The choice between CA Form 565 and Form 568 comes down to legal structure, not federal tax treatment. File Form 565 if your business is legally organized as a general partnership, limited partnership, or limited liability partnership. File Form 568 if your business is a limited liability company, even if the IRS taxes it as a partnership, a disregarded entity, or a corporation. Getting this wrong delays processing and can trigger per-partner penalties that add up quickly.
Quick Decision: Which Form Fits Your Entity
Form 565, the Partnership Return of Income, is for entities legally organized as partnerships doing business in California or receiving California-source income. That covers general partnerships, limited partnerships, and limited liability partnerships.1Franchise Tax Board. 2025 Instructions for Form 565 Partnership Tax Booklet
Limited partnerships and LLPs that are registered or on file with the California Secretary of State must file Form 565 every year, even if they have no California activity and no California income. General partnerships without California activity or income don’t have to file.1Franchise Tax Board. 2025 Instructions for Form 565 Partnership Tax Booklet
Form 568, the Limited Liability Company Return of Income, is for every LLC registered with the California Secretary of State or doing business in California.2Franchise Tax Board. Limited Liability Company If the Secretary of State has your LLC on file, California expects Form 568 every year until you formally cancel the entity. An LLC earning zero income still owes the return.
One exception catches foreign filers off guard. A foreign LLC that is not registered with the Secretary of State, is not doing business in California, but earns California-source income files Form 565 instead of Form 568.1Franchise Tax Board. 2025 Instructions for Form 565 Partnership Tax Booklet Form 568’s annual tax and fee obligations attach to LLCs registered or doing business in the state, so a non-registered foreign LLC with only passive California income reports through the partnership form.
Why Federal Tax Treatment Doesn’t Change Your California Form
A multi-member LLC defaults to partnership treatment for federal purposes. A single-member LLC defaults to disregarded entity treatment. Either can elect corporate treatment by filing IRS Form 8832.3Internal Revenue Service. LLC Filing as a Corporation or Partnership None of those elections change the requirement to file Form 568 in California.
What does change is how much of Form 568 you complete:
- Multi-member LLCs taxed as partnerships file the full return and allocate income to members on Schedule K-1 (568).
- Single-member LLCs treated as disregarded entities still file Form 568 to pay the annual tax and fee, but operating income is reported on the owner’s individual return.4Franchise Tax Board. Single Member LLC
- LLCs electing corporate treatment file a partial Form 568 to pay the annual tax and LLC fee, plus the appropriate corporate return (Form 100 or 100S) for income reporting.5Franchise Tax Board. 2025 Instructions for Form 100-ES Corporation Estimated Tax
The mirror rule holds for partnerships. A limited partnership that operates and looks like an LLC still files Form 565, because the Secretary of State knows it as a partnership.
What Each Form Costs
California imposes an $800 annual tax on LLCs, limited partnerships, and limited liability partnerships. General partnerships are exempt.6Franchise Tax Board. Partnerships The tax applies every year the entity exists, even if it earns nothing, and continues until the entity is canceled or dissolved with the Secretary of State.7California Legislative Information. California Revenue and Taxation Code 17941
Only LLCs owe the graduated LLC fee on top of the $800. Partnerships filing Form 565 never owe it, no matter how much they earn. The fee tiers are based on total California income:8California Legislative Information. California Revenue and Taxation Code 17942
- $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
“Total income” here means gross income plus cost of goods sold, not net profit. That figure is often much larger than taxable income, so an LLC with $3 million in revenue and slim margins still owes the $6,000 fee even if it barely breaks even.9Franchise Tax Board. FTB Pub. 3556 – Limited Liability Company Filing Information For a similarly sized limited partnership filing Form 565, the fee simply doesn’t exist.
Due Dates and the Right Payment Voucher
Both Form 565 and Form 568 are due on the 15th day of the third month after the close of the taxable year. For calendar-year filers reporting the 2025 tax year, that date is March 16, 2026 (since March 15 falls on a Sunday).10Taxes. Important Dates for Income Tax California grants an automatic seven-month extension to file, moving the deadline to October 15, but the extension does not extend any payment deadlines.11Franchise Tax Board. Extension to File
The $800 annual tax has different due dates depending on entity type, which trips people up constantly. For LLCs, the annual tax is due on the 15th day of the fourth month of the taxable year, or April 15 for calendar-year filers.7California Legislative Information. California Revenue and Taxation Code 17941 For limited partnerships and LLPs, the annual tax is due when the return is due, on the 15th day of the third month.12California Legislative Information. California Revenue and Taxation Code 17935 If you operate both an LLC and a limited partnership, mark both dates.
Each payment travels on its own voucher, and using the wrong one causes processing delays:
- FTB 3522, LLC Tax Voucher, is used by LLCs to pay the $800 annual tax.2Franchise Tax Board. Limited Liability Company
- FTB 3536, Estimated Fee for LLCs, is used to remit the estimated graduated LLC fee by June 15 for calendar-year filers. Underestimating triggers a 10 percent penalty on the underpayment, though paying at least 100 percent of the prior year’s fee is a safe harbor.13Franchise Tax Board. 2025 Instructions for Form FTB 3536 Estimated Fee for LLCs14Franchise Tax Board. FTB 1024 Penalty Reference Chart
- FTB 3538, Payment for Automatic Extension, is used by limited partnerships and LLPs to pay the $800 annual tax when filing under extension.11Franchise Tax Board. Extension to File
Penalties for Filing Wrong or Filing Late
The California late filing penalty for both Form 565 and Form 568 is $18 per partner or member for each month the return is late, up to a maximum of 12 months.15Franchise Tax Board. Common Penalties and Fees A 10-partner partnership that files six months late owes $1,080 before interest. The penalty also applies when the return is filed on time but incomplete; missing a required schedule counts as failure to file.14Franchise Tax Board. FTB 1024 Penalty Reference Chart
LLCs face an additional late filing penalty on top of the per-member charge: 5 percent of the unpaid tax (including the LLC fee) for each month the return remains unfiled, up to 25 percent. If an LLC misses the extended due date, the FTB calculates this penalty from the original due date, not the extension date.16Franchise Tax Board. 2025 Instructions for Form 568 Limited Liability Company Tax Booklet That stacks on top of the $18-per-member penalty, so the combined bill for a late-filing LLC with unpaid fees grows fast.
These are only the California penalties. Partnerships and multi-member LLCs also owe a federal informational return (Form 1065), with its own separate late filing penalty per partner per month. Filing the California return on time does not satisfy the federal obligation.
Stopping the $800 Clock on an Inactive Entity
The $800 annual tax keeps accruing every year until you formally cancel the entity with the Secretary of State. Stopping operations or letting the entity go dormant does not end the obligation. To stop the tax, you file a final return with the FTB (checking the “Final Return” box), then file a certificate of cancellation or dissolution with the Secretary of State within 12 months.17Franchise Tax Board. Closing a California Business Entity
If the entity is already suspended or forfeited for unpaid taxes, you have to revive it first, which means paying all delinquent balances, penalties, and interest, before the Secretary of State will accept the cancellation filing.17Franchise Tax Board. Closing a California Business Entity Owners who walk away from an LLC without canceling it often discover years later that they owe thousands in back taxes. An entity with no remaining assets that never conducted business, or that has stopped, may qualify for voluntary administrative cancellation, which can result in the FTB abating unpaid taxes, fees, and penalties.