To meet California LLC formation requirements, you file Articles of Organization (Form LLC-1) with the Secretary of State, pay a $70 filing fee, name a California-based agent for service of process, file an initial Statement of Information within 90 days, and budget for the $800 annual franchise tax that every California LLC owes the Franchise Tax Board. An operating agreement is expected by statute even though you never send it to the state, and most LLCs will also want a federal EIN from the IRS.
What Goes on the Articles of Organization
Your LLC exists the moment the Secretary of State files this form, so the contents need to be right the first time. California Corporations Code § 17702.01 requires:1California Legislative Information. California Code CORP 17702.01
- The LLC’s name, meeting California’s naming rules.
- A principal office street address, plus a separate mailing address if it differs. P.O. boxes are not accepted for the street address.
- The name and California street address of the agent for service of process.
- A management structure statement if the LLC will be manager-managed or run by a single manager. Leaving this blank makes the LLC member-managed by default.
- A purpose statement. California uses fixed boilerplate on Form LLC-1 stating the LLC will engage in any lawful activity, and the instructions specifically say not to alter it.
That last item catches people who have formed LLCs in other states. You do not describe your specific business here.
Naming Your LLC
The name has to include “Limited Liability Company” or an accepted abbreviation such as LLC, L.L.C., or Ltd. Liability Co. It cannot be the same as, or confusingly similar to, another LLC, foreign LLC, or reserved name already on file with the Secretary of State. Run a name check through the bizfile Online portal before you file.2California Legislative Information. California Code Corporations 17701.08
Some words are off the table entirely: bank, trust, trustee, incorporated, inc., corporation, corp., insurer, and insurance company. These are reserved to avoid confusion with regulated industries and other entity types.2California Legislative Information. California Code Corporations 17701.08
Agent for Service of Process
Every California LLC has to name an agent for service of process and keep the designation current for the life of the company. This is the person or company that will accept lawsuits, subpoenas, and government notices for the LLC. If your agent information is stale and a lawsuit comes in, you may not learn about it until a default judgment has already been entered.3California Legislative Information. California Code Corporations 17701.13
There are two options. An individual agent must be a California resident with a street address in the state. A registered corporate agent is a company that has filed a certificate under Corporations Code § 1505 and maintains a staffed street address during business hours.4California Legislative Information. California Code Corporations 1505
Privacy is the main reason to hire a commercial agent. The agent’s name and address appear on the Articles of Organization and every Statement of Information, all of which are public. Acting as your own agent puts your home address in a searchable state database. Either way, a P.O. box will not do; Form LLC-1 requires a physical street address.
Member-Managed or Manager-Managed
You lock in the management structure on the Articles. In a member-managed LLC, every owner can make decisions and bind the company. That fits small businesses where all owners are active. In a manager-managed LLC, designated managers run operations while other members hold passive interests. The Articles must state manager-managed status explicitly; silence defaults you to member-managed.1California Legislative Information. California Code CORP 17702.01
This choice also drives disclosures later. A manager-managed LLC lists its managers on the Statement of Information. A member-managed LLC lists all members. If some owners want their names off the public record, manager-management gives you a lever.
How to File and What It Costs
You can file online through the Secretary of State’s bizfile Online portal or mail Form LLC-1 to the Sacramento office. Online filing usually clears within a few business days. Paper filings take longer.5California Secretary of State. bizfile Online
The filing fee is $70, paid at submission and non-refundable whether the state accepts or rejects the filing. Once your Articles are approved, you’ll get a stamped copy back. Look at it right away. Correcting an error later means filing an amendment with its own fee.
The 90-Day Statement of Information
Within 90 days of your Articles being filed, you have to submit a Statement of Information (Form LLC-12) with a $20 fee. It reports current members or managers, the business address, the agent for service of process, and the general type of business.6California Legislative Information. California Code CORP 17702.09
After that initial filing, the Statement of Information is due every two years during your LLC’s filing period, which is the calendar month your Articles were filed plus the five months just before it. Miss it and the LLC can lose good standing, which blocks you from suing, defending suits, or keeping certain licenses active.
Operating Agreement
California doesn’t require you to file an operating agreement anywhere, but the LLC statute assumes one exists. Corporations Code § 17701.10 makes the operating agreement the document that governs relations among members, the rights of managers, the LLC’s activities, and its own amendment process. Anything the agreement doesn’t address falls to the statutory defaults, which often do not match what owners actually want.
At a minimum, cover:
- How profits and losses are split, especially if the split isn’t the same as ownership percentages.
- Voting rights and which decisions need a majority versus unanimous consent.
- How new members are admitted and what happens when a member leaves, dies, or becomes incapacitated.
- When and how the LLC distributes profits, and whether it can hold earnings back for reinvestment.
Single-member LLCs need one too. Without it, a court has more room to argue that the LLC isn’t really separate from you personally, which is exactly the finding that erases the liability shield.
The $800 Annual Franchise Tax
This is the number that surprises most new California LLC owners. Every LLC organized or doing business in California owes an $800 annual tax to the Franchise Tax Board whether or not it earned a dollar of income. It’s due by the 15th day of the fourth month of the taxable year, which is April 15 for calendar-year filers. You owe it every year the LLC exists, until you formally cancel with the Secretary of State.7California Franchise Tax Board. Limited Liability Company
The first-year exemption that covered LLCs formed between January 1, 2021, and January 1, 2024, has expired. LLCs formed in 2026 owe the full $800 in their first year.
LLCs with higher California-source income pay an additional fee on top of the $800:
- $250,000 to $499,999 in California income: $900
- $500,000 to $999,999: $2,500
- $1 million to $4,999,999: $6,000
- $5 million or more: $11,790
The fee is calculated on total California-source income, not net profit. A high-revenue, thin-margin business can owe thousands beyond the base tax.8California Legislative Information. California Revenue and Taxation Code 17942
EIN and Federal Tax Classification
California does not decide how the IRS taxes your LLC. By federal default, a single-member LLC is a “disregarded entity” and its income lands on your personal return. A multi-member LLC defaults to partnership taxation, filing an informational return while members report their shares individually.9Internal Revenue Service. LLC Filing as a Corporation or Partnership
You can elect corporate treatment with Form 8832, or S-corporation treatment with Form 2553. Both elections have timing rules, so run the numbers with a tax professional before your first tax year closes.
Most LLCs also need an Employer Identification Number, which the IRS issues for free through its online application. You’ll need one to open a business bank account, hire employees, or file various tax returns. The online tool issues the EIN in a single session, and you’re limited to one EIN per responsible party per day.10Internal Revenue Service. Get an Employer Identification Number
Beneficial Ownership Reporting
The Corporate Transparency Act once required most LLCs to file beneficial ownership information with FinCEN. In March 2025, FinCEN issued an interim final rule exempting all U.S.-created entities from that filing. Only foreign companies registered to do business in the United States must still file beneficial ownership reports. A California-formed LLC with no foreign corporate structure currently has no federal BOI filing obligation.11FinCEN. FinCEN Removes Beneficial Ownership Reporting Requirements for US Companies and US Persons