Forming an LLC in California costs way more than the $70 filing fee most entrepreneurs expect. The state hits you with additional filings and taxes that repeat every year, even if your company never earns a penny.
Because these charges come from both the Secretary of State and the Franchise Tax Board, you're juggling multiple agencies and deadlines from day one. Aside from the initial filing fee, you also have to consider the Statement of Information (Form LLC-12), the $800 annual franchise tax, and registered agent fees. These unavoidable charges create one of the nation's most expensive baselines for LLCs.
Beyond the mandatory fees, California offers a lengthy menu of optional add-ons, some of which save you headaches and others that simply expedite the process. Before you reach for your credit card, weigh each extra against your actual needs. A solo founder may skip services that a venture capital operations team juggling dozens of entities considers essential.
Business attorneys typically bill around $260 per hour for entity structuring or bespoke operating agreements. Tax-focused CPAs often charge similar hourly rates. Their advice becomes priceless once you start projecting California's gross-receipts fee or multi-state tax exposure.
If you'd rather outsource the paperwork entirely, online formation companies charge yearly fees for automated filings and deadline tracking, among other compliance benefits.
Several state filings are elective but handy. Reserving your LLC name costs just $10 and locks it down for 60 days. If you're in a hurry, California offers premium processing: 24-hour service costs an additional $350, and same-day approval increases to $750. Those charges are in addition to the standard $70 filing fee, so fast-tracking every document can quickly double your start-up budget.
Operating under a trade name introduces its own bill. Counties set the price for DBA or fictitious business name registrations. Most fall between $26 and $75, and you will need to pay again if the name or ownership changes. Because every county publishes its own schedule, confirm the exact figure before advertising a new brand.
Industry-specific permits and local business licenses are outside the Secretary of State's purview. California's business portal lets you search requirements by ZIP code and business type. This prevents the common (and costly) mistake of overlooking a municipal health permit or professional certification.
Optional expenses can add strategic value, like faster filings, expert advice, brand flexibility, but they're only worth it if they solve a real problem for your specific LLC.
California's billing doesn't end after you file your Articles of Organization. The state's recurring fees and the penalties that follow if they are missed often catch new LLC owners off guard, who have focused only on the $70 formation fee. Budget for these line items every year or risk administrative dissolution:
Can I avoid California LLC fees by forming in another state?
Not if you actually operate here. The moment you want to "do business" in California (opening an office, hiring employees, or selling to residents), you must complete a California foreign corporation registration and still pay the $800 franchise tax plus all regular filings. Forming elsewhere only adds another state's fees on top.
Are there any hidden fees when forming an LLC in California?
Yes, and they blindside most founders. The $800 franchise tax is due annually, even if your company generates no revenue. Cross $250,000 in California-sourced gross receipts and you'll owe an additional LLC fee of $900–$11,790. Most cities add business license renewals that typically run $50–$100. These costs surprise entrepreneurs who budget only for the $70 filing fee.
Can I get refunds if my filing is rejected?
No. California keeps the $70 filing fee even if your paperwork gets returned for corrections, but if you resubmit the corrected paperwork within 30 days, you do not have to pay the $70 filing fee again. Names, signatures, and addresses must match state requirements to avoid an expensive do-over.
Is the $800 annual franchise tax really required for all LLCs?
Yes. For tax years beginning in 2024 and beyond, the first-year reprieve expired, so every newly formed LLC owes the tax by its first deadline. Only narrow exemptions, like certain nonprofit conversions, apply.
When is the $800 franchise tax due for a new LLC?
Your first payment lands on the 15th day of the fourth month after filing Articles. Form in January, pay by May 15. Subsequent years require payment by April 15. Missing the deadline triggers penalties and interest under Form 3522 requirements.
California's LLC formation involves multiple fees beyond the $70 filing fee, including the $800 annual franchise tax, Statement of Information requirements, and registered agent costs that catch many founders off guard.
Discern helps you form your California LLC with automated filings, transparent pricing and ongoing compliance services. Ready to form your California LLC without the cost complexity? Try Discern today.
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