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LLC Formation in California: Complete 2025 Guide

Everything you need to know about forming an LLC in California, including the $800 franchise tax, processing times, and ongoing requirements.
Sarah Johnson, J.D.
March 15, 2025

Why Form an LLC in California?

California is home to Silicon Valley and remains one of the world's largest economies. Despite higher costs and taxes, many entrepreneurs choose California for its:

  • Access to venture capital and investment opportunities
  • Large talent pool and business ecosystem
  • Strong legal protections for business owners
  • No publication requirement (unlike New York)

California LLC Formation Costs

Required Fees:

State Filing Fee

$70

Franchise Tax (Year 1)

$800

Total Required
$870
Optional Expedited Processing:
  • 15-day expedite: +$350

    Processed within 15 calendar days

  • 24-hour expedite: +$500

    Processed within 1-2 business days

Step-by-Step Formation Process

1. Choose and Reserve Your LLC Name

Your LLC name must be unique and include "LLC" or "Limited Liability Company." Check availability using the California Secretary of State's business search tool.

Name Requirements:
  • Must include 'LLC' or 'Limited Liability Company'
  • Cannot contain restricted words like 'bank' or 'insurance'
  • Must be distinguishable from existing business names
2. Appoint a Registered Agent

California requires a registered agent with a physical address in the state. This can be yourself, a friend, or a professional service.

3. File Articles of Organization

Submit Form LLC-1 to the California Secretary of State with the $70 filing fee. You can file online, by mail, or in person.

Required Information:
  • LLC name and address
  • Registered agent name and address
  • Management structure (member-managed or manager-managed)
  • Purpose of business (can be general)
4. Pay the Franchise Tax

Within 3 months and 15 days of filing, pay the $800 franchise tax to the California Franchise Tax Board. This can be done online at ftb.ca.gov.

Processing Times

Standard Processing

15-20 business days

15-day Expedite (+$350)

15 calendar days

24-hour Expedite (+$500)

1-2 business days

Ongoing Requirements & Compliance

Annual Franchise Tax

California LLCs must pay a minimum $800 franchise tax every year, regardless of income. The tax is due by the 15th day of the 4th month after the beginning of the tax year (April 15 for calendar year LLCs).

Statement of Information (SI-550)

File a Statement of Information every two years with a $20 fee. This updates your LLC's address, registered agent, and member information.

Additional Tax Obligations

LLCs with gross receipts over $250,000 may owe additional fees ranging from $900 to $11,790 annually.

Post-Formation Steps

  • Obtain an EIN from the IRS

    Required for tax purposes and opening business bank accounts

  • Create an Operating Agreement

    Not required by law but highly recommended for multi-member LLCs

  • Open a business bank account

    Keep business and personal finances separate

  • Obtain necessary business licenses

    Varies by business type and location

Common Mistakes to Avoid

  • Missing the franchise tax deadline

    Results in penalties and potential suspension of LLC

  • Using a PO Box for registered agent

    Must be a physical street address in California

  • Not maintaining separate business records

    Could jeopardize liability protection

  • Forgetting to file Statement of Information

    Can result in suspension and loss of good standing

Ready to Form Your California Business?

Skip the paperwork and let us handle your California LLC formation. Pay only the state fees with transparent pricing.

Start Your California BusinessLearn More About California
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