How to Start an LLC in California
Forming an LLC in California costs $70 in state filing fees, paid to the California Secretary of State. Here is the full process, the real costs and the California-specific rules most guides skip.
What it costs
| Item | Cost | Required? |
|---|---|---|
| State filing fee (California Secretary of State) | $70 | Yes, one time |
| Franchise tax + biennial report $800 minimum franchise tax to the FTB each year, plus a $20 Statement of Information to the Secretary of State every 2 years. | $800/yr + $20 every 2 yrs | Yes, both recurring |
| Registered agent service | $100–$200 / year | Optional (you can be your own) |
| EIN from the IRS | Free | Yes, for banking and taxes |
| Operating agreement | Free–$200 | Required by state law |
Step by step
Choose and check your LLC name
Your name must be distinguishable from existing California entities and include "LLC" or "Limited Liability Company". Search availability for free on the California Secretary of State website before you fall in love with a name.
Appoint a registered agent
Required by law: a person or company with a physical street address in California, available during business hours to receive legal mail. You can be your own agent if you live in the state; most founders who value privacy or don't live there use a service ($100 to $200 per year).
File your formation documents ($70)
File Articles of Organization (in some states called a Certificate of Formation) with the California Secretary of State. Standard processing: about 5-8 business days online. This is the step that legally creates the LLC.
Get your EIN from the IRS (free)
The Employer Identification Number is your LLC's federal tax ID, needed for bank accounts, hiring and tax filings. The IRS issues it free. If the LLC's principal place of business is in the US and the responsible party has an SSN or ITIN, the IRS online application issues the number immediately (one EIN per responsible party per day). Owners without an SSN or ITIN, including most non-US founders, cannot use the online tool: they file Form SS-4 by fax (about 4 business days), by mail (about 4 weeks) or, for international applicants, by phone at 267-941-1099. Details and the exact numbers are in our non-resident guide. Never pay a service just for an EIN.
Create an operating agreement
California law requires LLCs to have an operating agreement, so this step is not optional here.
Handle ongoing compliance
California has two separate ongoing obligations, and they are not the same filing. First, a minimum $800 annual franchise tax paid to the Franchise Tax Board, owed whether or not the LLC earns anything. Second, a $20 Statement of Information filed with the Secretary of State within 90 days of forming and every two years after. LLCs above $250,000 in California gross receipts also owe an additional fee on top of the $800.
What a California LLC really costs in year one
| Item | Amount | When |
|---|---|---|
| Articles of Organization (LLC-1), online | $70 | At formation |
| Statement of Information (LLC-12) | $20 | Within 90 days of formation, then every two years |
| Annual LLC tax to the Franchise Tax Board | $800 | By the 15th day of the 4th month after the Articles are filed, then every year |
| LLC fee, only if California total income is $250,000 or more | $900 to $11,790 | Estimated by June 15 of the tax year |
| Registered agent service (optional) | $100–$200 / year | If you do not act as your own |
The realistic minimum is $890 in the first year and $800 to $810 a year after that, whether or not the LLC earns anything. The first-year exemption from the $800 that some articles still mention applied only to LLCs formed in 2021 to 2023 and has ended. Source: Franchise Tax Board, LLC fees and tax.
The $800 tax and the LLC fee, explained
- The $800 is owed from the start. An LLC formed in March owes its first $800 by the 15th day of the fourth month, June 15. It is due even if the LLC never opens a bank account.
- The LLC fee is separate and based on total income from California sources:
| California total income | Annual LLC fee |
|---|---|
| Under $250,000 | $0 |
| $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 |
The fee is estimated on form FTB 3536 by the 15th day of the sixth month of the tax year. Underpaying the estimate brings a 10% penalty on the shortfall.
The Statement of Information
- Due within 90 days of formation, then every two years, $20 each time. Filing it late or not at all can bring a $250 penalty, collected by the Franchise Tax Board, and eventually suspension.
- It lists the managers, or every member if there are no managers, plus the chief executive, their addresses and the agent. California is not a privacy state.
- From August 1, 2026, filing online through bizfile requires the Secretary of State's "User Access" setup. Allow time for it before your deadline. Details on the Statements of Information page.
Suspension: the real risk
An LLC that does not pay the $800 or file its returns can be suspended by the Franchise Tax Board or forfeited by the Secretary of State. A suspended LLC cannot defend itself in court and its contracts become voidable. Reviving it means paying every year owed with penalties and interest.
Changed your mind? Cancel within 12 months
If the LLC has not done business, filing the short-form cancellation within 12 months of formation avoids the first-year $800. After that, the tax keeps accruing every year until the LLC is formally cancelled.
Speed
Filing is online at bizfile Online. If you need it faster, the Secretary of State service options are 24-hour service for $350 and same-day for $750, both online, and 4-hour service for $500 by drop-off in Sacramento.
Forming elsewhere will not avoid the $800
An out-of-state LLC doing business in California, for example because its owner lives and works there, must register in California and pays the same $800 a year, on top of its home state's fees. For a business run from California, forming in California is almost always cheaper.
Mistakes we see with California LLCs
- Believing the first-year exemption still applies.
- Forming in Wyoming or Nevada to avoid the $800, then owing it anyway plus two states' fees.
- Missing the 90-day Statement of Information and the $250 penalty.
- Crossing $250,000 of income and forgetting the June estimate of the LLC fee.
- Letting an unused LLC sit for years instead of cancelling it.
Official California links
California LLC: frequently asked questions
How much does it cost to start an LLC in California?
The state filing fee is $70, paid to the California Secretary of State. Ongoing state cost: $800 franchise tax + $20 report every 2 years. Optional costs include a registered agent service (typically $100 to $200 per year) if you don't act as your own.
How long does it take to form an LLC in California?
Typical processing time: about 5-8 business days online. Many states offer paid expedited options if you need the LLC approved faster. The clock starts when the California Secretary of State receives your filing.
Do I need a registered agent in California?
Yes. Every California LLC must continuously maintain a registered agent with a physical street address in the state to receive legal and official mail. You can serve as your own agent if you have a California address and are available during business hours, or hire a commercial registered agent service.
What are the ongoing costs of a California LLC?
Two separate things. A minimum $800 annual franchise tax paid to the Franchise Tax Board regardless of income or activity, and a $20 Statement of Information filed with the Secretary of State every two years (the first one within 90 days of formation). LLCs with California gross receipts above $250,000 owe an additional graduated fee on top of the $800.
Does a new California LLC pay the $800 in its first year?
Yes. The first-year exemption applied only to LLCs formed from 2021 to 2023. A new LLC owes its first $800 by the 15th day of the fourth month after filing its Articles, even with no income.
Can I avoid California's $800 by forming in another state?
Not if you do business in California. An out-of-state LLC doing business there must register and pays the same $800 a year, plus its home state's fees.
What is the penalty for not filing the California Statement of Information?
A $250 penalty, collected by the Franchise Tax Board, and the LLC can eventually be suspended. The first statement is due within 90 days of formation and then every two years for $20.
Not sure whether California fits your situation?
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Compare with other states
Fees and rules last reviewed September 2026. State fees change; always confirm with the California Secretary of State before filing. This guide is general information, not legal or tax advice.