Start Your LLC In
California With One IBC

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Basic

$199

+ States Filing Fees

Form my LLC

02 weeks processing

Agent fee

Registered Address

Document filing with the Secretary of State

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Standard

$499

+ States Filing Fees

Form my LLC

05 days processing

Includes everything in basic package

Comprehensive name check

Preparation of Articles of Incorporation

Lifetime customer support (phone & email)

Federal Tax ID (EIN) Obtainment Service

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Premium

$599

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Form my LLC

01 day processing

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Key Points of California LLCs

Strong Privacy Protections

California LLC laws protect owners’ privacy and separate personal assets from business liabilities.

State Corporate Taxes

LLCs in California follow a consistent tax framework that simplifies compliance and supports pass-through taxation.

Business-Friendly Legal Environment

California’s clear legal framework and large market support business growth and reduce risks.

Understanding California LLCs

A California LLC combines the liability protection of a corporation with the flexibility of a partnership, making it a popular choice for business owners seeking both security and simplicity. It’s known for its straightforward setup process and benefits for entrepreneurs.

What is a California LLC?

A California LLC provides liability protection and flexible management. It shields members from personal debts and allows either member-managed or manager-managed structures.

Limited Liability Protection

Personal assets are protected from business debts

Flexible Management

Choose member- or manager-managed operations

Pass-Through Taxation

Avoid double taxation with profits passing to members

Why Choose an LLC in California?

Forming an LLC in California offers strong asset protection, greater tax flexibility, and enhanced business credibility within a trusted legal system, featuring a simple setup process and dependable safeguards for owners.

Key Benefits Include:

Privacy Protection

Predictable Taxes

No Double Taxation

Legal Environment

Business Credibility

Clear Guidelines

Pros and Cons of an LLC in California

Starting a California LLC: Benefits

A California LLC protects personal assets from business liabilities, offers flexible management, and allows privacy with limited disclosure of ownership details. It’s easy to set up, and a series LLC option allows for managing multiple assets separately.

Taxation of a California LLC

California LLCs benefit from pass-through taxation, where income is reported on personal returns. They are subject to an annual franchise tax and LLC fees based on income, but there’s no separate state income tax on LLCs.

Starting a California LLC: Drawbacks

Forming an LLC in California involves higher costs and more formalities than sole proprietorships. Ownership transfers can be complicated, and ongoing compliance, including annual filings and franchise taxes, is required to maintain liability protection.

Who Can Form an LLC in California?

Any individual or business entity can form an LLC in California, including sole proprietors, partnerships, and other existing businesses.

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Types of LLCs in California

Domestic LLC (California-based LLC)

A domestic LLC is formed under California law and operates within the state, offering limited liability protection and pass-through taxation.

Foreign LLC (Out-of-state LLC registering in California)

A foreign LLC operates in California but was initially formed in another state. It must register and comply with California's tax and reporting requirements.

Series LLC

California does not allow new Series LLCs, but Series LLCs from other states can register as foreign LLCs, though asset protection and tax benefits are limited.

Restricted LLC

California doesn’t allow restricted LLCs, but similar protections are possible through custom Operating Agreements or trusts.

Professional LLC (PLLC)

California requires licensed professionals to form Professional Corporations (PCs) instead of PLLCs to meet strict professional and regulatory standards.

How to Start an LLC in California

Choose a Business Name

Select a unique name that includes "LLC" or "L.L.C." and ensure it’s distinguishable from existing entities in California. Use the Secretary of State’s name search tool to verify availability.

Appoint a Registered Agent

Designate a registered agent to accept legal documents. This can be an individual or a registered service company with a physical address in California.

File the Articles of Organization

Submit Form LLC to the California Secretary of State, providing LLC name, principal office address, and registered agent details.

Create an Operating Agreement

Though not required, it’s recommended to draft an Operating Agreement outlining ownership, governance, and profit distribution to reinforce liability protection and support tax compliance.

California LLC Requirements

Age and Residency

Number of Members

Management Structure

Registered Agent and Office

Name Compliance

California LLC Application

To start an LLC in California, the key step is filing the Articles of Organization (Form LLC-1) with the California Secretary of State. This officially forms your business as a legal entity

Required Information

LLC name (with “LLC” or equivalent)
Registered agent’s name & physical California address
Business address (no P.O. Box)
Organizer’s name and address
Management structure (member-managed or manager-managed).

Filing Options

Online: Use California’s BizFile Online portal for the fastest processing.
By Mail: Send completed Form LLC-1 with fee: Secretary of State, Business Entities, P.O. Box 944228, Sacramento, CA 94244-2280.
In Person: At the Sacramento office; expedited service available with extra fees.

Post-Filing Requirements

Initial Statement of Information must be filed within 90 days of formation.
Operating Agreement is not filed but recommended.
Franchise Tax: All LLCs must pay California’s annual franchise tax.
Foreign LLCs must file Form LLC and include a certificate of good standing from their home state.

*Unlike some states, California does not allow restricted LLCs or PLLCs. Licensed professionals must form a Professional Corporation, not an LLC.

California LLC Taxation

Franchise Tax

Every California LLC must pay an annual minimum franchise tax of $800, regardless of income or activity.

California LLC Fee

LLCs with gross receipts of $250,000 or more in California must pay an additional LLC fee, ranging from $900 to $11,790 based on income.

Sales and Use Tax

LLCs selling physical products or taxable services must collect sales tax, which varies by location, with a base rate of 7.25%. Use tax may also apply on out-of-state purchases.

California LLC Annual Filing (Statement of Information)

What to File

Form LLC-12 lists the LLC name, address, registered agent, member/manager details, business description, and updates to agent, address, or management.

Filing Deadlines

Initial filing due within 90 days; biennial filings due every two years by the last day of the registration month.

Penalties & Consequences

Failure to file may result in suspension, losing liability protection, business authority, and the ability to obtain loans or licenses.

Expanding Your California LLC

As your business grows, you may expand your California LLC into other states. This involves registering as a foreign LLC in each state you plan to operate in and ensuring compliance with local regulations.

Registering a Foreign LLC in California

If your LLC was formed in another state but plans to operate in California, you are required to file Form LLC-5 with the state, submit a Certificate of Good Standing from your home state, and appoint a registered agent with a physical address in California.

Doing Business in Other States

To expand your California LLC, register as a foreign LLC in each state where you operate. This includes filing with the state, providing a Certificate of Good Standing, and meeting local tax and licensing requirements.