Fees
California LLC formation costs
$70 to form + $800 minimum franchise tax (year 1, due by 15th day of 4th month) + $20 Statement of Information = ~$890 first-year cost (before registered agent service)
| Fee | Amount | Notes |
|---|---|---|
| Articles of Organization filing fee | $70 | One-time state filing fee payable to the California Secretary of State through BizFile Online. Standard processing is approximately 5–10 business days; expedited options are available. |
| $800 minimum franchise tax (annual, Year 1 and every year) | $800/year | Paid to the California Franchise Tax Board (not the SOS) via Form LLC-FTB-3522. Due by the 15th day of the 4th month after formation for the first year (e.g., an LLC formed January 20 owes the $800 by May 15). For subsequent calendar years, due April 15. The first-year exemption that applied to LLCs formed January 1, 2021 through December 31, 2023 expired — all LLCs formed on or after January 1, 2024 owe $800 in year 1. This tax is owed even if the LLC has no income or is inactive. |
| Statement of Information (Form LLC-12) | $20 every 2 years | Due within 90 days of formation (first filing), then every two years during the applicable filing window. Filed with the CA SOS. $250 penalty for failure to file. Also used to update the LLC's address, registered agent, and management information on the public CA SOS record. |
| Annual gross receipts fee (in addition to $800 minimum) | $0 under $250K; up to $11,790 for $5M+ | LLCs with California gross receipts of $250,000+ owe an additional annual fee: $900 ($250K–$499,999), $2,500 ($500K–$999,999), $6,000 ($1M–$4,999,999), $11,790 ($5M+). Paid via Form FTB-3536 (estimated fee, due June 15) and FTB-568 (annual return). This is separate from and in addition to the $800 minimum. |
| SF Business Registration + SF Gross Receipts Tax (local, annual) | Varies by gross receipts and business activity | San Francisco requires a Business Registration Certificate (annual, $75–$35,000+ depending on gross receipts) and imposes the SF Gross Receipts Tax (SFGRT) based on SF-sourced gross receipts. Rates vary by industry (typically 0.1%–1.0% of SF gross receipts). Low-revenue businesses ($2M or less) may qualify for the small business exemption. San Francisco's local business tax regime is among the most complex in California — consult a CA tax professional for full exposure. |
| Name reservation (optional) | $10 | CA SOS Form NR-1 reserves a name for 60 days. Most filers skip this and file the Articles of Organization directly once name availability is confirmed online. |
| EIN application | Free | IRS Form SS-4 — free online at irs.gov/ein. No state fee. |
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LLC formation services — Bizee primary placement.
Requirements
What you need to know before filing
- Name must contain 'LLC', 'L.L.C.', or 'Limited Liability Company' — California does not accept 'Limited Company', 'LC', or 'L.C.' as LLC designators.
- A registered agent (Agent for Service of Process) with a California street address must be named in the Articles of Organization. The registered agent cannot be the LLC itself and must consent to serve.
- Articles of Organization (Form LLC-1) are filed with the California Secretary of State online through the BizFile portal.
- Statement of Information (Form LLC-12) must be filed within 90 days of formation and every two years thereafter ($20 fee). Failure to file triggers a $250 penalty and eventual suspension.
- The $800 minimum franchise tax is due to the California Franchise Tax Board every year the LLC exists, including the year of formation. As of January 1, 2024, the first-year exemption that previously applied to LLCs formed between 2021–2023 has expired — all new LLCs owe $800 in their first year. The first payment (Form LLC-FTB-3522) is due by the 15th day of the 4th month after the LLC's formation date.
- LLCs with California gross receipts of $250,000 or more also owe an additional annual gross-receipts-based fee on top of the $800 minimum (Form FTB-3536). See the fee tier table in the fees section.
- An Operating Agreement is required by California Corporations Code § 17701.10 (internally, not filed with the state) and governs member rights, profit/loss allocation, and dissolution.
- California LLCs classified as disregarded entities (single-member, not elect-corp treatment) must nonetheless file a California LLC return (FTB-568) and pay the franchise tax and applicable fees.
