How to Form an LLC in California — 2026 Filing Guide

Required?

Yes

Who can serve

California resident individual age 18+ with a physical CA street address, or a registered California business entity (CSC, Northwest, etc.) with a CA street address

Can I serve myself?

Yes

Commercial RA cost

~$125/yr

Self-serving as RA places your home address on the public SOS record, accessible via BizFile Online searches and indexed by data brokers. Commercial RA services ($50–$150/yr) maintain your privacy and ensure service of process is never missed.

Renewing or switching? Compare standalone registered agent services — Northwest, Harbor Compliance, Registered Agents Inc., InCorp, and more.

1. Search for name availability on BizFile Online Use BizFile Online at bizfileonline.sos.ca.gov/search/business to confirm your desired LLC name is available. The name must include a valid LLC designator. California does not reserve names exclusively during the search — file promptly after confirming availability. Optional: reserve the name for 60 days ($10) while preparing documents.
2. Appoint a California registered agent Designate a registered agent with a physical California street address (no PO boxes) who is available during normal business hours. California residents with a CA street address may self-serve as RA, but this places your home address on the public SOS record. Commercial RA services ($50–$150/yr) maintain privacy and ensure legal mail is never missed.
3. File Articles of Organization (Form LLC-1) with the California SOS File online through BizFile Online ($70 fee). Provide: LLC name, principal place of business address, registered agent name and CA street address, and organizer signature. Standard online processing: 5–7 business days. Expedited processing is available for an additional fee.
4. File the Statement of Information (Form LLC-12) File Form LLC-12 with the California SOS within 90 days of formation ($20 fee). This updates your registered agent, principal address, and manager/member information. After the initial filing, the Statement of Information is due biennially (every 2 years). Failure to file triggers a $250 late fee and potential suspension.
5. Pay the $800 minimum franchise tax to the FTB Register with the California Franchise Tax Board and pay the $800 minimum franchise tax via FTB Form 3522. A first-year exemption may apply for LLCs formed on or after January 1, 2021 — verify current FTB guidance at ftb.ca.gov. Starting Year 2: $800/yr is mandatory regardless of income. Budget for this recurring cost before forming in California.
6. Draft an Operating Agreement Although not filed with the state, an Operating Agreement is essential for multi-member LLCs and strongly recommended for single-member LLCs. A minimal OA should address: membership percentages, voting rights, profit and loss allocation, member admission and exit rules, and dissolution procedure. California courts rely on the OA to determine member rights in disputes.
7. Obtain an EIN from the IRS After Articles 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.
8. Register with the CDTFA if selling taxable goods or services If your LLC will sell tangible personal property or taxable services in California, register for a seller's permit with the California Department of Tax and Fee Administration (CDTFA) at cdtfa.ca.gov. California's base sales tax rate is 7.25%; local district taxes can push the combined rate to 10.25% or higher in certain jurisdictions.
9. Open a business bank account Bring your EIN Confirmation Letter, Articles of Organization, Statement of Information, and Operating Agreement to the bank. A separate business account is the most important step to maintaining the LLC's liability shield and is required to keep business and personal finances separate for California tax purposes.

California Corporations Code § 17701 et seq. (Beverly-Killea Limited Liability Company Act); California Revenue and Taxation Code § 17941 et seq. (LLC franchise tax); IRS Rev. Rul. 77-137 on single-member LLC tax treatment.

Direct filing portal: https://bizfileonline.sos.ca.gov/

Formation context

Who should form in California?

Recommended for

California residents forming businesses operating primarily in CA — forming outside CA does not eliminate the franchise tax if you operate here; Tech startups, freelancers, consultants, and small business owners in the Bay Area, Los Angeles, San Diego, and Sacramento metro areas; Entrepreneurs who have confirmed the $800/yr franchise tax fits their business model and budget; Out-of-state investors or operators with genuine California nexus who cannot avoid CA registration

Tax treatment (default)

Pass-through by default: single-member LLCs are disregarded entities (Schedule C); multi-member LLCs are treated as partnerships (Form 1065). California imposes: (1) $800/yr minimum franchise tax on all LLCs regardless of income; (2) Additional LLC Fee on gross receipts above $250K; (3) California personal income tax (1%–13.3%) on members' pass-through income — the highest top marginal rate in the US. Can elect S-corp status (Form 2553) once payroll justifies it.

Forming in another state (Nevada, Wyoming, Delaware) does not eliminate California's franchise tax if your LLC conducts business in California. California's definition of 'doing business in California' is broad — physical presence, employees, property, or sales in CA can trigger the obligation. For businesses with genuine California operations, form in California directly rather than paying both CA foreign qualification fees AND another state's formation fees.

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 LLC formation questions

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.

Once your LLC clears ~$80K in annual net profit, an S-Corp election (IRS Form 2553) typically saves $5,000–$15,000/year in self-employment taxes by splitting owner income into a W-2 salary + tax-free distributions. The election is free — Form 2553 has no IRS filing fee. The key decision factors: your net income level, a defensible reasonable-compensation salary, and the 75-day Form 2553 filing window after LLC formation.

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.

Missing your annual report deadline triggers late fees and — if left long enough — administrative dissolution, which voids your LLC's liability shield until reinstated. Know your California deadline, fee, and the consequences of missing it.

Also see the LLC annual report requirements hub for state-by-state deadlines, fees, late penalties, and reinstatement rules.

If your LLC opens an office, hires employees, or regularly does business in another state, you must foreign-qualify there — or face fines, back taxes, and loss of standing to sue. Our foreign qualification guide covers when you need it, how to file a Certificate of Authority, and what it costs.

Your Articles of Organization are filed — now make your LLC operational. Four actions every new LLC owner needs to take:

Formation gets your LLC into existence; contracts, trademark protection, operating agreement review, and vendor-document review keep it usable. Compare subscription and per-document legal platforms before you rely on a template or pay a local attorney retainer.

Commingling personal and business funds is the #1 way LLC owners lose their liability shield. A separate business account — in your LLC's legal name, with your EIN — is the foundational act of corporate formality. Mercury, Novo, Bluevine, Relay, and Found open same-day with no monthly fees. Compare online banks vs. Chase and Bank of America.

How you pay yourself depends on your LLC's tax classification — not what you call the transfer. A disregarded single-member LLC pays via owner draw with SE tax on all net profit. An S-Corp-elected LLC splits income between a W-2 salary (FICA applies) and tax-free distributions. Getting this wrong triggers IRS audit risk and SE-tax errors.

Single-member LLCs file Schedule C with their personal Form 1040 (due April 15). Multi-member LLCs file Form 1065 by March 15. S-Corp-elected LLCs file Form 1120-S by March 15. Know your form, your deadline, and the common deductions — home office, vehicle, retirement contributions, and startup costs — before your first April filing.