The Ultimate Guide to Starting a California LLC

An LLC is a business structure that combines the best features of a corporation and a partnership. Imagine having the legal protections of a corporation (meaning your personal assets are generally safe from business debts) with a partnership’s tax benefits and operational simplicity. It’s no wonder LLCs are so popular among California business owners.

California LLC formation requires two separate filings, including Articles of Incorporation and a Statement of Information. However, there are a few things you will need before you can complete the forms.

First things first: you need a name for your LLC that is unique. No two LLCs may have the same name in the same state, so use our California entity search tool to check for name availability. Keep in mind that your LLC business name must include “LLC,” “L.L.C.,” or “Limited Liability Company."

If you’re still in the brainstorming phase, check out our complete guide on finding a name for your California LLC.

A registered agent will receive legal documents on behalf of your LLC. Your California registered agent must have a physical address in the state and be available during business hours. The registered agent could be you, someone in your company, or a professional service.

Next, you must file Articles of Organization (Form LLC-1) with the California Secretary of State. This form includes your LLC’s name, purpose, address, and registered agent information. You’ll also need to pay a $70 filing fee, or $75 for a certified copy. Processing times typically range from 3-8 business days, but expedited service options are available.

California is one of the few states that requires LLCs to create an operating agreement. The good news is that it doesn’t have to be filed with the state. It doesn’t even have to be written down, if you prefer dictation and audio files. In truth, you should create an operating agreement whether it’s required or not. These documents outline your LLC’s management, members’ roles, and decision-making details. It’s like a roadmap for your business operations and can be invaluable for settling any disputes that may arise.

An employer identification number (EIN) is like a Social Security number for your business. You’ll need it for tax purposes, opening a business bank account, and hiring employees. You can get a free EIN from the IRS or use Bizee’s EIN service as part of our standard or premium formation packages.

Within 90 days of forming your LLC, you must file a Statement of Information (Form LLC-12) with the California Secretary of State. This form provides information about your LLC’s managers, members, and business address. It must be filed every two years.

Most people form LLCs for the financial benefits, but they’re also easier to manage than corporations. Generally speaking, you won’t need to hold as many meetings or deal with as much paperwork. You will have more time to focus on running your business, while also enjoying peace of mind and extra tax savings.

One of the biggest perks of an LLC is that it protects your personal assets, even if your business encounters financial trouble or gets sued.

The one big limitation of an LLC is that it doesn’t permit you to issue stocks or shares, making it difficult to raise lots of capital quickly. In California, however, you can have an unlimited number of members or owners in your LLC including different ownership units, or interests.

Here is an easy reference guide to the basic properties of various business entities in California. Need more information? Learn more about forming a corporation in California. 

No Contracts. No Surprises. Only $0 + State Fee to Launch Your Business.