- EIN (Employer Identification Number) from the IRS is required to open a business bank account and for federal and CA tax filings.
- San Francisco imposes a local gross-receipts-based business tax (SF Business Registration + SFBT) that applies to businesses operating in the City and County of San Francisco — separate from and in addition to state LLC obligations. This is one of the highest local business tax regimes in California.
- Foreign LLCs (formed in another state but operating in CA) must file a Registration Statement with the CA SOS and pay the $800 minimum franchise tax and any applicable gross receipts fees.
Documents
What you'll need to file
- Articles of Organization (Form LLC-1) — filed with the CA Secretary of State via BizFile Online. Requires LLC name, street address of principal office in CA, name and CA address of registered agent, management structure (member-managed vs. manager-managed), and organizer signature.
- Statement of Information (Form LLC-12) — filed within 90 days of formation and every two years thereafter. Requires LLC name, SOS file number, principal office address, mailing address, registered agent, and management information. $20 filing fee.
- Operating Agreement — California Corporations Code § 17701.10 requires every CA LLC to have an Operating Agreement (not filed with the state). Governs membership interests, voting, profit/loss allocation, and dissolution. Should be executed by all members before or at formation.
- Form LLC-FTB-3522 (LLC Tax Voucher) — used to pay the $800 annual minimum franchise tax to the CA Franchise Tax Board. First payment due by the 15th day of the 4th month after formation. Subsequent payments due April 15 each year.
- Form FTB-3536 (Estimated Fee for LLCs) — required if estimated annual California gross receipts are $250,000 or more. Due by June 15 of the taxable year.
- Form FTB-568 (Limited Liability Company Return of Income) — annual CA LLC tax return due by the 15th day of the 4th month after the close of the LLC's tax year (April 15 for calendar-year LLCs).
- SF Business Registration application — filed with the City and County of San Francisco Office of the Treasurer and Tax Collector. Required for businesses operating in SF.
- IRS SS-4 (EIN Application) — completed online at irs.gov/ein after the Articles are filed.
- Business bank account documentation — EIN letter, Articles of Organization filing confirmation, and Operating Agreement.
Registered agent
Who receives legal mail for your LLC
Required in every state. Florida requires a physical FL street address.
- Required?
- Yes
- Who can serve
- California resident age 18+ with a CA street address, or a registered corporate agent (commercial RA service) authorized to do business in California
- Can I serve myself?
- Yes
- Commercial RA cost
- ~$125/yr
Serving as your own registered agent places your personal or office address on the public CA SOS BizFile record, indexed by search engines. San Francisco founders in shared offices or home offices typically use a commercial RA service ($50–$150/yr) to preserve privacy and ensure legal mail is never missed.
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Need a registered agent?
Commercial RA service — Northwest Registered Agent placement.
Process
How to form a LLC in California
Sequential — each step gates the next.
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Check name availability on the CA SOS business name database Search the California Secretary of State's business name database at bizfileonline.sos.ca.gov to confirm your desired LLC name is available. The name must include 'LLC', 'L.L.C.', or 'Limited Liability Company' and must not be deceptively similar to an existing CA entity. Prohibited words include 'Bank', 'Trust', 'Insurance', and others. Optional: reserve for 60 days ($10).
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Designate a California registered agent (Agent for Service of Process) Every CA LLC must designate an Agent for Service of Process with a California street address (no PO boxes) who is available during normal business hours. You can serve as your own registered agent if you have a CA street address, but your address will appear on the public BizFile record. San Francisco founders typically use a commercial RA service ($50–$150/yr) to preserve privacy and avoid office disruption for legal mail.
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File Articles of Organization with the CA Secretary of State File Articles of Organization (Form LLC-1) online at bizfileonline.sos.ca.gov. Provide the LLC name, principal office street address in CA, registered agent name and CA address, management structure, and organizer signature. Pay the $70 filing fee by credit card. Online filings typically process in 5–10 business days; expedited options are available for faster turnaround.
