How To Start An LLC In California: A Step-By-Step Formation Guide (Apr. 2026)

Starting a California LLC is a very smart business decision when looking to protect your personal assets and establish a flexible business structure. The initial formation process includes several key steps and state filings before your LLC is officially registered and operating. This includes certain filings with the California Secretary of State and the Franchise Tax Board (FTB) to remain compliant.

To ensure you can successfully form your LLC in California, I’ll walk through the main steps of how to start an LLC in California, the relevant costs, and what to do once your formation process is completed.

How To Start An LLC In California

Starting your LLC in California is fairly straightforward if you follow the correct regulatory processes and filings. I’ve detailed the main steps, so you have everything you need regarding how to start an LLC in California online without issues or delays.

Tip: If you’d prefer a professional to handle everything for you, from formation paperwork to tax setup, check out my guide to the Best LLC Services In California. These services can save you time, prevent filing mistakes, and ensure your LLC stays compliant from day one.

1. Pick A Suitable LLC Name

Your first step before officially forming your LLC is to check that your desired business name is unique and distinguishable from other businesses currently operating in California.

If you don’t do this, your Articles of Organization will be rejected, and you’ll have to start the formation process again.

Visit the California Business Entities Search to check your desired business name against existing ones currently on state records.

Note: You must be familiar with the state naming rules to choose a suitable name and get your LLC approved. I’ve explained this in more detail in my article: California LLC Name Search.

2. Appoint A Registered Agent

Once you’ve chosen a suitable business name, your next step is to appoint a Registered Agent. This is an individual or company that acts as your official physical business address and receives important state regulatory notices and legal mail on your behalf. This is a mandatory state requirement in California.

• Your Registered Agent can be yourself, a friend, a family member, or a professional third-party service.
• They must have a physical California street address (Not a P.O. box).
• Your Registered Agent’s name and address will be listed on public records.

3. File Your Articles of Organization With The California Secretary Of State

With your official business name decided and Registered Agent in place, your next step is to file your Articles of Organization with the California Secretary of State. This is an official state document listing your company name, purpose, members, and Registered Agent.

• This can only be filed through Bizfile Online as of 2025.
• It costs $70 to file your Articles of Organization with the California Secretary of State.
• It takes approximately 3-5 business days for your filing to be processed. Once done, your LLC will officially be approved by the state.

Tip: Use my step-by-step guide to complete your California LLC Articles Of Organization.

4. Draft An Operating Agreement

While not legally required in the state of California, I recommend that every LLC operating in the state draft an Operating Agreement (OA). Therefore, I’ve included this as my next step once you’ve filed your Articles of Organization and officially formed your LLC.

An OA is a crucial internal business document outlining how your LLC operates, including management roles and decision-making processes. Its main purpose is to clearly define the management structure and ensure all members understand their roles and responsibilities.

Drafting an OA offers several benefits:

• Prevents internal disputes regarding management structure and ownership.
• Strengthens your limited liability protection.
• Clarifies members’ voting rights and profit distributions.
• Designates your LLC as a legitimate and organized business entity.

Your OA is an official internal document. You do not need to send it to the IRS or the California Secretary of State.

Your OA must reflect your LLC’s management structure, whether it’s member-managed or manager-managed. You can use the two free templates below, depending on your management structure.

See my guide on How To Create A California LLC Operating Agreement for step-by-step instructions.

5. Get An EIN For Your LLC

Once your OA is completed and signed, your next step is to obtain an Employer Identification Number (EIN).

This is a unique nine-digit number that helps identify your LLC for federal tax purposes. It’s issued by the Internal Revenue Service (IRS).

Note: An EIN is also called a Federal Employer Identification Number (FEIN) or a Federal Tax ID Number. These terms refer to the same business identifier.

Getting an EIN allows your business to:

• Open a dedicated business bank account.
• File and pay your federal taxes.
• Hire employees and process payroll.
• Apply for state or local business licenses and permits.

Getting an EIN is a mandatory state requirement in California. Each of these functions ensures smooth business operations and helps your LLC to operate legally and remain compliant with the state.

• Your EIN application is completely free.
• The only application process takes approximately 15 minutes.
• If you apply by mail or by fax, it takes approximately 4 weeks to receive your EIN.

Read my guide on Obtaining An EIN For Your California LLC for more details.

You’ll receive an EIN Confirmation Letter (Form CP 575) from the IRS once your EIN application is approved.

6. Submit Your Statement Of Information

The California Secretary of State requires you to file a Statement of Information (Form LLC-12) when forming your LLC. This updates the State with your LLC’s current details (Business address, management structure, and Registered Agent information).

• This must be filed online through the California Secretary of State’s website.
• The filing fee is $20.
• Your Statement of Information is due within 90 days of forming your LLC (The initial registration).
• It must be filed every two years thereafter (Biannually) under California Corporations Code §17702.09.

Example: You form your LLC on October 14, 2026.

• Your first Statement of Information must be filed by January 12, 2027 (Within 90 days).
• Future applications must be filed every two years by October 14.

Check out my complete guide on How To File The California LLC Statement Of Information.

7. Obtain The Required Business Licenses and Permits

Your LLC must obtain all necessary business licenses and permits to legally operate in California. These are required according to your specific business industry and location

The state of California does NOT require a general state-level business license. However, you may need industry-specific licenses or local permits from your city or county government, depending on your type of business.

Check out California Business Licenses & Permits for detailed guidance on what licenses and permits your business may need.

In addition, if your business involves the sale of tangible goods, you must also secure a seller’s permit from the California Department of Tax and Fee Administration (CDTFA). This permit authorises your business to collect sales tax from customers, a requirement for any business selling physical products in California.

