How to start an LLC in California

Forming a California LLC costs $70 to file with the Secretary of State — and that number is almost beside the point. The real cost is the $800 minimum annual franchise tax you owe the Franchise Tax Board every year, even with zero income. Budget for that from day one, and California is straightforward. Ignore it, and it stings.

What a California LLC really costs

This is the section that saves you from a nasty surprise. California splits the cost of an LLC across two different state agencies, and only one of them is cheap.

Articles filing fee

$70

SOS, at formation

Statement of Information

$20

SOS, within 90 days

Minimum franchise tax

$800

FTB, every year

Tiered LLC fee

$0–$11,790

FTB, if receipts ≥ $250k

The Secretary of State (SOS) handles the paperwork that creates your LLC — the $70 Articles of Organization, filed through bizfile Online, and the $20 Statement of Information. That’s it. Roughly $90 in year one to the SOS. Full fee details are on the Secretary of State’s forms & fees page.

The Franchise Tax Board (FTB) handles the money, and this is where California earns its expensive reputation:

So the honest first-year number for a California LLC is closer to $890 in mandatory state charges — not $70. Anyone quoting you “$70 to start an LLC in California” is telling you a technically-true half-truth.

The $800 minimum franchise tax

Every California LLC owes the Franchise Tax Board a minimum $800 franchise tax per year. It’s a flat floor — you pay it whether your LLC made $5 million or nothing at all. A dormant, income-less LLC still owes $800.

It’s due by the 15th day of the 4th month of your tax year. For a calendar-year LLC, that’s April 15. For your first year, the clock starts at formation, so an LLC formed in, say, June 2026 owes its first $800 by mid-September 2026. It’s paid with FTB Form 3522.

The tiered LLC fee (a separate charge)

On top of the $800, California charges an additional LLC fee once your total California gross receipts hit $250,000. It’s tiered on gross receipts — revenue, not profit — so a high-volume, low-margin business can owe it even in a thin year:

This fee is estimated and prepaid on FTB Form 3536 (the estimated-fee voucher), then reconciled on your Form 568 return — and it’s in addition to the $800. So a California LLC doing $600,000 in gross receipts owes $800 + $2,500 = $3,300 that year. Most brand-new small LLCs stay under $250k and pay $0 in LLC fee — but know the ladder exists before you scale.

How to form a California LLC, step by step

Seven steps, split between two agencies. The Secretary of State creates your LLC; the Franchise Tax Board is the one you have to keep paying.

1. 1

   Choose your LLC name

   California requires your name to include “Limited Liability Company,” “LLC,” or “L.L.C.” and to be distinguishable from every entity already on the Secretary of State’s records. You can’t use words that imply you’re a bank, insurer, or corporation. Search existing names on bizfile Online before you commit. A name that’s clear today can be taken by the time you file, so don’t over-invest until your Articles are accepted.

2. 2

   Appoint an agent for service of process

   Every California LLC needs an agent for service of process (California’s term for a registered agent) — a person or registered corporate agent with a physical California street address who accepts legal documents on the LLC’s behalf. You can be your own agent if you have a California street address and are available during business hours; that address becomes public record. Many founders use a service instead.

3. 3

   File the Articles of Organization on bizfile Online

   The Articles of Organization (Form LLC-1) is what actually creates your LLC. File it through bizfile Online, the Secretary of State’s filing portal, and pay the $70 fee. The form asks for your LLC name, business address, agent for service of process, and whether the LLC is member-managed or manager-managed.

   Online filings have recently been processed in about two to three business days — a genuine improvement over California’s old multi-week backlogs — though the queue lengthens around the year-end filing surge; check the SOS’s current processing dates before you file. Once approved, your LLC legally exists.

4. 4

   File the Statement of Information within 90 days

   Here’s the deadline that catches people. Within 90 days of forming, you must file a Statement of Information (Form LLC-12) with the Secretary of State and pay $20. After that, it’s due every two years. It just confirms your addresses, management, and agent — no financials.

5. 5

   Get your EIN from the IRS

   An EIN (Employer Identification Number) is your LLC’s federal tax ID — you need it for a business bank account, hiring, and taxes. It’s free directly from the IRS, and you apply online after your LLC is approved. Never pay a third party a standalone fee just to “obtain your EIN.”

6. 6

   Register with the FTB and calendar the $800

   There’s no separate signup form for the $800 — the FTB expects it based on your existence as a California LLC. What matters is calendaring the payment: your first $800 is due by the 15th day of the 4th month after formation, and every year after. Use FTB Form 3522 for the annual tax voucher, and Form 3536 if you cross the $250k gross-receipts line and owe the LLC fee.

7. 7

   Create an operating agreement

   California’s LLC Act effectively expects every LLC to have an operating agreement — it can be oral, written, or implied, but a written one is the only sane choice, and it’s never filed with the state. It sets out ownership, voting, and how profits are split. Banks and investors ask to see it, and for single-member LLCs it helps show the LLC is genuinely separate from you — which is the whole point of forming one.

Should you form in California — or somewhere cheaper?

The tempting move is to form in Wyoming ($100/year, no state income tax) to dodge California’s $800. For a business that actually operates in California, this almost always backfires.

The rule of thumb holds: form where you actually do business. If your business genuinely isn’t tied to California — you’re location-independent, no California office, employees, or ongoing local activity — then a low-cost state like Wyoming can make sense. See our Wyoming LLC guide and best state to form an LLC for that comparison. And if you’re weighing an S-corp election to cut self-employment tax once you’re profitable, our LLC vs S-Corp guide walks through the math.

Is California right for you?

If you live and operate in California, form in California — the $800 follows you regardless, so there’s no advantage to forming elsewhere and every disadvantage in double overhead. Just go in clear-eyed: the true annual cost of a California LLC is $800 minimum (more once you cross $250k in gross receipts), not the $70 filing fee. Predictable, but not cheap.

Where FilingDesk fits

FilingDesk files California LLCs the same honest way we do everything: describe your business in plain English, and we run the name check, prepare and file your Articles of Organization with the Secretary of State — every filing reviewed by a human specialist before it’s submitted — then get your EIN and generate your operating agreement, with the registered agent included free for year one. One flat $99 plus California’s $70 filing fee, with a 60-day money-back guarantee and no upsells. And unlike the “$70!” crowd, we’ll make sure you know the $800 annual franchise tax is coming, so it’s a plan, not a surprise.

Ready? Start your California LLC now and we’ll get you moving.

Frequently asked questions

Sources

• California Secretary of State — Form an LLC (bizfile Online)
• California Secretary of State — LLC forms & fees (Articles of Organization LLC-1)
• California Secretary of State — Current processing dates
• California Franchise Tax Board — LLC annual tax & LLC fee
• California FTB — Form 3536, Estimated Fee for LLCs (2026 instructions)

This guide is general information, not legal advice. FilingDesk is not a law firm.