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Pay the first $800 minimum franchise tax (FTB-3522) After filing the Articles of Organization, pay the $800 minimum franchise tax to the California Franchise Tax Board via Form LLC-FTB-3522 by the 15th day of the 4th month after formation. Register at ftb.ca.gov to set up your FTB account. The $800 is owed regardless of income — even an inactive LLC owes this in year 1. The first-year exemption that applied to 2021–2023 formations has expired as of January 1, 2024.
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File the Statement of Information within 90 days File Form LLC-12 (Statement of Information) with the CA SOS within 90 days of formation. Pay the $20 filing fee. Subsequent filings are due every two years during the applicable biennial filing window. A $250 penalty applies for failure to file on time, and continued non-filing leads to LLC suspension.
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Draft an Operating Agreement California Corporations Code § 17701.10 requires every CA LLC to have an Operating Agreement (retained internally, not filed with the state). The OA governs membership interests, voting rights, profit and loss allocation, member admission/exit rules, and dissolution procedures. San Francisco-based multi-member LLCs especially benefit from a detailed OA executed before any capital contributions or operational decisions.
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Obtain an EIN from the IRS After the Articles of Organization are approved, apply for an EIN at irs.gov/ein. The online application takes under 15 minutes and provides the EIN immediately. Print the EIN Confirmation Letter (CP 575) for bank account opening.
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Register with the CA Franchise Tax Board and set up FTB-568 annual return Register your LLC with the CA Franchise Tax Board at ftb.ca.gov. Annual CA LLC tax returns (Form FTB-568) are due April 15 for calendar-year LLCs. If California gross receipts are $250,000 or more, also file Form FTB-3536 to pay the estimated gross-receipts-based fee by June 15 of the taxable year. San Francisco-based LLCs with high gross receipts may owe both the state fee tier and SF's local gross receipts tax.
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Register for the San Francisco Business Registration Certificate and SF Gross Receipts Tax All businesses operating in the City and County of San Francisco must register with the SF Office of the Treasurer and Tax Collector to obtain a Business Registration Certificate (annual fee based on gross receipts). San Francisco also imposes the SF Gross Receipts Tax (SFGRT) based on SF-sourced gross receipts at rates that vary by industry. Businesses with $2M or less in SF gross receipts may qualify for the small business exemption. Register at sftreasurer.org. This is separate from the state LLC formation and state franchise tax obligations.
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Open a business bank account Bring your EIN Confirmation Letter, Articles of Organization filing confirmation, Statement of Information, and Operating Agreement to the bank. A separate business account is the single most important step in maintaining the LLC's liability shield.
Annual obligations
What your LLC owes every year
Year-2+ costs most formation guides omit.
| Obligation | Due date | Fee | Consequence if missed |
|---|---|---|---|
| $800 Minimum Franchise Tax (Form LLC-FTB-3522) | 15th day of 4th month after formation (year 1); April 15 each year thereafter | $800.00 | 5% per month penalty (max 25%) plus interest if not paid by due date. Continued non-payment results in LLC suspension by the CA FTB. |
| Statement of Information (Form LLC-12) | Within 90 days of formation; every 2 years thereafter | $20.00 | $250 penalty for failure to file. Continued non-filing leads to LLC suspension by the CA SOS. |
| Annual LLC Tax Return (Form FTB-568) | 15th day of 4th month after close of tax year (April 15 for calendar-year LLCs) | $0.00 | Penalties and interest for late or missing return. |
| Gross Receipts Fee (Form FTB-3536) — if applicable | June 15 of the taxable year (estimated payment) | $0.00 | Underpayment penalty if estimated fee is not paid by June 15. |
| SF Business Registration Certificate (local, annual) | Annual renewal; new businesses within 15 days of commencing operations in SF | $0.00 | Penalties and interest for late registration or renewal. Required for legal operation within San Francisco. |
Provenance
Statute basis & official sources
Last verified 2026-05-06.
