Forming an LLC in California costs $70 to file Articles of Organization with the Secretary of State (Form LLC-1), plus an $800 annual minimum franchise tax owed to the Franchise Tax Board starting the LLC's first tax year. Within 90 days of formation you must also file an initial Statement of Information (Form LLC-12, $20), which is refiled every two years. Filing is done online through bizfileOnline.sos.ca.gov, typically processed same-day. California LLCs also owe an additional gross receipts fee (from $900 to $11,790) once total California income exceeds $250,000 in a tax year.
| Governing law | Cal. Corp. Code §§ 17701.01 – 17713.13 (California Revised Uniform Limited Liability Company Act) |
|---|---|
| Filing agency | California Secretary of State (bizfileOnline) |
| Formation document | Articles of Organization — Form LLC-1 |
| Filing fee | $70 |
| Statement of Information | $20 within 90 days of formation, then every 2 years (Form LLC-12) |
| Annual franchise tax | $800 — owed to the Franchise Tax Board every tax year |
| Gross receipts fee | Additional $900–$11,790 tiered fee once CA income exceeds $250,000 |
| Name requirement | Must contain "Limited Liability Company" or an abbreviation (LLC, L.L.C.) |
| Registered agent | Required — must be a California resident individual or a registered corporate agent |
| Processing time | Online: same-day to 1 business day. Mail: 5–10 business days (subject to backlog) |
| Foreign LLC registration | $70 (Form LLC-5) |
What a California LLC is
A California Limited Liability Company (LLC) is a business entity that combines the limited-liability protection of a corporation with the pass-through taxation flexibility of a partnership. LLCs are formed under the California Revised Uniform Limited Liability Company Act (RULLCA), codified at Cal. Corp. Code §§ 17701.01 to 17713.13.
Key characteristics:
- Limited liability: members are generally not personally liable for LLC debts and obligations.
- Pass-through taxation by default: LLCs are treated as partnerships (multi-member) or disregarded entities (single-member) for federal tax purposes unless they elect corporate taxation.
- Flexible management: can be member-managed or manager-managed.
- Perpetual existence: LLC continues to exist regardless of changes in membership.
Full cost breakdown
California LLC costs in Year 1 are higher than most other states because of the $800 minimum franchise tax:
| Fee | Amount | When due |
|---|---|---|
| Articles of Organization (Form LLC-1) | $70 | At formation |
| Initial Statement of Information (Form LLC-12) | $20 | Within 90 days of formation |
| Annual minimum franchise tax | $800 | Every tax year |
| Biennial Statement of Information | $20 | Every 2 years |
| Registered agent (if using a service) | $50–$200/yr | Annually |
| Gross receipts fee (over $250K CA income) | $900–$11,790 | Every tax year based on income tier |
Verify current-year first-year tax rules. The California first-year $800 franchise tax was waived for LLCs formed 2021–2023 under AB 85; the waiver sunset for entities formed after that period. Confirm the current-year rule with the Franchise Tax Board or a California tax professional before filing.
Step-by-step: forming your California LLC
- Pick a name that meets California's name requirements (see below) and check availability on bizfileOnline.
- Choose an Agent for Service of Process (California's term for a registered agent).
- File Articles of Organization (Form LLC-1) with the Secretary of State — $70, online.
- Get an EIN from the IRS (free, applied for online).
- Draft an operating agreement — California doesn't require you to file it, but you must maintain one (Cal. Corp. Code § 17701.10).
- File the initial Statement of Information (Form LLC-12) within 90 days — $20.
- Register for state taxes with the Franchise Tax Board (FTB) and, if you'll collect sales tax, with the California Department of Tax and Fee Administration (CDTFA).
- Obtain local licenses and permits from your city and county — requirements vary widely.
- Pay the $800 minimum franchise tax as scheduled by the FTB.
Name requirements
Under Cal. Corp. Code § 17701.08, a California LLC name must:
- Contain the phrase "Limited Liability Company" or an abbreviation such as LLC or L.L.C. (the words "Limited" and "Company" may be abbreviated to "Ltd." and "Co." respectively).
- Be distinguishable in the Secretary of State's records from any existing California entity.
- Not contain words suggesting the LLC is a governmental agency (e.g., FBI, Treasury).
- Not use restricted words (bank, trust, insurance, etc.) without appropriate approval.
Name availability can be checked in the bizfileOnline business search tool. If you want to reserve a name before filing, use Form NRC (Name Reservation Request) — $10 for a 60-day reservation.
Registered agent (Agent for Service of Process)
Every California LLC must designate an Agent for Service of Process. This person or entity receives legal papers on behalf of the LLC. The agent must be either:
- An individual residing in California, or
- A corporation qualified under Cal. Corp. Code § 1505 to act as an agent (typically a commercial registered agent service).
The agent's name and California address must be listed in Articles of Organization and on every Statement of Information. Post office boxes are not acceptable — a physical California street address is required.
Filing Articles of Organization (Form LLC-1)
Articles of Organization are the formation document. Required fields:
- LLC name (matching name rules above).
