Residents: With an SSN or ITIN, you can apply online. Follow these instructions: Apply for an EIN online.
– Non-US Residents: Online applications aren’t available, but you can still apply by fax or mail. Follow these instructions: How to get an EIN without an SSN or ITIN.

6. File your Statement of Information

All LLCs in California are required to file a “Statement of Information” (Form LLC-12) biennially. This filing keeps your LLC in good standing with the state. Note: It can also be referred to as a Biennial Report.

How much does it cost? The filing fee for the Statement of Information is $20 every two years.

When is it due? Your initial Statement of Information is due within 90 days of your LLC’s approval. For instance, if your LLC was approved on May 15, 2025, it’s due by August 13, 2025. Subsequent filings are due every two years on your LLC’s Anniversary Date.

How do I file? You can file online or by mail. Online filing is recommended for ease. Follow our step-by-step guide here: California Statement of Information.

7. File your $800 Annual Franchise Tax & Estimated Fee

In California, all LLCs must pay the $800 Annual Franchise Tax annually, regardless of revenue or activity.

How much does it cost? The Annual Franchise Tax is $800 per year, paid to the California Franchise Tax Board, not the California Secretary of State.

When is it due? Your first report and payment are due 4.5 months after LLC approval, with the formation month counted as “month 1.” For example, if approved in May 2025, your report is due by August 15, 2025. Thereafter, it’s due annually by April 15th, starting the year after formation. Previously, the first payment was waived, but no longer. You can avoid consecutive payments by timing your LLC formation strategically.

How do I file? File the $800 Annual Franchise Tax with the California Franchise Tax Board. Filing can be done by mail or online. If by mail, include the payment voucher (Form 3522).

How much is the LLC Estimated Fee? If gross annual receipts exceed $250,000, file and pay an Estimated Fee using Form 3536. If not, Form 3536 isn’t required.

When is it due? The first Estimated Fee is due by the “15th day of the 6th month” post-approval. If approved in May 2025, May is “month 1,” making it due October 15, 2025. Subsequent fees are due by June 15th annually.

How do I file? Pay the Estimated Fee using Form 3536. For more details, refer to our guide: California LLC Annual Fee

What should I do after my LLC is approved?

Once your LLC is approved, there are a few additional steps you need to take.

Open an LLC business bank account:

It’s important to set up a business bank account for your LLC. This simplifies accounting and helps keep your business finances organized. Having a distinct business bank account also preserves your personal liability protection by keeping your business and personal finances separate.

Get business licenses and permits:

The good news is that California doesn’t require a state general business license. However, depending on the location of your LLC, you might need a local business license or permit. For instance, starting a daycare might require a business license from your city or county. More information is available on our California Business License page.

Pay taxes:

LLCs themselves do not pay federal taxes. Instead, the LLC Members pay taxes as part of their personal tax return. Here’s how your LLC will be taxed: A Single-Member LLC is taxed like a Sole Proprietorship, while a Multi-Member LLC is taxed like a Partnership. You also have the option to request the IRS to tax your LLC as a C-Corporation or S-Corporation.

Married Couples: In California, which is a community property state, married couples can choose to have their LLC taxed as a Single-Member LLC (also known as a Qualified Joint Venture) instead of as a Partnership. Besides federal income taxes, be aware of state and local income taxes, as well as sales tax. For more details about taxes in California, refer to our Tax Lesson.

Helpful Resources

How to Start an LLC in Arkansas FAQs

Can I start an LLC online in California?

Yes, you can establish an LLC online in California, with a filing fee of $70 for the Articles of Organization. Once you submit your LLC online, approval is typically granted within 8 business days.

A major advantage of an LLC is the protection of your personal assets. In the event of a lawsuit against your business, your personal assets, such as your home, vehicles, and bank accounts, remain safeguarded. This protection extends to all LLC owners, whether in a Single-Member LLC or a Multi-Member LLC. All members are shielded from the business’s debts and liabilities. This type of protection is not available for Sole Proprietorships or Partnerships, making Limited Liability Companies (LLCs) a more appealing business structure.

Additionally, LLCs benefit from pass-through taxation, meaning the LLC itself does not pay federal income taxes. Instead, profits are passed through to the LLC Members, who then report the income on their personal tax returns. California state taxes follow a similar approach, acknowledging the federal tax treatment of your LLC. For further details, see How are LLCs taxed.

This largely depends on your location and business operations. If you reside in or conduct business in California, it’s wise to establish your LLC there. While many sites highlight tax benefits of certain states, these do not apply if it’s not your state of residence or business.

For instance, if you create an LLC in Nevada but live and operate in California, you must register your Nevada LLC in California and pay additional fees, ultimately incurring California taxes. This results in higher costs and complications without benefits.

In short, if you live and operate in California, it’s a favorable state for starting a business. Otherwise, it may not be ideal.

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