California Corporations Code, Title 2.6 (Beverly-Killea Limited Liability Company Act, 2014), §§ 17701.01 et seq.; CA Rev. & Tax Code §§ 17941–17948 (LLC franchise tax and fees); SF Business and Tax Regulations Code (SF Gross Receipts Tax); IRS Rev. Rul. 77-137 and subsequent guidance on single-member LLC tax treatment.
Direct filing portal: https://bizfileonline.sos.ca.gov/
If you skip the LLC
- Operating as a sole proprietor with no LLC means unlimited personal liability — a business debt or lawsuit can reach your personal assets (home, savings, car).
- Without an LLC, the business name is not protected in California; another entity can register the same name and force a rebrand.
- Sole proprietors lose the flexibility to elect S-corp tax treatment (available to LLCs) once revenue justifies it, forfeiting potentially thousands annually in self-employment tax savings.
- Banks, payment processors, commercial landlords, and investor due diligence in San Francisco routinely require an EIN and formal business entity for account opening and contract execution.
- Failure to file the Statement of Information within 90 days triggers a $250 penalty and can result in LLC suspension by the CA SOS. A suspended LLC cannot conduct business, defend itself in court, or enforce contracts.
Official sources
- Llc sos.ca.gov
- bizfileonline.sos.ca.gov bizfileonline.sos.ca.gov
- Limited Liability Company ftb.ca.gov
- 2023 568 ftb.ca.gov
- Codes Displaysection leginfo.legislature.ca.gov
- Register Your Business sftreasurer.org
- Gross Receipts Tax Grt sftreasurer.org
- Llc Fee ftb.ca.gov
- Limited Liability Company Llc irs.gov
- Ein irs.gov
Formation context
Who should form in California?
- Recommended for
- California residents forming a business operating primarily in the Bay Area or SF; San Francisco-based technology, design, professional services, and startup founders; Founders in the SF startup ecosystem formalizing before taking on clients or investors
- Tax treatment (default)
- Pass-through by default at the federal level: single-member LLCs are disregarded entities (Schedule C); multi-member LLCs are partnerships (Form 1065). California imposes the $800 minimum franchise tax and gross-receipts-based fees on the LLC itself. San Francisco additionally imposes the local SF Gross Receipts Tax. Can elect S-corp treatment (Form 2553) once payroll justifies it.
If you live outside California but form here, you will likely need to register as a foreign LLC in your home state as well — paying both states' annual obligations. If you form outside California but operate in SF, you must register as a foreign LLC, pay the $800 CA minimum franchise tax, and comply with SF's local business registration requirements regardless of where the LLC was formed.
No publication requirement in California — unlike New York or Nebraska, you do not need to publish notice in a newspaper after filing.
FAQ
Common California (San Francisco) LLC formation questions
How much does it cost to form an LLC in California (San Francisco)?
State-level first-year costs total approximately $890: $70 for the Articles of Organization, $800 minimum franchise tax (due within the first few months of formation), and $20 for the Statement of Information. San Francisco adds a local Business Registration Certificate fee (varies by gross receipts) and SF Gross Receipts Tax obligations. The $800 annual minimum franchise tax applies even if the LLC has zero revenue and is inactive.
What is California's $800 minimum franchise tax, and do I owe it in year 1?
Every California LLC owes $800 to the Franchise Tax Board annually, regardless of income or activity. As of January 1, 2024, the first-year exemption that previously allowed 2021–2023 LLCs to skip the $800 in their first year has expired. New LLCs formed on or after January 1, 2024 must pay the $800 by the 15th day of the 4th month after the LLC's formation date (Form LLC-FTB-3522). Subsequent years: due April 15. Failure to pay triggers a penalty and eventual LLC suspension.
What is the San Francisco Gross Receipts Tax for LLCs?
San Francisco imposes a local Gross Receipts Tax (SFGRT) on businesses operating in SF, based on SF-sourced gross receipts. Rates vary by industry (generally 0.1%–1.0%). All SF businesses must also obtain and renew a Business Registration Certificate annually (fee based on gross receipts, minimum $75). Businesses with $2M or less in SF gross receipts may qualify for the small business exemption. The SFGRT is separate from California's state franchise tax and must be filed with the SF Office of the Treasurer and Tax Collector.
