How to Start an LLC in California (Step-by-Step Guide)

Forming an LLC in California requires filing Articles of Organization with the California Secretary of State and paying a $70 filing fee. Be aware that California also charges an $800 annual franchise tax — one of the highest ongoing LLC costs in the country.

Follow these steps to start your California LLC in 2026.

How to Start an LLC in California (7 Steps)

Step 1: Name Your California LLC

Your LLC name must not be the same as or deceptively similar to any existing California entity. The name must end with “Limited Liability Company,” “LLC,” or “L.L.C.”

Search the California Secretary of State business search to check availability. You can reserve a name for 60 days for $10.

California naming rules:

• Cannot include “bank,” “trust,” “trustee,” “incorporated,” “Inc.,” “corporation,” or “Corp.”
• Cannot imply the LLC is a government agency
• Must include an LLC designator

Step 2: Choose a Registered Agent

California calls this an “agent for service of process.” Your agent must have a physical California street address and be available during business hours.

Our recommendation: Northwest Registered Agent ($39/year) — handles formation for $39 + the $70 state fee.

Step 3: File Articles of Organization

File Form LLC-1 with the California Secretary of State. You can file online through bizfile Online or by mail.

Filing details:

• Filing fee: $70
• Processing time: 3-5 business days (online), 2-4 weeks (mail)

Information required:

• LLC name
• Business address
• Agent for service of process name and address
• Management structure (member-managed or manager-managed)
• Organizer signature

Step 4: File Statement of Information

Within 90 days of forming your LLC, file Form LLC-12 (Statement of Information) with the Secretary of State. Fee: $20. This form provides details about your LLC’s managers/members and agent for service of process.

After the initial filing, the Statement of Information must be filed every two years.

Step 5: Create an Operating Agreement

California is one of the few states that legally requires an operating agreement for all LLCs (California Revised Uniform LLC Act, Section 17701.10). It doesn’t need to be filed with the state, but you must have one.

Step 6: Get an EIN

Apply for a free EIN from the IRS. Takes about 15 minutes online.

Step 7: Pay the Franchise Tax

California charges an $800 annual franchise tax for all LLCs, due by the 15th day of the 4th month after your LLC is formed. After the first year, it’s due April 15 annually.

First-year exemption: LLCs formed in 2024 or later are exempt from the franchise tax in their first taxable year. This saves new LLC owners $800.

LLCs with gross income over $250,000 also owe an annual fee:

California LLC Costs

Total first-year cost: $70-$389 (with first-year franchise tax exemption). Ongoing annual cost: $800-$1,099+. See our full LLC costs by state guide.

California LLC Taxes

• Franchise tax: $800/year minimum (all LLCs, regardless of income)
• State income tax: California’s personal income tax rates range from 1% to 13.3%
• Annual LLC fee: Additional fee for LLCs with gross income over $250,000 (see table above)
• Sales tax: 7.25% state rate, plus local taxes up to 10.75% total
• Federal taxes: Standard pass-through taxation

Annual Requirements for California LLCs

• Franchise tax: $800 minimum, due April 15 annually
• Statement of Information: File Form LLC-12 every two years ($20)
• State tax return: File Form 568 (LLC Return of Income) annually
• Maintain an agent for service of process: Required at all times

Frequently Asked Questions

Why is California’s LLC so expensive?

The $800 annual franchise tax is the main cost driver. California charges this to all LLCs regardless of income. Combined with state income tax (up to 13.3%), California is one of the most expensive states for LLC owners. However, if you live and do business in California, you should still form your LLC there rather than another state.

Can I avoid the $800 franchise tax?

New LLCs formed in 2024 or later are exempt in their first taxable year. After that, the $800 is required annually as long as the LLC exists. The only way to stop it permanently is to dissolve your LLC.

Does California require an operating agreement?

Yes. California is one of the few states that legally requires all LLCs to have an operating agreement. While there’s no penalty for not having one, it’s mandatory under state law.

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

Online filing takes 3-5 business days. Mail filing takes 2-4 weeks. Expedited processing is available for an additional fee.

Start an LLC in Another State

Click your state below for a step-by-step formation guide with filing fees, requirements, and timelines.