Forming an LLC in California costs $70 to file Form LLC-1 (Articles of Organization) with the California Secretary of State. The main recurring state cost is the $800 annual tax administered by the Franchise Tax Board (FTB). The temporary first-year exemption applied only to tax years beginning in 2021 through 2023, so a new LLC in 2026 generally owes the tax in its first taxable year unless a specific statutory exception applies. LLCs with total California income of $250,000 or more can owe an additional tiered LLC fee from $900 up to $11,790. California also requires an Initial Statement of Information within 90 days and then a filing every two years.
How much does a California LLC cost?
Budget at least $890 in California state charges for a typical new LLC: $70 for formation, $20 for the Initial Statement of Information, and generally $800 for the annual tax. The temporary blanket first-year exemption covered tax years beginning in 2021 through 2023 and has ended. The $20 information statement is due again every two years. Total California income of $250,000 or more can trigger an additional tiered LLC fee, and optional services or activity-specific taxes can add more.
Why form your LLC in California
No other state matches California’s capital pool, talent density, or consumer market — but the tax bill is real. Most multi-state founders form here only when they have actual California operations or plan to register here as a foreign LLC anyway.
- No other state matches California's capital, talent, or consumer market
- Large California market and direct access to the state filing system
- Same-day to 3-day online approval through bizfile Online
- Strong legal infrastructure for tech, biotech, entertainment, and ag businesses
- Series LLC structure not available — but California recognizes out-of-state series LLCs
- Robust IP and trade-secret protections
Best fit for: Tech & software · Entertainment · Agriculture (Central Valley) · Biotech
Don’t want to file yourself? Northwest Registered Agent files your California LLC for $39 + state fee and acts as your registered agent the first year free.
How to form a California LLC in 7 steps
- 1Search the California LLC name database
Use the California Secretary of State business search to confirm your name is available. The name must include "Limited Liability Company" or one of these abbreviations: "LLC", "L.L.C.", "Ltd. Liability Co." It cannot mislead the public about the LLC's purpose or imply a banking, insurance, or trust function. Reserve a name for $10 (held 60 days) if needed.
- 2Appoint an Agent for Service of Process
California uses the term "Agent for Service of Process" instead of registered agent, governed by Cal. Corp. Code § 17701.13. The agent must have a genuine physical California street address — PO boxes are prohibited, and California also prohibits using a UPS Store, mailbox service, or mail-forwarding address that is not a real office. Popular commercial agents include CT Corporation and Northwest Registered Agent, both of whom maintain legitimate California office addresses. You can serve as your own agent if you are a California resident with a physical California address, which keeps costs down but means your personal address appears on the public bizfile record visible to anyone. If your business address changes or you want more privacy, switching to a commercial agent costs nothing beyond the agent's annual fee — file a Statement of Change via bizfile.sos.ca.gov. Always ensure your agent for service of process is reachable during normal business hours; a missed service of process can result in a default judgment against your LLC.
- 3File Articles of Organization (Form LLC-1)
File online through bizfile.sos.ca.gov using Form LLC-1 for a $70 fee. Under Cal. Corp. Code § 17702.01, the Articles must include the LLC name, agent for service of process, management structure (member-managed or manager-managed), and a general statement of purpose. Same-day online approval is common. One critical follow-up step that many new owners miss: within 90 days of formation, you must file a Statement of Information (Form LLC-12) with the Secretary of State — this is a separate $20 filing that provides your principal office address, mailing address, agent for service of process, and CEO or manager information. Missing this 90-day deadline triggers a $250 penalty, and the Secretary of State can suspend the LLC. After the initial SOI, the filing is due every two years on the last day of your formation anniversary month.
- 4Draft an Operating Agreement
California is one of the few states that legally requires LLCs to have an Operating Agreement (it can be oral, written, or implied — but written is strongly recommended). The agreement defines membership interests, management authority, profit/loss allocations, voting, transfer restrictions, and dissolution procedures. Banks and lenders will routinely ask for it.
- 5Apply for an EIN with the IRS
Free at irs.gov, takes 10 minutes online. Required to open a business bank account, register with the California Department of Tax and Fee Administration (CDTFA), and file federal taxes. Single-member LLCs without employees can technically use the owner's SSN, but get an EIN.
