How to Start an LLC in California for $0 (CA LLC 2022)


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How to Start an LLC in California: If you’re looking to start a California LLC for $0, you’ve come to the right page. Setting up an LLC is easy and cost-effective. To form an LLC, you must follow a few steps that include naming your LLC, hiring a registered agent, filing your formation documents, submitting initial report, doing the operating agreement, and finally obtaining the EIN. You can easily set up your LLC for free in California. However, you must pay the mandatory state filing fee. These fees and charges can be tax deductible, making the LLC formation cost $0.

On this page, You’ll find all the steps that must be taken to ensure that your California LLC has been correctly formed. We recommend you read the whole article very carefully, word by word, don’t miss anything 🙂

California LLC

How to Start an LLC in California

An LLC (aka Limited Liability Company) is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection. For an LLC, members’ personal assets are not affected by business debts. However, in some cases, if the LLC is sued for business debts, courts might pierce the corporate veil and use the owner’s personal assets to meet their corporate liabilities.

If you wish to start an LLC, you must file your Articles of Organization with the State and pay a filing fee of $70. While it’s the most important step, it’s not the only one. There are 5 other crucial steps to follow to get your LLC formed in California. Below mentioned all 6 steps that explain everything you need to do to start a California LLC in 2022. Let’s get started! You can always hire a professional LLC formation service in California to set up your LLC instead of doing it alone; a Pro service will ensure everything is done properly.

Step 1: Decide a Name for Your California LLC

California name your llc

The first step while forming a limited liability company in California is to give a proper name to your LLC. Before you name your business, you must know that the name should be easy to remember, available in the state, and follows all the LLC naming guidelines.

LLC Naming Guidelines in California

There are a few specific requirements all the LLCs in California have to follow while naming their Company. Some of the most important requirements are as follows:

  • Your business name should be available, and no other existing business in California can have the same name. TailorBrands offer unlimited business name searches at $0.
  • “Limited Liability Company”, “LLC”, “L.L.C.”, “LC”, “L.C.”, and “Limited Company” – any one of these has to be used as a suffix in your business name.
  • You cannot use any name for your business that is confusing or misleading. Terms such as “Treasury”, “State Department”, “FBI”, “CIA”, etc. shouldn’t be included.
  • Terms like “Bank“, “University“, “Attorney“, “Doctor“, etc can be added only after the additional requirements by California State Government are fulfilled.
  • (Optional) It’s better to name your business something for which your desired domain is available.
Important Links –Submit Offline Form to –
California Business Entity Search – Online Name Search
Name Reservation Form – PDF
California LLC Name Search Guide – Instructions
Secretary of State, Atten: Name Availability Unit
1500 11th Street, FL. 3
Sacramento, CA 95814

Reserve Business Name for Future

If you do not wish to file your LLC right now, but want to hold the name you have decided on, you can reserve your LLC name for 60 days. To keep the name, you must file a name reservation application and pay $10 (by mail) or $20 (in-person drop) to reserve your name with the California Secretary of State. You can renew the name after 60 days but not for another 60 days period.

Doing Business As (DBA) or Trade Name

Once you have a legal name for your LLC, you can register it. However, it is not mandatory. You can, instead, use DBA, Fictitious Name, or Trade Name. In that case, you must register your name with the California Secretary of State by submitting an online form and the filing fee of $26 for first-time registration for each additional filing, which costs $5 for each.

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Apart from LLC formation, TailorBrands offer DIY website templates and incredible logo designs at a very reasonable price. If you plan to get a website, then it is wise to have a “.com” domain for your business, but these days you can also use other TLDs like “.io”, “.company”, “.xyz,” etc. Here you can get everything you need for your business in one dashboard.

Do I have to include LLC in my company email/domain?

It is not legally mandatory to use the word LLC in your domain name or email. If you want, you can use it. However, it is recommended not to use LLC in the domain name. A domain name should be short and easy to remember.

Step 2: Assign a Registered Agent in California

California registered agent

The second step to forming an LLC in California is to appoint a Registered Agent. A registered agent is a person or business entity working on your LLC’s behalf. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in California. Hence, hiring a competent California Registered Agent for your LLC is necessary. 

Make sure your registered agent is a resident of California or has a physical street address. This address will be used as the principal address of your LLC to receive any legal documents. Most LLC formation companies also provide registered agent services. Below are two great LLC formation services; even if you buy their cheapest plan (normally $49/year), you also get registered agent service and other services at a very reasonable price.