What is the California LLC gross receipts fee?
In addition to the $800 minimum franchise tax, California LLCs with gross receipts from California sources of $250,000 or more owe an annual gross-receipts-based fee: $900 ($250K–$499,999), $2,500 ($500K–$999,999), $6,000 ($1M–$4,999,999), $11,790 ($5M+). This state fee is paid via Form FTB-3536 (estimated payment, due June 15) and reconciled on the annual FTB-568 return. San Francisco LLCs above these thresholds owe both the state gross receipts fee and the local SF Gross Receipts Tax.
What is Form LLC-FTB-3522 and when is it due?
Form LLC-FTB-3522 is the LLC Tax Voucher used to pay the $800 annual minimum franchise tax to the California Franchise Tax Board. For an LLC's first taxable year, it is due by the 15th day of the 4th month after the LLC's formation date. For subsequent calendar-year LLCs, the $800 is due April 15. The form is filed with FTB — not the CA Secretary of State. Paying on time avoids a minimum tax delinquency penalty of 5% per month (max 25%) plus interest.
Should I form my LLC in California or Delaware?
For most small businesses operating in San Francisco, form in California. Delaware's advantages (Court of Chancery, investor familiarity) apply primarily to venture-backed startups. If you form in Delaware but operate in California, you must register as a foreign LLC in California, pay California's $800 minimum franchise tax anyway, plus Delaware's $300/yr Annual LLC Tax. For a typical San Francisco-based small business, forming in Delaware eliminates no California obligations and adds Delaware's $300/yr cost.
Does the San Francisco LLC formation differ from Los Angeles?
The state-level formation process and costs are identical: same $70 Articles of Organization fee, same $800 minimum franchise tax, same $20 Statement of Information. The key difference is the local tax regime: San Francisco imposes the SF Gross Receipts Tax and annual Business Registration Certificate fee, which can be significant for higher-revenue businesses. Los Angeles has its own Business Tax Registration Certificate and LA city business tax, but San Francisco's SFGRT is generally regarded as more complex and potentially higher-impact for professional services firms.
What is the Statement of Information requirement for a California LLC?
Every California LLC must file a Statement of Information (Form LLC-12) with the CA Secretary of State within 90 days of formation, then every two years during the applicable biennial filing window ($20 fee each time). The Statement updates the LLC's principal address, registered agent, and management information on the public BizFile record. Failure to file triggers a $250 penalty and, eventually, LLC suspension.
Not sure yet?
Should I form an LLC?
Still deciding between an LLC, sole proprietorship, S-Corp, or C-Corp? Our entity-type comparison breaks down formation cost, tax treatment, liability shield, and compliance complexity for all four structures side by side.
LLC vs S-Corp vs Sole Prop vs C-Corp — compare all four →Is a DBA enough?
DBA vs LLC — do you actually need a full LLC?
Already operating as a sole proprietor, or wondering whether a cheap county DBA filing ($10–$100) is enough instead of forming an LLC? A DBA lets you operate under a trade name — but provides zero liability protection. Our DBA vs LLC comparison breaks down exactly when a DBA is sufficient and when you need a state LLC filing.
DBA vs LLC — cost, liability shield & when to upgrade →After you file
Next steps after forming your LLC
Your Articles of Organization are filed — now make your LLC operational. Three actions every new LLC owner needs to take:
§ A Building permits in California / San Francisco
§ B Other states & comparisons
- TX vs. FL LLC Formation — Compare costs, fees & requirements→
- TX vs. DE LLC Formation — Compare costs, fees & requirements→
- FL vs. DE LLC Formation — Compare costs, fees & requirements→
- California LLC Formation — Los Angeles guide→
- Best Registered Agent Services — Compare Northwest, ZenBusiness, LegalZoom & Bizee→
- All states — LLC formation guides→
§ C Companion tools
Disclaimer: Informational only — not legal advice. LLC laws change; verify with a California business attorney or CPA before filing.