- 6File the Initial Statement of Information (Form LLC-12)
Required within 90 days of LLC formation. The fee is $20 and includes basic info: principal office address, mailing address, agent for service of process, and CEO (if applicable). After the initial filing, the Statement of Information is due every two years. Missing the deadline triggers a $250 penalty.
- 7Register with the FTB and CDTFA
The California Franchise Tax Board (FTB) administers the $800 annual tax. For a calendar-year LLC, the payment is generally due by the 15th day of the fourth month of the taxable year using Form 3522. A narrow short-form cancellation rule can apply to an LLC that meets every FTB condition and cancels within its first 12 months; do not treat that as a general first-year waiver. Register separately with the CDTFA or EDD when sales-tax or employer obligations apply.
File directly with California Secretary of State →
California LLC taxes & compliance
The $800 annual tax is a major fixed cost for a CA LLC. On top of that, total California income of $250,000 or more can trigger a tiered LLC fee from $900 up to $11,790. Check the FTB instructions because sourcing and statutory exceptions matter.
Ongoing compliance checklist
- $800 minimum annual franchise tax to FTB — due 15th day of 4th month each tax year
- Additional LLC fee if total California income is $250K or more (Form 3536 and Form 568)
- Statement of Information — $20 every 2 years
- California Form 568 (LLC return) — due March 15 (or April 15 for SMLLCs)
- Sales and use tax filings (CDTFA) — monthly, quarterly, or annually
- Local business license (city-by-city — Los Angeles, San Francisco, San Diego all have separate requirements)
Registered agent rules
Required — California calls this an "Agent for Service of Process." Must have a physical CA street address.
Hidden costs new California LLC owners forget
- $800 minimum annual franchise tax — the highest in the U.S.
- Additional LLC fee on total California income of $250K or more: $900 to $11,790
- Initial Statement of Information ($20) due within 90 days of formation
- Statement of Information renewal: $20 every 2 years
- Combined sales tax averages 8.85% with local add-ons reaching 10.75%
- Foreign LLC registration: $70 + $800 franchise tax for out-of-state LLCs doing business in CA
Should you use a formation service in California?
You can absolutely file directly with the California Secretary of State for the $70 state fee. The reasons most California owners use a service anyway are (1) registered-agent privacy — keeping their home address off public filings — and (2) calendar reminders for ongoing compliance.
Have Northwest form your California LLC for $39 + state fee
Free registered agent for the first year. Real human support. Privacy-by-default — your home address stays off public filings.
Free tool
See the real 5-year cost of a California LLC
Filing fee · registered agent · annual report · franchise tax — all calculated, year by year.
Open cost calculator for California →California's $800 minimum franchise tax hits even brand-new LLCs
California's Franchise Tax Board imposes an $800 annual tax on LLCs that are organized, registered, or doing business in the state, subject to specific exceptions. The temporary general first-year exemption applied only to tax years beginning in 2021 through 2023. A new LLC in 2026 should therefore budget for the tax in its first taxable year unless it qualifies for another statutory exception. LLCs with total California income of $250,000 or more can owe an additional tiered fee of $900, $2,500, $6,000, or $11,790. The Secretary of State also requires an Initial Statement of Information and subsequent biennial statements.
A baseline first year is $70 for formation, $20 for the initial Statement of Information, and generally $800 for the annual tax: $890 before optional services. Because the $20 statement is biennial after the initial filing, a simple three-year state-fee illustration is $2,510 before any additional income-based LLC fee or optional registered-agent service.
New California LLC owners routinely miss that the first $800 franchise tax is due by the 15th day of the fourth month after formation — not at year-end with the tax return. An LLC formed in November owes $800 by March 15 of the following year. Missing this deadline triggers a $100 penalty plus interest from the Franchise Tax Board, compounding an already steep first-year cost.
California LLC: frequently asked questions
How much does it cost to form an LLC in California?
California charges $70 to file Form LLC-1 and currently charges $20 for the Initial Statement of Information. A new LLC in 2026 generally also owes the $800 annual tax in its first taxable year. The temporary general first-year exemption applied to tax years beginning in 2021 through 2023. Specific cancellation or other statutory exceptions may apply.
How long does it take to form an LLC in California?
Online filings through bizfile Online typically approve same-day to a few business days. Mail filings can take 5–8 weeks. California offers paid expedited service: $350 for 24-hour, $750 for same-day, and $500 for 4-hour processing.