LLC Service

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$49 + State Fees

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$299 + State Fees

  • Turnaround in a few days

  • EIN & Website Included

  • Operating Agreement Included

These two are our top recommendations for registered agent service, as they are competent and authorized to conduct business in California. Some LLC formation services also offer standalone California registered agent services. You can purchase only Registered Agent services without purchasing any other LLC formation services. This standalone service might become handy if you are doing it yourself and don’t want to disclose your home address or you don’t want to pierce the corporate veil.

Who Can Be a Registered Agent?

A person above 18 years of age and has a physical address in the state of California can be a Registered Agent. A Registered Agent for service of process can be an independent person or a business entity. One is responsible for handling all the legal documents on the LLCs behalf.

Can I Be My Own Registered Agent?

Yes, you can be your own registered agent for service of process if you are a resident of the state of California and you are above 18 years of age. To become a registered agent, you must have the authority to conduct any type of business in California.

Why Shouldn’t I be My Own Registered Agent?

There are a few reasons why you shouldn’t be your own registered agent. The address of the registered agent is used to communicate with the SOS or for any legal activities. If you are your own registered agent, you might have to upload your personal address to the public forum. Besides, the registered agent must be at the address during business hours. It won’t be easy for you as you also have to take care of other things in your LLC. Hence, it is wiser to appoint a separate entity as your registered agent.

What is Piercing the Corporate Veil in LLC?

If an LLC is sued in California, in some cases, courts might decide to lift the corporate veil, which means the owners of the LLC will be personally liable for their business debts. They might have to forgo their personal assets to repay their business debts. This is called piercing the corporate veil, where personal and business assets are not separated anymore. Your personal assets can be protected if you have enough capital and all your LLC documents are properly filed.

Step 3: File Articles of Organization in California

California certificate of formation

The third and most important step in forming an LLC is to file the Articles of Organization. This California Articles of Organization is a legal document that is required to register your business with the California Secretary of State. It costs $70 (online and by mail filing) to file your formation certificate in California.

The articles of organization include details like the name of the LLC, the registered agent’s name, address, employees’ details, and the company’s structure (member-managed or manager-managed). Before hiring employees in California LLC, one should know about the rules and regulations thoroughly. Also, if you are expanding your existing business (an LLC) in other states to California, you must register as a California Foreign LLC.

How to File Online

Go to the Secretary of State Online Service. You will get the login page. If you are already a subscriber, then log in with your credentials. If not, then you have to sign-up with the site. You can either select the option ‘Sign-up’ from the Login page or click on the button below. Read more about the California Articles of Organization for online registration.

How to File by Mail

If you prefer filing real-life forms for your LLC registration in California, then you can download form LLC-1. Read the form thoroughly, fill it out, and send it to the address mentioned below.

Mailing Address: Secretary of State
Business Entities Filings
P.O. Box 944228
Sacramento, CA 94244

In-Person Submission:
1500 11th St.
Sacramento, CA 95814
Mon-Fri. 8 a.m. to 5 p.m.

Processing Time: Normally, it takes around 5 business days (approx) to get your LLC formed in California. The processing time for online filing might be a little faster than offline filing. But this can be expedited by paying an additional fee. $350 for filing in 24 hours, $500 for filing in 4 hours, and $750 for filing on the same day. However, the document processing time can be changed due to various factors.

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Every LLC owner has to pay the filing fees to register their business in California. This fee is mandatory but also tax deductible. If you’re doing it yourself (filing on your own), it will not cost you any additional service fee. However, it is not feasible to do that as the DIY process might be delayed, complicated, and messy, especially if you’re a novice entrepreneur. Hence, it is recommended to get professional guidance to get your LLC formed in California.

Step 4: Initial Statement of Information Filing

california statement of information

In California, LLCs have to file the Initial Statement of Information with the California Secretary of State. This type of document is not common in all states. This statement includes all the unknown information that is not mentioned in the formation documents. After 90 days of LLC formation, LLCs have to submit this statement.

California is one of those few states that have the requirement of this document. Basically, this document has everything that has been decided in the LLC in their first board meeting. It costs $20 to file the Initial Statement of Information. It can be filed online or by mail, or in person.

Mailing Address: Secretary of State, Statement of Information Unit
P.O. Box 944230
Sacramento, CA 94244

In-person Submission: California Secretary of State Sacramento Office
1500 11th Street
Sacramento, CA 95814

Step 5: Create Your LLC Operating Agreement in California

california operating agreement

Moving on to the fifth step, filing your operating agreement. An operating agreement is an internal document that legally outlines the proprietorship and operating procedures of your LLC. This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts. Even for the informal business structure, you should get this document.

When it comes to filing a California LLC Operating Agreement, the state does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all the details of your business operation that helps in taking future business decisions, especially if you decide to dissolve California LLC later. Hence, having an operating agreement may not be necessary, but it is surely ideal.

