California is the largest state economy in the country and home to more small businesses than any other state, but it is also one of the more expensive places to run an LLC. The filing fee is low. The annual tax is not. If you budget for both from the start, forming a California LLC is straightforward and can be done online in a day.
This guide walks through each step, the real costs, and the deadlines that catch new owners out.
What a California LLC costs
Table of Contents
| Item | Cost | When |
|---|---|---|
| Articles of Organization (Form LLC-1) | $70 | At formation |
| Statement of Information | $20 | Within 90 days of formation, then every 2 years |
| Annual LLC tax | $800 minimum | Every year, starting in the first year |
| LLC fee (revenue-based) | $900 to $11,790 | Only if California gross receipts exceed $250,000 |
| Registered agent service (optional) | Varies | Yearly, if you use a service |
The $800 tax is the cost that surprises people. California charges every LLC organized or doing business in the state an annual tax of at least $800, whether or not it makes money. From 2021 to 2023 the state temporarily waived the tax for an LLC’s first year, but that relief has expired. New LLCs owe it from their first taxable year. Realistically, budget at least $870 in year one: $70 to file plus $800 in tax, plus $20 for the first Statement of Information.
Step 1: Choose and check your LLC name
Your name must include "Limited Liability Company", "LLC" or "L.L.C." and must be distinguishable from businesses already registered in California. Search the business database on bizfile Online before you file.
State availability is not the same as trademark rights. Search the US Patent and Trademark Office database too, and check the domain name and social handles. Our business name checklist covers each check.
Step 2: Appoint an agent for service of process
California calls the registered agent an agent for service of process: the person or company that receives legal papers on behalf of your LLC. The agent must have a physical California address and be available during business hours. You can act as your own agent if you have a California address, name another adult, or pay a registered agent company.
If you work from home and want to keep your address off public records, a commercial agent is worth considering.
Step 3: File the Articles of Organization
File Form LLC-1 through bizfile Online, the Secretary of State’s filing system, and pay the $70 fee. You’ll provide:
- The LLC’s name.
- The business address and mailing address.
- Your agent for service of process.
- Whether the LLC will be managed by its members or by managers.
Online filings are usually processed faster than paper filings. Once approved, download your filed Articles; you’ll need them for your EIN and bank account.
Step 4: File your first Statement of Information within 90 days
Every California LLC must file a Statement of Information within 90 days of filing its Articles, and every two years after that. It costs $20 and confirms your addresses, managers or members, and agent. Missing it can lead to penalties and, eventually, suspension.
Put the deadline in your calendar the day your LLC is approved.
Step 5: Create an operating agreement
California expects LLCs to have an operating agreement, which can be written, oral or implied. Put yours in writing. It sets out who owns what, how decisions are made, how profits are shared, and what happens if a member leaves or dies. It also helps show that the LLC is a separate entity from you, which supports your liability protection. You don’t file it with the state; keep it with your records.
Step 6: Get an EIN and open a business bank account
Apply for a free Employer Identification Number from the IRS online. You’ll need it to open a business bank account, hire employees and file taxes. Never pay a website for an EIN unless you want its help.
Then open a separate business bank account. Mixing personal and business money weakens your liability protection and makes taxes harder. See our guide to choosing a business bank account.
Step 7: Register for state taxes and get licenses
- Seller’s permit. If you sell taxable goods, register with the California Department of Tax and Fee Administration (CDTFA). The permit itself is free.
- Employer accounts. If you hire, register with the Employment Development Department (EDD) for payroll taxes.
- Local business license. Most cities and counties require a business license or business tax certificate. Los Angeles, for example, requires a Business Tax Registration Certificate.
- Professional and contractor licenses. Many trades and professions need a state license. Contractors, for instance, need a license from the Contractors State License Board for jobs of $1,000 or more.
Step 8: Pay the $800 annual tax on time
The annual tax is paid to the Franchise Tax Board (FTB), not the Secretary of State. For a new LLC, the first payment is due by the 15th day of the fourth month after the LLC is formed. After that, it’s generally due by April 15 each year. LLCs also file Form 568, the LLC return, with the FTB.
If your California gross receipts exceed $250,000, you’ll also owe the LLC fee, which ranges from $900 to $11,790 depending on revenue, and you’ll need to estimate and prepay it.
Late payments bring penalties and interest, and an LLC that stays unpaid can be suspended, which means it loses the right to do business and to use its name.
How a California LLC is taxed
By default, a single-member LLC is taxed like a sole proprietorship and a multi-member LLC like a partnership. Profits pass through to the owners’ personal returns, where they’re subject to federal tax, self-employment tax and California personal income tax. On top of that, the LLC itself pays the $800 annual tax and, above $250,000 in revenue, the LLC fee.
An LLC can choose to be taxed as an S corporation, which can reduce self-employment tax once profits are steady. In California, S corporations also pay a state tax on their income, so the math differs from other states. Talk to a California tax professional before electing.
Your California LLC compliance calendar
| Deadline | Filing | Paid to |
|---|---|---|
| Within 90 days of formation | Statement of Information ($20) | Secretary of State |
| 15th day of the 4th month after formation | First $800 annual tax | Franchise Tax Board |
| April 15 each year (generally) | $800 annual tax and Form 568 | Franchise Tax Board |
| June 15 (if revenue over $250,000) | Estimated LLC fee | Franchise Tax Board |
| Every 2 years, in your filing period | Statement of Information ($20) | Secretary of State |
| As required | Local business tax renewal, sales tax returns | City or county; CDTFA |
Should you form somewhere else to avoid California’s tax?
It’s a common question, and usually the answer is no. If your LLC does business in California, for example because you live and work there or have customers, property or employees in the state, it generally must register as a foreign LLC in California and pay the $800 tax anyway. You’d then pay fees in two states instead of one.
Mistakes to avoid
- Budgeting only $70. Plan for $870 or more in year one.
- Missing the 90-day Statement of Information.
- Forgetting the first annual tax payment, which is due within months, not next April.
- Operating with a suspended LLC. Check your status if you’ve missed filings.
- Mixing personal and business finances.
Frequently asked questions
How long does it take to form a California LLC? Online filings are often approved within days, though processing times vary with demand. Paper filings take longer.
Do I have to pay the $800 if my LLC made no money? Yes. The tax is due every year the LLC exists, until it is formally canceled.
Is there still a first-year exemption? No. The waiver applied only to LLCs formed from 2021 through 2023.
Can I be my own agent for service of process? Yes, if you have a physical California address and are available there during business hours. Your address will appear on public records.
Do I need a lawyer to form a California LLC? Not to file. Many owners file online themselves. A lawyer is worth it for multi-member LLCs, complex ownership, or a detailed operating agreement.
How do I close a California LLC? File cancellation documents with the Secretary of State and final returns with the Franchise Tax Board. Simply stopping business doesn’t stop the tax.
Next steps
Read the Start a Business A–Z guide, check your numbers with the startup cost calculator, and see how to choose a business name.
This guide is general information, not legal or tax advice. Fees and rules change; check the California Secretary of State and Franchise Tax Board before you file.
Sources
- Franchise Tax Board guidance summarized by Zenind, California LLC filing fees in 2026
- UpCounsel, California LLC costs (first-year exemption expired)
- File.Business, California filing requirements verified June 2026
- California Secretary of State, bizfile Online
Last reviewed October 18, 2026. Startup costs are estimates; check local prices, licensing and tax rules before you commit money.
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