How to Start an LLC in California
| Item | Cost |
| Filing Form | Articles of Organization (Form LLC-1) |
|---|---|
| Filing Fee | $70 standard; $350–$750 expedited |
| Processing Time | 3–5 business days (online); 4 hours–24 hours (expedited, in-person) |
| Annual Franchise Tax | $800 minimum (due April 15) |
| Registered Agent | Required; must be CA resident 18+ or CA-authorized entity |
| Operating Agreement | Required by Cal. Corp. Code § 17701.10 |
| EIN | Recommended; free from IRS |
| Business License | Required from city/county clerk |
FAQ: California LLC Formation
1. How long does it take to form an LLC in California?
Standard online filing through BizFile takes 3–5 business days (Cal. Corp. Code § 17702.01). Expedited processing is available for in-person filing at the Secretary of State's Sacramento office only: 24 hours for $350 (Class C), same-day for $750 (Class B), or 4 hours for $500 (Class A). These expedited options are useful if you need immediate formation for financing, contracts, or time-sensitive business opportunities.
2. Do I need an operating agreement to form an LLC in California?
Yes. Cal. Corp. Code § 17701.10 requires every LLC—including single-member LLCs—to have an operating agreement. It does not need to be written, but a written agreement is strongly recommended to avoid disputes and establish clear management rules. If you don't create one, California's default RULLCA provisions apply (Cal. Corp. Code §§ 17704.01–17704.10), which may not protect your interests or match your business structure.
3. What is California's annual franchise tax, and when is it due?
Every California LLC must pay an $800 minimum annual franchise tax under Revenue and Taxation Code § 17941, due April 15 (the 15th day of the 4th month after your tax year begins). This applies to all LLCs formed in 2024, 2025, and 2026, with no first-year exemption. Payment is made via FTB Form 3522 (LLC Tax Voucher) to the California Franchise Tax Board.
4. What document do I file to form an LLC in California?
You file the Articles of Organization (Form LLC-1) with the California Secretary of State. This single document establishes your LLC under Cal. Corp. Code § 17702.01. The filing fee is $70.00 for standard processing (3–5 business days online) or $350.00–$750.00 for expedited processing at the Sacramento office. You'll submit your Articles through BizFile Online at https://bizfileonline.sos.ca.gov/.
5. Do I need a registered agent, and who can serve?
Yes. Every California LLC must maintain a registered agent for service of process under Cal. Corp. Code § 17701.13. Your registered agent must be a California resident aged 18 or older, a corporation or LLC authorized to do business in California, or a member of your LLC (if they meet residency requirements). The agent must maintain a physical street address in California—not a P.O. Box.
Step 1: Choose and Reserve Your LLC Name
Your LLC name is your legal identity in California. The Secretary of State must approve it before you file Articles of Organization. California law imposes specific naming requirements to protect consumers and avoid confusion with existing businesses.
Naming Requirements Under Cal. Corp. Code § 17701.08
Your LLC name must include one of these designators:
- "LLC"
- "L.L.C."
- "Limited Liability Company"
The name cannot contain restricted words without special approval: Bank, Trust, Insurance, Corporation, or Inc. If your business involves banking, insurance, or trust services, you'll need additional licensing and consent from the Secretary of State.
Name Distinguishability Standard
Your name must be distinguishable on the records of the California Secretary of State (Cal. Corp. Code § 17701.08). This means it cannot be identical or confusingly similar to an existing LLC, corporation, or registered business name. You can search existing names free at https://bizfileonline.sos.ca.gov/search/business.
How to Search the Secretary of State Database
Start by visiting https://bizfileonline.sos.ca.gov/search/business and entering your desired LLC name. Review the results carefully—your name must be completely distinguishable from all registered names. Run multiple searches using variations of your name to understand what similar names already exist. This step prevents you from investing time and money in a name that the Secretary of State will reject during filing.
Name Reservation (Optional but Recommended)
If you want to hold a name before filing Articles of Organization, you can reserve it for 60 days by paying a $10 fee to the Secretary of State. This gives you time to prepare your formation documents without risk of someone else claiming the name. File your reservation through BizFile at https://bizfileonline.sos.ca.gov/.