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The operating agreement draft can be created for free if you don’t hire a professional. However, there is an advantage to appointing a proficient person/service. You will get a businesslike quality operating agreement at a very cheap fee, which will help you in the future. Hiring a professional service means you can sleep well at night 🙂

Step 6: Filing a California LLC EIN

california file EIN for llc

The Employer Identification Number or EIN is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify the type of business for tax purposes and taxes in general. The EIN is necessary for any active business or any form of business, for that matter. 

EIN is needed when the LLC hires employees. Hiring employees in California LLC requires following specific rules and regulations. On the other side, EIN for California foreign LLC should be obtained if your LLC is based in other states.

To obtain EIN (aka FEIN), one must fill up a form (Online or by mail) and submit it to the IRS. Enter details of your LLC, and finally, complete the form and send it to the address given. You can also get an EIN Assistant to help you with the process.

Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999

Fax: (855) 641-6935 | Fee: Free

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Note: You don’t need a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.


Congratulation, you are now done with all the necessary steps to form your Limited Liability Company in California. If you do it yourself, it should take you a long time to understand and do all the steps properly.

However, if you use TailorBrands, it should be way faster. You will always have a live chat option and phone support with experts for any help you need. Their worry-free service will make things easier for you.


After Starting Your California LLC

After forming your LLC, there are still some things that you will need. The most important thing is to separate your business and personal assets. LLCs have limited liability protection that protects your personal assets from business liability. This is called a corporate veil. However, the corporate veil can be lifted or pierced by the court if the LLC is sued. In that case, the owners of the LLC become personally liable for their corporate debts. A few things like appointing a legit registered agent, having enough capital, and filing all the major documents with the state can save the LLCs from being pierced into the corporate veil.

Apart from that, there are a few things you need to take note of,

  • Get a company business bank account, business credit cards, business accounting tools, and, if needed, business accounting software. Business accounts and related software help LLCs to conduct business with ease.
  • File California business permits & licenses. Check all the details of business licenses before you choose the one for your LLC. Pay the fees for business licenses on time to avoid discrepancies. To run any legitimate business in California, it is mandatory to get a proper license and permit. 
  • Get general liability insurance and professional liability insurance with coverage for employees. There are many types of business insurance. If you have a simple business structure, you might not need much insurance. On the other side, for a large LLC, you might need more. 
  • File a California LLC annual report or biennial report

This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings, to make sure your LLC is up-to-date.

Cost of Starting an LLC in California

LLCs can be formed for $0. Apart from the mandatory state filing fees, you don’t have to bear additional service charges if you do it yourself. Following are the fees and taxes LLCs in California must pay to register and run a business in the state. Forming an LLC is no doubt cost-effective compared to other business structures. However, the fees and charges (tax-deductible) that you must pay to the state, such as name reservation fee, name filing fee, LLC filing fee, and Franchise Tax & Sales Tax (If applicable). Here are the main fees and taxes you must pay while forming your limited liability company in California,

Fees/TaxAmount to be Paid
Name Reservation Fee (online and by mail)$10 (mail) or $20 (in person) for 60 days
Articles of Organization Fee$70
Franchise Tax$800
Biennial Report (every 2 years)$20
Sales Tax7.25%

In California, LLC name reservation is mandatory. You can register your LLC name at the time of registering your LLC. If you wish to hold the name for some time without registering your LLC, you can do it for 60 days. It can be renewed by paying $10 (by mail) and $20 (in-person drop-off). Your LLC name will be reserved for additional days (less than 60 days). In some states, Name Reservation is not mandatory.

According to the Franchise Tax rule, LLCs have to pay this tax every year. Annual Franchise Tax reports are considered to be the annual revenue report or annual report of the LLC. Read our guide on LLC costs in California for more information.

California Foreign LLC

If you are interested in forming a Foreign LLC in the state of California, then you need to file the Certificate of Foreign LLC to the California Secretary of State. Foreign LLCs allow you to operate your business in more than one state. Along with the Certificate of Foreign LLC, you need to submit some more documents like the Certificate of Good Standing, etc. to the California SOS to form your foreign LLC in the state of California. To know more in detail, check out our guide on California Foreign LLC.

Reasons to Start an LLC in California

California is one of the best states to set up an LLC. With a GDP of $2.3 Trillion, California’s economy has become one of the strongest ones in the last few years. Having an LLC in the state of California is not only easy but also economically profitable for any start-up. Among 130 businesses, the top 20 businesses have their business home in California. The reason mostly is the tax benefits. There are some government regulations under which LLCs get incentives and grants.

