How to Start an LLC in California (2026 Guide)
To apply for an LLC in California, you file Articles of Organization (Form LLC-1) with the California Secretary of State for $70, file a Statement of Information (Form LLC-12) within 90 days for $20, and pay the $800 annual franchise tax to the Franchise Tax Board. For an LLC whose first taxable year begins in 2024 through 2026, the minimum state cost in year one is $890 ($70 + $20 + $800). The paperwork itself is simple. The costly mistakes come from missed deadlines, so the tax calendar matters as much as the filing.
If your first taxable year begins in 2027, 2028 or 2029, the first-year franchise tax is $400 under Revenue and Taxation Code section 17941(g)(2), based on a 2026 budget change. Confirm that amount with the Franchise Tax Board before you budget. The old first-year exemption covered only LLCs formed from 2021 through 2023.
California LLC Cost: Quick Answer
| Item | Agency | Cost | When it is due |
|---|---|---|---|
| Articles of Organization (Form LLC-1) | Secretary of State | $70 | At filing |
| Statement of Information (Form LLC-12) | Secretary of State | $20 | Within 90 days of filing |
| Annual franchise tax (first year) | Franchise Tax Board | $800 | 15th day of the 4th month after the filing date |
| Minimum first-year total | $890 |
Add $10 if you reserve a name first, plus any fictitious business name, permit or license costs for your activity. The Secretary of State’s official pages are at sos.ca.gov/business-programs.
How to Apply for an LLC in California: 7 Steps
- Choose and reserve a name. Your name must contain “limited liability company,” “L.L.C.” or “LLC.” “Limited” may be written “Ltd.” and “company” may be written “Co.” The name cannot contain “bank,” “trust,” “trustee,” “incorporated,” “inc.,” “corporation” or “corp.,” and it cannot suggest insurance. It must also be distinguishable from other LLC names in the Secretary of State’s records, so search the business search first. To hold a name while you prepare paperwork, reserve it for $10. The reservation lasts 60 days and is not renewable for consecutive periods. See the name availability page.
- Appoint an agent for service of process. The agent must be either an individual who lives in California or a corporation that holds a Corporations Code section 1505 certificate. An LLC must also keep an office in California, which does not have to be where it does business. Using a commercial registered agent service is optional. It is not required.
- File the California Articles of Organization (LLC-1). You can file online through bizFile Online, which is normally processed in about 5 business days or less. You can also file a paper copy by mail or in person, which takes 10 or more business days. Online is the fastest route, not the only one. The articles list the LLC name, the principal office street address, a mailing address if it differs, the agent, and whether the LLC is manager-managed. Expedite options are a 24-hour filing for $350 (online or drop-off), a same-day filing for $750 (received by 9:30 a.m.), or a 4-hour filing for $500 (drop-off only, precleared). Drop-off special handling adds $15.
- Write an operating agreement. The operating agreement sets out ownership, management and how decisions and profits are handled. You do not file it with the state, but you should keep a signed copy with your records.
- Get an EIN. The IRS issues Employer Identification Numbers free of charge. You need one to open a business bank account and to run payroll. Apply directly through the IRS and avoid websites that charge a fee for it.
- File the Statement of Information (LLC-12) within 90 days. The fee is $20. This is California’s LLC periodic report, so it is not optional. After the first filing, you file it every two years during the six-month window ending on the last day of the anniversary month. Starting August 1, 2026, filing online requires a web User Access account. If you miss the filing, the Secretary of State sends a notice, and the Franchise Tax Board can then assess a $250 penalty.
- Pay the $800 annual franchise tax. Pay with Form FTB 3522. For the first year, the payment is due on the 15th day of the 4th month after the Secretary of State filing date. After that, it is due on the 15th day of the 4th month of each tax year.
The Q4 trap: An LLC formed in October, November or December can owe its first $800 in early spring and its second $800 on April 15, roughly two months later. For example, an LLC formed on October 29, 2026 owes its first payment on February 15, 2027 and its next payment on April 15, 2027. Put both dates on your calendar when you file.
What to Do After Your LLC Is Filed
- Fictitious business name (DBA). If you will operate under any name other than your exact LLC name, file a Fictitious Business Name Statement with the county clerk-recorder in the county of your principal place of business (Sacramento County if you have none in California). File within 40 days of starting. The statutory fee is $10 plus $2 for each additional name or owner under Business and Professions Code section 17929, but counties charge more. Tehama County, for example, charges $31 plus $5 for each additional name. Newspaper publication is a separate fee. The statement must run once a week for four weeks, and it expires after five years. Details are on the Secretary of State’s fictitious business name page.
- Seller’s permit. If you sell taxable goods, register with the California Department of Tax and Fee Administration (CDTFA) at cdtfa.ca.gov. The seller’s permit is free, but it is a sales tax permit, not a business license. The statewide base sales tax is 7.25%. With district taxes, city rates run from 7.25% to 11.75%. A resale certificate has no required form.
- Employer account and workers’ compensation. If you will have employees, register with the Employment Development Department (EDD) when you hire and carry workers’ compensation insurance. California’s minimum wage is $16.90 an hour in 2026 and rises to $17.40 on January 1, 2027. Verify both figures with an official state source before you set pay.
- City and county licenses. California has no general statewide business license. The Secretary of State issues none, and the seller’s permit is not one. Most cities charge a local business tax or registration certificate (445 of 483 cities report revenue from one), but there is no common formula, so check your own city’s rules. Counties license only regulated activities.
- Professional and trade licenses. Regulated trades and professions are licensed by state boards. Contractors need a license from the Contractors State License Board for jobs of $1,000 or more, so confirm the threshold and rules with the board. Department of Consumer Affairs boards license many other occupations.
- Federal beneficial ownership reporting. As of August 2026, FinCEN does not require U.S. companies to file beneficial ownership (BOI) reports.
Structure Limits to Know Before You File
- No series LLC. California does not allow a domestic series LLC.
- No licensed professional services through an LLC. An LLC cannot render a licensed professional service unless the licensing law permits it. Professionals usually use a professional corporation instead.
- Out-of-state formation does not avoid the tax. Forming in Nevada or Delaware does not avoid California’s $800 annual tax.
Ongoing Costs for a California LLC
| Cost | Amount | How often |
|---|---|---|
| Statement of Information (LLC-12) | $20 | Every two years |
| Minimum franchise tax | $800 | Every year |
| Late Statement of Information | $250 penalty | Only if missed after a Secretary of State notice |
The LLC fee is separate from the $800 tax. It applies once California total income (gross income plus cost of goods sold, not gross receipts) reaches the thresholds below.
| California total income reaches | Annual LLC fee |
|---|---|
| $250,000 | $900 |
| $500,000 | $2,500 |
| $1,000,000 | $6,000 |
| $5,000,000 | $11,790 |
Confirm how the LLC fee applies to your numbers with the Franchise Tax Board. For free business advising, the California Small Business Development Center network is a useful starting point.
Disclaimer: This guide is informational only. It is not legal or tax advice. Your entity choice, tax position and licensing needs depend on your facts. Consult a qualified California attorney or CPA before you file, especially for a complex situation such as multiple owners, out-of-state activity or a licensed profession.