Doing Business As (DBA) Requirements
If you plan to operate under a name different from your registered LLC name, you must file a DBA (Doing Business As) with your county clerk for $26. For example, if your LLC is named "Smith Consulting LLC" but you want to advertise as "Smith's Business Solutions," you'll need a DBA. If you operate under your LLC's registered name exactly as filed, no DBA is required.
| Task | Fee | Duration |
| Name search | Free | Immediate |
|---|---|---|
| Name reservation | $10 | 60 days |
| DBA filing | $26 | 1–2 weeks |
Step 2: Appoint a Registered Agent in California
Every California LLC must maintain a registered agent for service of process. This person or entity receives legal documents on behalf of your LLC and must have a physical street address in California.
Who Can Serve as Registered Agent (Cal. Corp. Code § 17701.13)
Your registered agent must be one of the following:
- A California resident aged 18 or older
- A corporation or LLC authorized to do business in California
- A member of your LLC (if they are a California resident aged 18 or older)
The agent cannot be the Secretary of State. If you use a professional registered agent service, confirm they are authorized to do business in California and maintain a physical office address in the state.
Physical Address Requirement
The registered agent's street address must be a physical location in California—not a P.O. Box, mail-forwarding service, or virtual office. This address will be listed on your Articles of Organization and is public record. If you use a registered agent service, they will provide their California office address for this purpose.
Consent and Change of Agent
Your registered agent must consent to serve (Cal. Corp. Code § 17701.13). Obtain written consent from your agent before naming them in your Articles of Organization. If you later change your agent, there is no separate form; instead, you file either a Statement of Information (Form LLC-12, $20 fee) or an Amendment (Form LLC-2, $30 fee) with the new agent's information.
Self-Service as Registered Agent
You can serve as your own registered agent if you are a California resident aged 18 or older. This saves money but requires you to be available during business hours to receive legal documents. Many business owners choose to hire a professional registered agent service ($50–$300 per year) for convenience and to maintain privacy.
| Agent Type | Cost | Notes |
| Self (if CA resident) | $0 | Must be 18+ and available for service |
|---|---|---|
| Member | $0 | Must be 18+ and CA resident |
| Professional service | $50–$300/year | Provides compliance support and privacy |
Step 3: File Articles of Organization with the Secretary of State
Filing Articles of Organization (Form LLC-1) with the California Secretary of State officially creates your LLC. This is the core formation step and must be completed online through BizFile.
Form LLC-1: Required Contents (Cal. Corp. Code § 17702.01)
Your Articles of Organization must include:
- LLC name (with LLC, L.L.C., or Limited Liability Company designator)
- Purpose statement ("any lawful purpose" is acceptable)
- Street address of principal office in California
- Mailing address (if different from street address)
- Registered agent name and California street address
- Management structure: member-managed (default) or manager-managed
- Organizer name and signature (the organizer need not be a member or manager)
Filing Fee and Processing Time
- Standard filing fee: $70
- Standard processing time: 3–5 business days (online only via BizFile)
- Expedited options (in-person, Sacramento only):
- Class C (24 hours): $350
- Class B (same-day): $750
- Class A (4 hours): $500
Online Filing via BizFile
File online at https://bizfileonline.sos.ca.gov/. You will need:
- Your LLC name and registered agent information
- Your principal office address
- Your organizer's name and electronic signature
- Payment method (credit card or electronic check)
The Secretary of State will email you a filing confirmation and file number. Your LLC is formed when the Secretary of State files the Articles (Cal. Corp. Code § 17702.01(d)). Save your file number for future reference.
Effective Date Selection
You can request a delayed effective date up to 90 days in the future (Cal. Corp. Code § 17702.10). Most businesses choose immediate effectiveness, but delayed dates are useful if you want to file now but have your LLC take effect on a future date—for example, to align with a fiscal year or lease start date.
What Happens After Filing
Once your Articles are filed, you must file a Statement of Information (Form LLC-12) within 90 days (Cal. Corp. Code § 17702.09). This statement costs $20 and includes your registered agent's name and address, principal office address, manager or member names and addresses, and principal business activity. You'll file this biennial (every two years) thereafter.
| Filing Method | Fee | Processing Time |
| Online (BizFile) | $70 | 3–5 business days |
|---|---|---|
| Expedited Class C | $350 | 24 hours (in-person) |
| Expedited Class B | $750 | Same-day (in-person) |
| Expedited Class A | $500 | 4 hours (in-person) |
Step 4: Draft an Operating Agreement
An operating agreement is a binding contract among your LLC members that governs management, profit sharing, member rights, and decision-making. California law requires every LLC—including single-member LLCs—to have one (Cal. Corp. Code § 17701.10).