For full details on how to apply, responsibilities, and criteria, see my guide: California Seller’s Permit.

8. File The $800 Annual Franchise Tax (Form 3522)

All LLCs operating in California must pay an $800 Annual Franchise Tax each year, regardless of how much income you earn. All payments can be submitted online or by mail and made payable to the California FTB.

• You must include the payment voucher (Form 3522) with your payment if you file by mail.
• Your first $800 Annual Franchise Tax payment has to be paid 4 months and 15 days following approval. The month that your LLC was formed counts as month one.
• The tax is due every year thereafter by April 15.

See my article on the California Annual $800 Franchise Tax for step-by-step instructions on how to complete this requirement.

Example: Your LLC was approved in May 2025.

• Your first $800 payment is due by August 15, 2025.
• Your next payment is due by April 15, 2026
• Future payments need to be made on every April 15 thereafter.

To learn how to avoid this, check my guide How To Avoid Paying The $1,600 California LLC Franchise Tax. I’ve answered the question “Do you have to pay the $800 California LLC fee the first year?” and given some useful recommendations. Read it to find out the cheapest way to form an LLC in California.

Next Steps After Your LLC Is Approved

You need to complete three additional main steps once your Articles of Organization have been approved by the California Secretary of State. These ensure that your LLC is financially organized and remains legally compliant when operating in the state.

1. Open Your Business Bank Account

Once you’ve received your EIN, your next step is to open a dedicated business bank account. This should be done for three key reasons:

1. It maintains a clear separation between your personal and your business finances. This is essential for protecting your limited liability status.
2. It helps safeguard your personal assets against business debts and lawsuits. You reduce the risk of “piercing the corporate veil” by maintaining a clear separation.
3. It makes it easier to manage your bookkeeping, track expenses, and prepare accurate taxes if you have a business bank account.

2. File Your Biennial Report

Most states require an Annual Report to update your key business information. However, California requires that every LLC submit a Statement of Information (Form LLC-12) to the California Secretary of State every two years.

• This is a mandatory filing used to update key business information (Business address, management structure, Registered Agent details).
• This keeps your public records accurate and in good standing with the state.

Your first Statement of Information is due within 90 days once your LLC has been approved. Future statements are due every two years thereafter. The Statement of Information filing fee is $20.

3. Pay Your Taxes And Fees

Instead of paying federal income taxes at the entity level, all LLC members pay taxes based on company profits through their personal income tax returns. This becomes part of your personal income return, meaning you pay your taxes via pass-through taxation.

The IRS taxes all LLCs based on the number of owners:

• A Single-Member LLC is taxed as a Sole Proprietorship.
• A Multi-Member LLC is taxed as a Partnership.

Note: Your LLC can be taxed as a C-Corporation or S-Corporation if you file the appropriate election form with the IRS. As a community property state, married couples who co-own an LLC can be taxed as a Single-Member LLC (Qualified Joint Venture) instead of a Partnership.

California LLCs must also pay state and local income taxes in addition to federal taxes. Some LLCs may also be required to pay sales tax.

These are the three types of required annual tax payments and fees:

• Estimated LLC Fee (Form 3536): This applies to LLCs with annual gross receipts exceeding a certain threshold. The fee is based on your total revenue.
• $800 Annual Franchise Tax (Form 3522): All LLCs are required to pay this, regardless of income. I’ve explained this in more detail above.
• California LLC Return of Income (Form 586/100/100s): This annual tax return is used to report income, pay the $800 franchise tax, and calculate additional LLC fees owed to the state.

See my complete article on California LLC Annual Fees for a complete breakdown.

a. Estimated LLC Fee (Form 3536)

If your annual gross receipts (Total revenue) are over $250,000, you’re required to pay an Estimated LLC Fee. You do not need to pay this fee if your LLC earns less than the stated amount. You’ll need to complete Form 3536, filing it along with the estimated payment.

See my full guide on How To File The California LLC Estimated Fee (Form 3536) for more details on fee thresholds and filing instructions.

c. File Form 568 (Or Form 100 Or Form 100S)

All LLCs operating in California must file a state-level tax return with the California FTB annually. The required filing is Form 568, officially called the LLC Return of Income.

This applies to most California LLCs. You need to file Form 568 if your LLC is taxed as a:

• Sole Proprietorship.
• Partnership.
• Qualified Joint Venture.

If your LLC is taxed as a Corporation, you must file a different form:

• Form 100 for LLCs taxed as C-Corporations.
• Form 100S for LLCs taxed as S-Corporations.

For detailed information on which form to file and when payment is due, see my full guide: California LLC Form 568.

California Secretary Of State: Key Contact Information

You can contact the California Secretary of State – Business Programs Division if you have questions regarding your LLC formation, filing, or status updates.

Here are the main contact details:

Mailing Address:
California Secretary of State
Business Entities, 1500 11th Street
Sacramento, CA 95814

Phone: (916) 657-5448

Website: https://www.sos.ca.gov/business-programs

Note: Their business hours are 8:00 A.M. to 5:00 P.M. PT (Monday – Friday).

California Franchise Tax Board: Key Contact Information

The California FTB can be contacted if you have questions about LLC taxes, annual fees, and Form 568 filings.

You can reach them using three different methods

Mailing Address:
Franchise Tax Board
P.O. Box 942857
Sacramento, CA 94257-0500

Phone (General Business Tax Line)

• 1-800-852-5711 (Within the U.S.)
• +1-916-845-6500 (Outside the U.S.)

Website: https://www.ftb.ca.gov

Note: Their business hour are 8:00 A.M. to 5:00 P.M. PT (Monday – Friday).

Frequently Asked Questions