Fees
California LLC formation costs
$70 state filing + $800/yr CA franchise tax (due year 1) + $34/yr San Diego Business Tax Certificate + $20 Statement of Information = ~$924 first-year cost (before registered agent service). Optional: San Diego County DBA (fictitious business name) if operating under a trade name.
| Fee | Amount | Notes |
|---|---|---|
| Articles of Organization (CA SOS) | $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 available. |
| CA $800 minimum franchise tax (annual, Year 1 and every year) | $800/year | Paid to the California Franchise Tax Board (FTB) via Form LLC-FTB-3522. Due by the 15th day of the 4th month after formation for the first year. Every year thereafter due April 15. 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, then every two years. Filed with the CA SOS. $250 penalty for failure to file. |
| City of San Diego Business Tax Certificate | $34/year | Required for businesses operating within the City of San Diego. The standard annual fee is $34 for most business types (some regulated categories may differ). Register and renew with the City of San Diego Treasurer's Office at sandiego.gov/treasurer. |
| San Diego County Fictitious Business Name (DBA) — if operating under trade name | Varies by filing type | Filed with the San Diego County Clerk's Office. Required if the LLC does business under any name other than its exact legal name. Must be published in a county-adjudicated newspaper for 4 consecutive weeks after filing. |
| Annual gross receipts fee (in addition to $800 minimum) | $0 under $250K; up to $11,790 for $5M+ | LLCs with CA gross receipts ≥ $250K owe an additional fee: $900 ($250K–$499,999), $2,500 ($500K–$999,999), $6,000 ($1M–$4,999,999), $11,790 ($5M+). Paid via Form FTB-3536 and FTB-568. |
| Name reservation (optional) | $10 | CA SOS Form NR-1 reserves a name for 60 days. Most filers skip this and proceed directly to filing the Articles of Organization. |
| EIN application | Free | IRS Form SS-4 — free online at irs.gov/ein. |
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 must be available during business hours and cannot be the LLC itself.
- Articles of Organization (Form LLC-1) are filed with the California Secretary of State online through the BizFile portal ($70 fee).
- 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.
- California's $800 minimum franchise tax is the #1 San Diego LLC cost surprise — it is owed every year the LLC exists, including year 1. The first payment (Form LLC-FTB-3522) is due by the 15th day of the 4th month after formation. It applies even if the LLC has zero revenue.
- City of San Diego Business Tax Certificate: businesses operating in the City of San Diego must obtain a Business Tax Certificate from the City Treasurer's Office. The annual fee is $34 for most businesses (some categories vary). Renewal is due annually.
- San Diego County Fictitious Business Name (DBA) filing: if the LLC operates under a name other than its exact legal name, a fictitious business name statement must be filed with the San Diego County Clerk's Office. The fee varies by registration type; the statement must be published in a county-adjudicated newspaper for 4 consecutive weeks.
- LLCs with California gross receipts of $250,000 or more owe an additional annual gross-receipts-based fee on top of the $800 minimum. Fees range from $900 to $11,790 depending on gross receipts tier.
- An Operating Agreement is not required to file with the state but is required by California law (Corporations Code § 17701.10). It governs membership interests, voting, profit/loss allocation, and dissolution.
- EIN from the IRS is required to open a business bank account and for federal and state tax filings.
- California LLCs selling taxable goods or services in San Diego must register with the California Department of Tax and Fee Administration (CDTFA) for a seller's permit. San Diego County may have additional local district taxes on top of the 7.25% state base rate.
Documents
What you'll need to file
- Articles of Organization (Form LLC-1) — filed online via BizFile at bizfileonline.sos.ca.gov. Requires LLC name, CA principal office address, registered agent name and CA address, management structure, and organizer signature.
- Statement of Information (Form LLC-12) — filed within 90 days of formation and every 2 years. $20 fee. Updates LLC address, RA, and management info on the public CA SOS record.
- Operating Agreement — not filed with the state; required by California law. Governs membership interests, voting rights, profit allocation, and dissolution.
- Form LLC-FTB-3522 (LLC Tax Voucher) — pays the $800 annual franchise tax to the CA Franchise Tax Board. First payment due 15th day of 4th month after formation.
- Form FTB-568 (Annual LLC Return of Income) — annual CA LLC tax return due April 15 for calendar-year LLCs.
- City of San Diego Business Tax Certificate application — required before conducting business in the City of San Diego. Filed at sandiego.gov/treasurer.
- San Diego County FBN (DBA) statement — required if operating under a trade name other than the LLC's legal name. Filed with the San Diego County Clerk.
Registered agent
Who receives legal mail for your LLC
Required in every state.
- Required?
- Yes
- Who can serve
- California resident age 18+ with a CA street address, or a registered corporate agent authorized to do business in California
- Can I serve myself?
- Yes
- Commercial RA cost
- ~$125/yr
Serving as your own registered agent places your home address on the public CA SOS BizFile record, indexed by search engines. Most San Diego founders use a commercial RA service ($50–$150/yr) to preserve privacy and ensure legal mail is handled reliably.