Why an Operating Agreement Matters
Without a written operating agreement, California's default RULLCA rules apply (Cal. Corp. Code §§ 17704.01–17704.10). These defaults may not match your business needs:
- Default management: Member-managed (all members have equal say)
- Default profit sharing: Equal among all members
- Default voting: Unanimous consent required for major decisions
- Default transferability: Restricted (members cannot freely sell interests)
A written operating agreement overrides these defaults and protects your LLC structure in disputes. It also clarifies member roles, prevents misunderstandings, and provides evidence of your business arrangement if disputes arise.
Written vs. Oral Agreements
Cal. Corp. Code § 17701.10 does not require the operating agreement to be written, but a written agreement is strongly recommended. Written agreements are enforceable, easier to reference, and reduce disputes. An oral agreement is legally valid but difficult to prove and enforce if members disagree about terms.
Key Provisions to Include
Your operating agreement should address:
- Member names and ownership percentages
- Management structure (member-managed or manager-managed)
- Profit and loss allocation (equal or unequal)
- Voting rights and decision thresholds (unanimous, majority, or supermajority)
- Member meetings and notice requirements
- Capital contributions (initial and ongoing)
- Distributions (when and how profits are paid out)
- Transfer restrictions (can members sell their interests?)
- Dissolution and buyout procedures
- Indemnification and liability limitations (Cal. Corp. Code § 17704.08)
Single-Member LLCs
Even if you are the sole member, you must have an operating agreement (Cal. Corp. Code § 17701.10). A single-member operating agreement is simpler but still essential for liability protection and tax clarity. It documents your intent to maintain the LLC as a separate legal entity and prevents commingling of personal and business finances.
Drafting Options and Costs
You have three options: DIY templates ($50–$200), online legal services ($200–$500), or attorney-drafted agreements ($500–$1,500+). DIY templates work for simple, single-member LLCs. Online services like LegalZoom and Rocket Lawyer offer California-specific templates with customization. Attorneys are best for complex multi-member structures or if you need tax planning advice.
Execution and Record-Keeping
All members must sign and date the operating agreement. California law does not require notarization or filing with the Secretary of State, but keep a signed copy with your business records. Store it securely alongside your Articles of Organization and any amendments. If you later change the agreement, document amendments in writing and keep them with the original.
| Approach | Cost | Time |
| DIY template | $50–$200 | 2–4 hours |
|---|---|---|
| Online legal service | $200–$500 | 1–2 weeks |
| Attorney-drafted | $500–$1,500+ | 2–4 weeks |
Step 5: Obtain an Employer Identification Number (EIN) from the IRS
An EIN (also called a Federal Tax ID) is a nine-digit number issued by the IRS to identify your LLC for tax purposes. Even single-member LLCs should obtain an EIN to separate business and personal finances.
Why You Need an EIN
- Tax reporting: Required if your LLC has employees or multiple members
- Business bank account: Most banks require an EIN to open a business account
- Liability protection: Using an EIN instead of your Social Security Number protects your personal identity
- Credibility: An EIN signals to vendors and clients that you are a legitimate business
- Audit protection: Clear separation of business and personal finances reduces IRS audit risk
How to Apply for an EIN
The IRS offers three ways to apply:
Online (Fastest): Go to https://www.irs.gov/ein and apply immediately. You'll receive your EIN instantly if you apply during business hours (Mon–Fri, 7 a.m.–10 p.m. ET). No fee.
By Phone: Call the IRS at 1-800-829-4933 (Mon–Fri, 7 a.m.–10 p.m. ET). You'll receive your EIN by phone and via mail. No fee.
By Mail: Complete Form SS-4 and mail it to the IRS. Processing takes 2–4 weeks. No fee.
What You'll Need
- Your LLC name and address
- Your principal business activity (e.g., consulting, retail, manufacturing)
- Your organizer's name, address, and Social Security Number (or ITIN)
- Your LLC's formation date
After You Receive Your EIN
Save your EIN confirmation letter in a secure location—you'll need it to open a business bank account and file tax returns. Record your EIN on all business documents, including invoices, contracts, and loan applications. Use your EIN (not your Social Security Number) when opening a business bank account. Update your LLC's records to include the EIN, though California does not require you to file it with the Secretary of State.
| Application Method | Processing Time | Cost |
| Online (IRS.gov) | Same day | Free |
|---|---|---|
| Phone (1-800-829-4933) | Same day (verbal); 2–4 weeks (written) | Free |
| Mail (Form SS-4) | 2–4 weeks | Free |