A California Limited Liability Company (LLC) offers personal asset protection from business debts and liabilities, while providing flexible tax treatment and simplified operational requirements. Under the California Revised Uniform Limited Liability Company Act (RULLCA), LLCs combine the liability protection of corporations with the tax advantages and operational flexibility of partnerships.
California offers significant business advantages for LLC formation, including access to the nation's largest state economy and consumer market. LLCs can have one or more members, operate under either member-managed or manager-managed structures, and pursue virtually any lawful business purpose. However, certain licensed professions, including law, medicine, and accounting, are required to form Professional Limited Liability Companies (PLLCs) or other specialized entity types.
California keeps the must-haves simple, but each comes with strict rules. You need a compliant name, registered agent, Articles of Organization, and an Operating Agreement. Everything else is optional, depending on your schedule and risk comfort level.
After handling these basics, you can choose how fast you want your filing processed. Every method costs the same $70 base fee, but timing varies dramatically.
Meet these requirements and pay the fees, and you'll clear your first regulatory hurdle before that annual franchise tax kicks in.
Creating your California LLC takes five clear steps, each with specific deadlines. Follow this sequence to meet all legal requirements and avoid common mistakes.
First, pick a name that will pass the California Secretary of State's screening. It must stand out from all other active businesses and can't mislead people about what you do. You must add "LLC," "L.L.C.," or "Limited Liability Company" at the end.
Check the Secretary of State's business portal to see if your name is available, but also search trademarks to avoid legal headaches later. California restricts words like "bank" and "trust" unless you're actually authorized for those activities, although these rules come from financial regulators, not the Secretary of State.
Found the perfect name but not ready to file? Reserve it for 60 days with a Name Reservation Request and a small fee.
Every California LLC is required to have a registered agent with a physical California street address (no P.O. boxes or UPS Store suite numbers are permitted). This person or company must be available during business hours to accept legal documents and tax notices.
You can name yourself, but consider this: if you're unavailable when a process server arrives, you could miss crucial paperwork and face a default judgment. If you fail to maintain a reliable agent, you'll face state penalties and possibly lose good standing.
Professional registered agent services eliminate these worries and keep your personal address off public records. When something important arrives, they scan and upload it immediately.
With your name and agent set, you're ready for the Articles of Organization (Form LLC-1). File online, by mail, or in person with the Secretary of State. Each method costs $70, with in-person filing adding a $15 counter fee.
The form is brief, but every field counts. Include your:
Most rejections happen because the name doesn't match the reservations, the registered agent's address is invalid, or the management section is incomplete.
State law requires every LLC (even single-member companies) to have an operating agreement, though it doesn't have to be written down. You don't file it with the state, but having a written version is essential if disputes or audits arise.
At minimum, spell out:
After the state approves your LLC, you still need a federal Employer Identification Number. The IRS issues EINs online for free, and you'll need one to open a bank account, hire staff, and file taxes.
Next, check city and county requirements: many areas require a general business license within 30 days, with fees ranging from $50 to several hundred dollars yearly. If you’re selling physical goods, you’ll also need a seller's permit. On the other hand, service businesses may need professional or environmental permits depending on the industry.
The LLC filing doesn't handle these local requirements, so add them to your checklist. Complete these final tasks to move from filed to fully operational without surprises when tax season arrives.
Forming your LLC is just the beginning. Keeping your liability protection intact means following California's ongoing compliance checklist every year.
Your first deadline comes quickly. Submit the Initial Statement of Information (Form LLC-12) within 90 days of formation, then every two years after. It costs just $20, but missing it triggers a $250 penalty and marks your company as delinquent in public records.
Beyond these filings, staying compliant requires attention to:
Stay on top of these requirements and your LLC maintains its good standing, credit status, and liability protection, letting you focus on your business instead of scrambling to fix avoidable compliance problems.
How long does it take to form an LLC in California?
Online filings typically take five to seven business days, though busy periods slow things down. Expedited service gets you 24-hour or same-day processing, but adds hundreds to the $70 filing fee. Paper submissions take longer since electronic filings get priority.
Can non-residents form an LLC here?
Yes. You can register from anywhere, but you need a qualifying California registered agent and must meet all the same tax and filing obligations as residents.
Can I be my own registered agent in California?
Yes, if you're at least 18, have a physical California address, and can reliably receive documents during business hours.
Do I need an attorney to form an LLC?
California doesn't require one, but attorneys prove valuable with multiple owners, investors, or complex IP issues. Simple single-member LLCs often handle the process themselves, bringing in legal help for specific reviews.
Do I owe the annual franchise tax if my LLC makes no money?
Yes. California charges the minimum franchise tax on every LLC "doing business" in the state, regardless of whether it is profitable or not.
California's LLC formation involves multiple filings, including Articles of Organization, a Statement of Information, and immediate franchise tax obligations, all with strict deadlines and penalties.
Discern handles all required filings and ensures compliance from day one. Ready to form your California LLC without the compliance headaches? Book a demo with Discern today.
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