California is the heart of the business, where you can get vast potential customers for your business. The state has a lot of opportunities for entrepreneurs. The best part of the state is that you can get business funds easily for your business. For example, there are small banks for small business to support. These business banks have loan facilities for informal business structure as well. Besides, if you have a woman-owned business, then you might get tax benefits. Along with providing limited liability protection, LLCs have fewer tax liabilities. Besides, you may get professional liability insurance to protect your professional assets along with personal asset protection. Here are some benefits of having an LLC in the state of California,

Personal Liability Protection

In California, starting an LLC means your personal liability is protected from your professional debts. In any situation, if you are unable to pay the debts, none of your personal assets will be lost. Personal and professional assets and liabilities are separated.

Tax Benefits

California is a state where various tax credits are given to qualified companies. A couple of important tax benefits that a qualified company can get while starting your LLC located in California. Read more on California’s classification of LLC tax.

  • Small Business Tax – In California, if the company is small and qualified, it will get access to corporate tax rates. For a small company, the tax rates are lesser than the bigger ones.
  • Capital gains exemptions – If qualified, the smaller companies will get the facility of capital gains exemptions.
  • Same Tax rate as Partnership – When you start your LLC in the state of California, it will generate a C-corp. You can shift from C-Corp to S-corp if you want if certain eligibility criteria meet. The tax rates will be the same for S-corp as Partnership.

Low-Cost LLC Formation

The cost of LLC formation in California is much lesser than in the District of Columbia, Connecticut, and Delaware. 

Raising Funds

As per requirement, LLCs located in California can raise funds through sales of stocks. There are some criteria to meet. Once qualified, companies can raise funds easily.

Businesses to Start in California State

There are plenty of business ideas that must be hitting your mind if you want to start an LLC in the state of California. But it is not possible to enter every business and earn money. So, here is a list of businesses that one can consider starting in California.

The sector of technology manufacturing is employing the most significant proportion of the workforce compared to other industries, i.e., 9.4%. High-tech computers, software developments, and electronic items come under this business industry. It is noted that the technology products have constituted an equal of around 29% of the total export of state, which is equal to a contribution of $120 billion to the state GDP.

Service Sector

The Californian state’s service sectors like educational services, health care services, tourism, and leisure services sector have shown promising growth in a few years. More than 4 million small to big service provider businesses in the state have a considerable contribution of around $500 billion. Out of this huge value, only two universities, named the University of California and California, Los Angeles, contribute around $!29 billion, which is enormous.

Renting Businesses

The population of the Californian state is increasing day by day. In the past few years, the state’s people have doubled as people see more scope of earning money in the state. It is nearly impossible for every person to buy a new property, so they look for renting houses. If you are thinking of starting a new business, then renting a business is also great. A significant portion of renting business contribution is made by corporate sector renting.

There are some small business ideas also that you can consider if you have a low investment.

  • Customized cake shops
  • Catering business
  • Gift shops

California LLC Formation Review

Time needed: 5 minutes.

Just to recap, here are the easy steps again when forming an LLC in California. Click on the steps in this list to read the full detail.

  1. Name your California LLC

    The first thing you must do is to choose a company name, which should be unique, easy to find, and available in the state.
    name your llc

  2. Choose a Registered Agent

    In California, it is mandatory to select a registered agent for your LLC. Get a professional Registered Agent from LLC formation services to get things done hassle-free.
    registered agent

  3. File a Formation Certificate

    Filing a formation certificate is necessary when forming a Limited Liability Company in California. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
    articles of organization

  4. File Initial Statement of Information

    In California, LLCs have to file the Initial Statement of Information after 90 days of LLC formation. It is a mandatory document.
    new york llc publication

  5. Create an Operating Agreement

    An operating agreement is not a strict requirement in California but something encouraged when you start an LLC to avoid future conflicts.
    operating agreement

  6. Get an EIN

    The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
    file EIN for llc

Things to Consider While Starting an LLC in the State of California

In this article, I have shared the basic steps to forming a limited liability company in California. However, there are some more things business owners have to keep in mind. The very first thing to consider is the business formation and a name. Depending on the business name availability, you must reserve the name before anyone else chooses it.

Another important point is a business plan. You must have a business plan before you start working on the LLC formation process. Your business plan must include the draft of your LLC details, business licenses you need, annual costs, estimated business expenses, and a lot more.

The next thing to consider is the taxation of the LLC. In California, LLCs have to pay an annual franchise tax which is already mentioned. Now, LLCs do not have double taxation, which means there is no tax on LLC’s annual revenue. However, individual federal income taxes are required to pay. A single-member LLC is considered a sole proprietorship. Hence, it is taxed as a sole proprietorship. No additional taxes are to be paid.