Renewing or switching? Compare standalone registered agent services — Northwest, Harbor Compliance, Registered Agents Inc., InCorp, and more.
Process
How to form a LLC in California
Sequential — each step gates the next.
-
Check name availability on the CA SOS BizFile database Search bizfileonline.sos.ca.gov to confirm your 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. Optional: reserve for 60 days ($10) via Form NR-1.
-
Designate a California registered agent Every CA LLC must designate an Agent for Service of Process with a California street address (no PO boxes) available during normal business hours. You can serve as your own RA if you have a CA street address, but your address will appear on the public BizFile record. Commercial RA services ($50–$150/yr) preserve privacy.
-
File Articles of Organization ($70) via BizFile Online File Form LLC-1 at bizfileonline.sos.ca.gov. You will need: LLC name, CA principal office address, registered agent name and CA address, management structure (member-managed or manager-managed), and organizer signature. Pay the $70 filing fee by credit card. Standard processing: 5–10 business days; expedited available.
-
Pay the $800 CA franchise tax (Form LLC-FTB-3522) After formation, 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. The $800 is owed even if the LLC has no income. This is California's most important ongoing LLC obligation.
-
File the Statement of Information within 90 days File Form LLC-12 with the CA SOS within 90 days of formation ($20 fee). Subsequent filings due every two years. A $250 penalty applies for late filing.
-
Register for a City of San Diego Business Tax Certificate Businesses operating within the City of San Diego must register with the City Treasurer's Office to obtain a Business Tax Certificate. The standard annual fee is $34 for most business types. Register online at sandiego.gov/treasurer. This is separate from and in addition to the state LLC formation with the CA SOS.
-
File San Diego County DBA (fictitious business name) if operating under a trade name If your LLC will do business under any name other than its exact legal name, file a Fictitious Business Name (FBN) statement with the San Diego County Clerk's Office. After filing, publish notice in a county-adjudicated newspaper for 4 consecutive weeks, then file an affidavit of publication with the County Clerk.
-
Draft an Operating Agreement California Corporations Code § 17701.10 requires every CA LLC to have an Operating Agreement (not filed with the state). The OA governs membership interests, voting rights, profit and loss allocation, member admission/exit, and dissolution.
-
Obtain an EIN from the IRS Apply for an EIN at irs.gov/ein. The online application takes under 15 minutes and provides the EIN immediately. Print the CP 575 EIN Confirmation Letter for bank account opening.
-
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 essential to maintaining the LLC's liability protection.
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 for late payment. Continued non-payment results in LLC suspension. |
| 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) | April 15 for calendar-year LLCs (15th day of 4th month after close of tax year) | $0.00 | Penalties and interest for late or missing return. Required even for LLCs with no California income. |
| City of San Diego Business Tax Certificate — annual renewal | Annual renewal | $34.00 | Operating without a valid Business Tax Certificate subjects the business to penalties and enforcement action by the City of San Diego Treasurer's Office. |
| Gross Receipts Fee (Form FTB-3536) — if applicable | June 15 of the taxable year (estimated payment) | $0.00 | Underpayment penalty if estimated fee not paid by June 15. Applies only if CA gross receipts ≥ $250K. |
Provenance
Statute basis & official sources
Last verified 2026-05-07.
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); San Diego Municipal Code § 31.0101 et seq. (city business tax); IRS Rev. Rul. 77-137 on single-member LLC tax treatment.
Direct filing portal: https://bizfileonline.sos.ca.gov/
If you skip the LLC
- Without an LLC, the business name is not protected in California; another entity can register the same name and force a rebrand. Check availability at https://bizfileonline.sos.ca.gov/search/business and, if available, reserve it for 60 days ($10) while you prepare formation paperwork.
- Sole proprietors forgo S-corp tax election, which can save thousands annually in self-employment taxes once revenue justifies it.
- Banks, payment processors, commercial landlords, and client procurement portals in San Diego 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 — a suspended LLC cannot conduct business or enforce contracts in California.
Formation context
Who should form in California?
- Recommended for
- San Diego-based founders in biotech, defense contracting, tourism, hospitality, and professional services; Freelancers and contractors formalizing San Diego businesses to separate personal liability; Small business owners who operate physically in the City of San Diego and need a Business Tax Certificate
- 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 at the LLC level plus gross-receipts-based fees for LLCs over $250K. Individual members pay CA personal income tax on their share of LLC income.
If you live outside California but operate in San Diego, you must register as a foreign LLC in California and owe the $800 minimum franchise tax regardless of your formation state. Form in the state where you actually do business.
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 Diego) LLC formation questions
How much does it cost to form an LLC in San Diego, CA?