- Business address (California street address).
- Agent for Service of Process (name and California street address).
- Management structure — member-managed or manager-managed.
- Signature of the organizer.
File online through bizfileOnline.sos.ca.gov ($70, typically processed same day). Paper filings by mail cost the same but processing takes considerably longer.
Operating agreement
California requires every LLC to have an operating agreement (written or oral) under Cal. Corp. Code § 17701.10. You don't file it with the state, but it should cover:
- Members and their ownership percentages.
- Capital contributions.
- Allocation of profits and losses.
- Distribution rules.
- Management structure and decision-making authority.
- Voting rights and procedures.
- Procedures for admitting new members or removing existing ones.
- Dissolution and wind-up procedures.
Without an operating agreement, the LLC is governed by the default rules in RULLCA — which may not reflect what the members intend.
Statement of Information (Form LLC-12)
Within 90 days of formation, and every two years thereafter, California LLCs must file a Statement of Information (Form LLC-12) with the Secretary of State. Filing fee: $20. Required information includes:
- LLC name and file number.
- Principal business address.
- Mailing address (if different).
- CEO name and address (if applicable).
- All manager names and addresses (or all members if member-managed).
- Agent for Service of Process.
- Description of principal business activity.
Late filing incurs a $250 penalty and can lead to suspension by the Secretary of State.
Annual $800 franchise tax
Every California LLC — whether or not it does business or earns income — owes an $800 minimum franchise tax to the Franchise Tax Board every year. Payment is generally due by the 15th day of the 4th month of the LLC's tax year (April 15 for calendar-year LLCs).
Payment is made through the FTB using Form 3522 (LLC Tax Voucher). Failure to pay results in penalties, interest, and eventual suspension of the LLC.
Gross receipts fee
In addition to the $800 minimum tax, California imposes a tiered gross receipts fee once total California income exceeds $250,000 in a tax year:
| Total California income | Fee |
|---|---|
| Under $250,000 | $0 (only $800 minimum tax) |
| $250,000 to $499,999 | $900 |
| $500,000 to $999,999 | $2,500 |
| $1,000,000 to $4,999,999 | $6,000 |
| $5,000,000 or more | $11,790 |
Reported via Form 568 (Limited Liability Company Return of Income). Verify current-year figures with FTB Publication 3556.
Federal & state tax elections
By default:
- Single-member LLCs are treated as disregarded entities for federal tax (filed on the member's Schedule C, or Form 1120-S / 1065 if elected).
- Multi-member LLCs are treated as partnerships (Form 1065) for federal tax.
- An LLC can elect to be taxed as a corporation (Form 8832) or as an S-corp (Form 2553), if it meets S-corp requirements.
For California state tax, LLCs remain subject to the $800 minimum franchise tax and any applicable gross receipts fee regardless of federal tax election, unless the LLC has elected to be treated as a corporation — in which case it becomes subject to California corporate franchise tax instead.
Foreign LLCs registering in California
An LLC formed in another state (a "foreign LLC" from California's perspective) that intends to transact business in California must register with the California Secretary of State by filing Form LLC-5 (Application to Register a Foreign LLC). Filing fee: $70.
Foreign LLCs are subject to the same $800 minimum franchise tax and Statement of Information requirements as domestic California LLCs.
State agency contact
California Secretary of State — Business Programs Division
Primary filing agency for LLC formation and ongoing compliance
Compared to neighboring states
Related California laws
Related comparisons
Related guides
Recent changes
- Tax year 2024First-year $800 franchise tax waiver under AB 85 (which had covered LLCs formed 2021–2023) has sunset. LLCs formed in tax year 2024 or later generally owe the $800 minimum from year one.
- 2022bizfileOnline expanded to allow same-day online processing of most LLC filings, replacing longer mail-in timelines.
- 2014California adopted the Revised Uniform Limited Liability Company Act (RULLCA), replacing the Beverly-Killea Act as the governing statute for California LLCs.
Need advice on your specific California situation?
State Law Handbook doesn't provide legal advice. Connect with a licensed California attorney for personal counsel.
Sources
Primary sources
- California Corporations Code §§ 17701.01–17713.13. California Revised Uniform Limited Liability Company Act — the primary LLC statute. https://leginfo.legislature.ca.gov/faces/codesTOCSelected.xhtml?tocCode=CORP&tocTitle=+Corporations+Code+-+CORP
- California Secretary of State — LLC Forms. Current forms LLC-1, LLC-12, LLC-5, LLC-3, LLC-4/7, and NRC. https://www.sos.ca.gov/business-programs/business-entities/forms
- bizfileOnline (California SOS). Online filing and business search portal. https://bizfileonline.sos.ca.gov
- FTB Publication 3556. Limited Liability Company Filing Information — the FTB's current guidance on franchise tax and gross receipts fee. https://www.ftb.ca.gov/forms/misc/3556.html
- California Franchise Tax Board — LLC Forms. Form 568, Form 3522, and instructions for annual filings. https://www.ftb.ca.gov/forms/