What is the California $800 LLC tax?
It is the $800 annual tax administered by the California Franchise Tax Board (FTB). An LLC that is organized, registered, or doing business in California generally owes it even with no profit, subject to statutory exceptions. The temporary general first-year exemption ended after tax years beginning in 2023.
Does California have an LLC annual report?
California requires a Statement of Information (Form LLC-12) every two years instead of annually. The fee is $20. The first Statement is due within 90 days of formation. Missing the deadline triggers a $250 late penalty.
Can I avoid the $800 California LLC tax?
An LLC organized, registered, or doing business in California generally owes the $800 annual tax. Forming in another state does not remove California obligations when the entity is doing business in California. Review the FTB's current doing-business tests and statutory exceptions for the LLC's actual facts.
Should I form my LLC in California or Delaware/Nevada/Wyoming?
If you live and operate in California, form in California. Forming in Delaware/Nevada/Wyoming and then registering as a foreign LLC in California means you pay both states — including the $800 California tax. The "magic state" myth costs more than it saves for California-based founders. Form out-of-state only if you have a specific reason (raising VC = Delaware) and accept the dual filing burden.
What is the California LLC fee based on income?
In addition to the $800 annual tax, an LLC can owe a tiered fee when its total California income is $250,000 or more. The statutory fee tiers are $900, $2,500, $6,000, and $11,790. Use current Form 568 and Form 3536 instructions to determine California-source amounts and payment timing.
Is a single-member LLC recognized in California?
Yes. California recognizes single-member LLCs (SMLLCs) and they get full state-level liability protection. For federal taxes, the IRS treats SMLLCs as "disregarded entities" by default — income flows to the owner's Schedule C. Note: California treats SMLLCs as disregarded for income tax but still requires them to pay the $800 minimum franchise tax and file Form 568.
What taxes does a California LLC have to pay?
California LLC taxes depend on classification and activity. An LLC organized, registered, or doing business in the state generally owes the $800 annual tax, and total California income of $250,000 or more can trigger an additional tiered LLC fee. Income, sales, payroll, and other taxes may also apply. The temporary general first-year exemption covered tax years beginning in 2021 through 2023 and is not a current blanket exemption.
Can a non-resident or out-of-state owner form an LLC in California?
Yes. California does not require an LLC owner to be a resident, but the LLC needs an agent for service of process and must meet filing requirements. The $800 annual tax and the additional fee based on total California income can apply regardless of where an owner lives. Operating in another state may also trigger foreign qualification there.
How do I dissolve an LLC in California?
To dissolve a California LLC, you must first file a Certificate of Dissolution (Form LLC-3) and, if the business has wound up its affairs, a Certificate of Cancellation (Form LLC-4/7) with the California Secretary of State — there is no filing fee for either form as of 2024. Before filing, the LLC must pay all outstanding taxes and fees owed to the California Franchise Tax Board, including any final-year franchise tax, and file a final tax return. You should also cancel any local business licenses and notify creditors. The Secretary of State typically processes dissolution filings within 5 business days, after which the LLC no longer legally exists in California.
Do I need a business license for my LLC in California?
California does not issue a single statewide general business license, but most cities and counties require a local business license or business tax certificate that must be obtained separately from your LLC formation. For example, Los Angeles, San Francisco, and San Diego each have their own local licensing requirements and fees that vary by business type and revenue. Certain professions and industries — such as contractors, healthcare providers, food businesses, and childcare — also require state-level professional licenses issued by agencies like the Contractors State License Board or the California Department of Public Health. You should check with both your city or county clerk's office and the relevant state licensing agency to determine exactly which permits apply to your specific business activity.
Is an operating agreement required for a California LLC?
California law (Corporations Code Section 17701.10) requires every California LLC to have an operating agreement, making it one of the few states with a statutory mandate — though the state does not collect or review the document. The operating agreement can be written, oral, or implied, but a written agreement is strongly recommended to clearly define each member's ownership percentage, voting rights, profit distributions, and procedures for adding or removing members. Without a written operating agreement, your LLC defaults to California's standard statutory rules, which may not reflect how you actually want to run the business. For single-member LLCs, a written operating agreement also helps reinforce the separation between you and the business, which is important for maintaining liability protection.