Forming an LLC in San Diego costs approximately $924 in the first year: $70 for the California Articles of Organization, $800 for the mandatory CA franchise tax (due in year 1), $20 for the Statement of Information, and $34 for the City of San Diego Business Tax Certificate. If you operate under a trade name, add the San Diego County DBA filing fee. Commercial registered agent service adds $50–$150/yr. Annual ongoing cost after year 1: $800 franchise tax + $34 city BTC renewal (plus any gross receipts fees).
How does the San Diego Business Tax Certificate differ from the Los Angeles BTRC?
The San Diego Business Tax Certificate costs $34/year for most standard businesses, compared to approximately $95/year for the City of Los Angeles Business Tax Registration Certificate. Both are local business licenses required by their respective city governments and are separate from the state LLC formation. San Diego's lower annual fee is one of the cost differentiators between the two major California markets. Both cities require renewal based on their own annual schedules.
What is California's $800 minimum franchise tax, and when is it due?
Every California LLC owes a minimum $800/year franchise tax to the Franchise Tax Board, regardless of income, revenue, or activity. In year 1, it's due by the 15th day of the 4th month after the LLC's formation date (Form LLC-FTB-3522). In subsequent years, it's due April 15. Failure to pay triggers penalties of 5% per month (max 25%) plus interest, and ultimately LLC suspension.
Do I need a City of San Diego Business Tax Certificate?
Yes — any business operating within the City of San Diego must obtain a Business Tax Certificate from the City Treasurer's Office. The standard annual fee is $34 for most business types. The Business Tax Certificate is a local business license and is separate from the state LLC formation with the CA Secretary of State. Register online at sandiego.gov/treasurer.
What is a San Diego County DBA (fictitious business name) and when do I need one?
A San Diego County Fictitious Business Name (FBN) statement, commonly called a DBA ('doing business as'), is required when an LLC operates under any name other than its exact legal registered name. For example, if 'Jane Smith LLC' conducts business as 'SD Creative Studio', you must file an FBN with the San Diego County Clerk. After filing, you must publish notice in a county-adjudicated newspaper for 4 consecutive weeks and file an affidavit of publication.
What is California's LLC gross receipts fee?
In addition to the $800 minimum franchise tax, California LLCs with gross receipts from California sources of $250,000+ 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+). Paid via Form FTB-3536 (estimated payment by June 15) and reconciled on the annual FTB-568 return.
Should I form my San Diego LLC in California or Delaware?
For most small businesses operating in San Diego, form in California. Delaware's advantages (Court of Chancery, investor familiarity) matter primarily for venture-backed startups. If you form in Delaware but operate in California, you must register as a foreign LLC in California and pay California's $800 minimum franchise tax plus Delaware's fees — eliminating any cost advantage. For a San Diego-based operating business, California formation is almost always the right choice.
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 ($20 fee). The Statement updates the LLC's principal address, registered agent, and management info on the public BizFile record. Failure to file triggers a $250 penalty and eventual 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 →Reduce your tax bill
Should you elect S-Corp status for your California LLC?
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.
S-Corp election guide — $80K breakeven, Form 2553 deadline & reasonable salary →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 →Stay in good standing
Annual compliance for California LLCs
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.
California LLC annual report guide — deadlines, fees & administrative dissolution →Also see the LLC annual report requirements hub for state-by-state deadlines, fees, late penalties, and reinstatement rules.
Operating in another state?
Register your California LLC in a second state
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.
Foreign LLC qualification guide — Certificate of Authority & multi-state costs →After you file
Next steps after forming your LLC
Your Articles of Organization are filed — now make your LLC operational. Four actions every new LLC owner needs to take:
Legal resources
Online legal services for LLC owners
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.
LLC legal services comparison — contracts, trademarks, OA review & attorney access →Protect your liability shield
Open a business bank account for your California LLC
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.
Business bank account guide — Mercury, Novo, Bluevine & what documents to bring →Owner draws & payroll
How to pay yourself from your California LLC
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.
Pay-yourself guide — owner draws, quarterly taxes & S-Corp salary mechanics →April tax season prep
How your California LLC files taxes
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.
LLC tax filing guide — forms, deadlines, deductions & audit triggers →§ A Building permits in California / San Diego
§ B Other states & comparisons
- California LLC Formation — complete statewide guide→
- Los Angeles, CA LLC Formation — city-specific guide and fee table→
- California LLC Formation — San Francisco guide→
- CA vs. TX LLC Formation — franchise tax, no-income-tax comparison→
- Best Registered Agent Services — Compare Northwest, ZenBusiness, LegalZoom & Bizee→
- Real Estate LLC Guide — forming LLCs for rental property, per-property structure→
- Holding LLC Guide — parent LLC structure, multi-entity asset protection→
- Anonymous LLC Guide — privacy formation in WY/DE/NV/NM→
- BOI Report Filing Guide — US LLCs exempt since 2025; how foreign-registered companies file→
- Who Must File a BOI Report? — only foreign companies registered in a US state→
- BOI Report Deadlines — none for US LLCs; 30 days for foreign-registered companies→
- 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.