It is already mentioned that you need to get business credit cards. These business credit cards are required for smooth payment and future business funding. Also, it helps you to check your business credit score. If you’re taking loans from any government agency or from banks for small business loans, then your credit score must be in a good position.

As mentioned earlier that business accounts, business accounting software, and other business accounting tools are needed. When you run an LLC, business challenges will come on your way. These are basic requirements to conduct business in California. Apart from that, you need to get a business insurance provider to guide you through. You can explore business insurance companies for your LLC.

Once the LLC is formed, you must be up-to-date with the upcoming filing deadlines, late filings, and other filing services to avoid additional penalty fees. When you file your LLC, you will get a 24-hour expedited filing service, digital filings, application by mail, and in-person filing. You can choose any of these services and pay the complete filing fee.

California state and business law do not require a comprehensive operating agreement to be filed. However, one should have this document for many reasons. An operating agreement generally has details of LLC formation, the entire process of starting your company, and details of the share of members. If you check the operating agreement guide, you will know why this is a crucial step in forming an LLC.

Overall, the formation of an LLC needs quite a handful of work, from tax filings to compliance with state and city government. Make sure to follow the broad steps mentioned above. If you are looking for a professional LLC formation service, then check for the affordable options available.

How Fast Can I Form an LLC in California

California LLC formation takes up to 5 days both via mail or online. Additional payment to the state government can speed up the process.

Whether you are looking to start a business in California or are relocating to the state, there are some key steps to follow. One of these steps is to check the name availability of your business before attempting to form an LLC. You can use the California Secretary of State website to search for available business names. If your name is not available, you will have to pay a filing fee.

An LLC is a flexible entity that offers favorable tax treatment. It protects your personal assets, and it can be used for business purposes. However, there are some tricky government requirements that you must follow. In addition, you need to be aware that the process can be time-consuming. You may find that it takes longer than you initially anticipated to form an LLC. There are a number of ways to speed up the process.

First, check the fee schedule for your state. If your state offers expedited services, you can pay an additional fee to speed up the process. In addition, if you are a mail filer, you will have to account for the time it takes for the state to process your paperwork. If you choose to file your documents online, you may be able to shorten the time it takes to form an LLC.

Next, you will need to file Articles of Organization. These are the documents that state the name of your LLC, how it is managed, and its address. In addition, you will need to include the name and address of your registered agent. Your registered agent will be responsible for receiving and processing court papers on your behalf. Your registered agent can be an individual or a professional registered agent company.

The articles of organization are an important record of your LLC’s history. You should also include a description of how you plan to manage your LLC. It is also possible to file an operating agreement with your articles of organization. An operating agreement is not filed with the state, but it defines the duties of managers and members. You should store your operating agreement with other important business records.

The Statement of Information is also an important document that you should file within 90 days of forming your LLC. This document is similar to the articles of organization, but it is more detailed. It requires you to provide the name of your LLC, its registered agent, and the street address of its main office. If you choose to submit your statement by mail, you will need to provide a $20 filing fee. You may also choose to file your statement online. You can also submit your statement in person.

You should also make sure that you have an Employer Identification Number (EIN) before filing any documents with the state. The IRS allows you to apply online for an EIN. The EIN is free, but some banks require that you provide one. You can find an EIN online or by contacting your local IRS office.

F.A.Qs

Can I file an LLC in California by myself?

If you are a resident of California, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.

What is the cost of forming an LLC in California in a year?

Apart from the formation fee of $70 (domestic LLC) and $70 (foreign LLC), LLC costs in California include $20 for Biennial Reports every 2 years. LLCs are liable to pay sales tax of 7.25% and $800 Franchise Tax every year.

How long does it take to get an LLC in California?

It takes 5 business days to get an LLC in the state of California if you file it online or by mail. This process can be expedited by paying additional fees. If you hire a professional LLC service, then it might take less than that. We recommend TailorBrands, which has an impeccable turnaround time.

How to renew my LLC in the state of California?

Every year all the LLCs have to submit an Annual Report (Biennial Report) and pay $20 to the California Secretary of State and renew the LLC. It is mandatory to renew your LLC every 2 years.

What is the tax structure for an LLC in the state of California?

Generally, for LLCs, it is a default tax structure. Once you obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens. Read more on the California Classification of LLC Tax.

In Conclusion

LLCs are easier to establish than other business structures. Small businesses, especially start-ups can easily start their LLCs in California at a bare minimum cost. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. The formation of limited liability companies requires much lesser documents and legal processes. Share your queries with us, and leave a comment below.

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