Quick facts (what most people want to know first)
- Where to file: Online at California’s bizfile portal. Cost: $70 to file Articles of Organization.
- First 90 days: File your Statement of Information (separate from formation). Cost: $20.
- Annual state tax: Most California LLCs owe $800 each year (plus an additional LLC fee if California-source income is $250k+).
Step 1: Pick a compliant name and check availability
Your LLC name must be distinguishable in the state’s records and not misleading. Search the California Business Search to see what’s taken; you can also reserve a name for 60 days if you like.
Pro tip: California has formal naming rules (e.g., using “LLC” and avoiding restricted terms). If you need the fine print, review the Secretary of State’s name regulations and guidelines.
Step 2: Choose your registered agent
List a California street address (no P.O. boxes) where legal papers can be served. You can be your own agent or hire a service. (The state’s rules on records and “not misleading” names still apply.)
Step 3: File Articles of Organization (Form LLC-1)
File online through bizfileOnline.sos.ca.gov. The state filing fee is $70. You’ll enter your LLC name, business address, registered agent, and management structure (member-managed or manager-managed).
Step 4: Create an Operating Agreement
California doesn’t ask you to file it, but you should have one for members, managers, banks, and auditors. The SOS FAQ notes you don’t file Operating Agreements with the state—keep it with your records.
Step 5: Get an EIN (free)
Apply directly with the IRS—it’s instant and free online. Avoid third-party sites that charge.
Step 6: File your Initial Statement of Information (Form LLC-12)
Due within 90 days of formation (then every two years). File it online via BizFile. Fee: $20.
Step 7: Understand California taxes & fees for LLCs
- Annual LLC tax: $800 each year, due with FTB 3522 (first year’s payment is due by the 15th day of the 4th month after you file with SOS).
- LLC fee (gross receipts based): If California income is $250,000+, you owe an extra fee (currently $900, $2,500, $6,000, or $11,790 depending on brackets), generally paid with FTB 3536 by the 15th day of the 6th month.
Federal tax classification (disregarded entity, partnership, or electing corporate/S-corp treatment) affects federal/state income tax reporting but doesn’t change California’s $800 minimum or the LLC fee thresholds. See FTB’s LLC pages for specifics.
Step 8: Register for state accounts and local licenses (as needed)
- Selling tangible goods? Get a Seller’s Permit with the CDTFA (free) before you make retail sales.
- Hiring employees? Register for a payroll tax account with EDD e-Services for Business.
- City business license / permits: Use CalGold to find city-specific licenses and permits. (San Diego/OC cities require local registration.)
Step 9: Corporate Transparency Act / BOI note (2025)
Rules for Beneficial Ownership Information (BOI) reporting changed in 2025. Treasury/FinCEN issued actions that removed or modified BOI reporting for most domestic companies, while aspects for foreign companies and certain transactions remain. Because this area is in flux, check FinCEN’s site and the Federal Register before acting.
Step 10: Open your business bank account & bookkeeping
Bring your filed Articles, EIN letter, and Operating Agreement. Set up clean books from day one so tax time (and lending) is easy.
Timeline & budget (typical)
- Day 0–1: Name check; file Articles online ($70).
- Within 1–3 days to a couple weeks: Articles approved (online filing is fastest). Then get your EIN (free).
- Within 90 days: File Statement of Information ($20).
- Month 4 (first year): Pay $800 LLC tax (FTB 3522). Month 6 (if applicable): Pay LLC fee (FTB 3536).
Common mistakes to avoid
- Filing Articles but forgetting the 90-day Statement of Information (it’s a separate filing).
- Paying for an EIN on a non-IRS site (it’s free at IRS.gov).
- Missing the $800 payment window or the LLC fee estimate deadline if your revenue grows.