California LLC

What is a California LLC?

A California LLC is formed by filing Articles of Organization with the Secretary of State and paying the appropriate filing fee. A California LLC is governed by its Operating Agreement, which is written and agreed upon by its members, and which lays out the management structure of the company. Each member offers a capital contribution in return for an ownership percentage.

Learn more below about the structure of a California LLC and how one is formed.

California LLC Requirements

1. California Articles of Organization of Limited Liability Company.
2. State Filing Fee of $90 ($70 filing fee and $20 for required Initial Statement of Information).
3. A Statutory Agent located in California. See our service here.
4. Statement of Information
5. Yearly Franchise Tax of $800 minimum.
6. Beneficial Ownership Information Report filing. Report due after LLC formation starting January 1, 2024.

California LLC Structure

CA Limited Liability Companies are structured legally with the California Articles of Organization of Limited Liability Company. Like many states, the document for an LLC is short and simple.

The required information to be listed:

• Name
• Address
• Statutory Agent
• Management
• Purpose Statement

Name

The name as it is intended to read must match exactly when applying for a new LLC in California. According to California Corporations Code section 17701.08, the name of the LLC in CA must include one of the following indicators:

• LLC
• L.L.C.
• Limited Liability Company
• Limited Liability Co.
• Ltd. Liability Company
• Ltd Liability Co.

Words that are not aloud in the name are bank, trust, trustee, incorporated, inc., corporation, corp, insurer, insurance, company, or any other name related to insurance services.

Address

You will enter the California LLCs complete street address, including city and zip code, of the initial designated office in California. This office is where the organizational documents, operating agreement and other business records are kept. This address does not have to be the place of activity in California. A popular choice for this address is the Statutory Agents address in California.

Statutory Agent

The Statutory Agent or Registered Agent can be a person residing in California or a Corporation doing business as an agent. This is called a Registered Corporate Agent. The agent will accept any process of service or other important legal documents. This is a required service to open an LLC in California or any other state, although the title of the agent may vary from statutory to registered to resident agent.

Manager Statement

Indicate how the LLC will be managed. Manager(s) or Member(s). The LLC must have at least one member. A member is an owner of the LLC, like a shareholder is an owner of a Corporation.

How to File a California LLC

Steps in forming a California LLC:

1. To start your LLC in California, you file Articles of Organization with the Secretary of State. There is a $90 filing fee (the $70 state filing fee plus a $20 fee for the Initial Statement of Information).
2. The name of the limited liability company must conform to state law.
3. When submitting Articles, a registered agent must be designated to accept service of process on behalf of the company.
4. After filing, all entities must file an initial Statement of Information within 90 days.

Additional Resources: 

How to Start a California LLC
How to Form an LLC in California (paper filing)

California Limited Liability Company Info

Operating Agreement

When you start an LLC, you need to write an operating agreement, which is the document that governs the ownership of your LLC and how it will operate.

An operating agreement should outline (at least):

• Initial members and their membership percentages (how much of the business they own)
• Allocation of profits and losses
• Voting rights
• Responsibilities of members and managers
• Management structure (member-managed or manager-managed)
• Amendment process

When detailing how your business will be managed, keep in mind that the members can oversee the business themselves, or you may appoint a manager or managers to run the LLC. Managers are not required to be members, and members are not required to serve in any managerial capacity (unless the business is run by its members).

Make Amendments to My Articles

Yes. LLCs submit a SI biennially (every two years) during the anniversary month of their formation. For an entity formed in October, the appropriate date to submit the SI is in October. Amendments are made on this form. There is a $20 charge.

The SI can be filed at any time, however, to make changes such as a alterations to your registered office address. There is no fee if an SI is filed outside of the normal filing period.

Biennial Reports and Taxes

After your formation, you must file an initial SI within 90 days. After this, LLCs file SI’s every two years in the anniversary month of formation (if your LLC was formed in June, you file your SI in June). Failure to submit your company’s SI will result in penalties and the possible dissolution of your limited liability company.

LLCs are pass-through entities, and members must pay taxes on all profits on their own individual tax returns. The state income tax rate ranges between 1.25% and 10.55%.

There is also a yearly Franchise Tax of $800.

Advantages of a California LLC

1. Thriving Economy. Only a couple other states (New York, Texas) have economies in the same range as California. When you form a California LLC, you will be starting a business in a state that has a larger economy than the entire country of Russia. It’s 2015 Gross State Product was the largest in the nation. California is the number one state for venture capital, the number one state for attracting foreign investment, and has a diversified business sector, from biomedical to high tech to high-wage services to entertainment.
2. Simpler Business Structure. California LLCs are simpler in their structure and management than corporations. There are fewer formal requirements, such as a Board of Directors and annual shareholder meetings, as well as fewer reporting requirements. A California LLC is simpler to operate. You can literally make major business decisions at the kitchen table. A California LLC is ideal for a small, family-run business.
3. Educated Workforce. A California LLC can draw upon a highly educated workforce within the state. In 2015, California’s high schools ranked second overall in a US News evaluation of the nations schools. California is home to nearly 400 colleges and universities, and the State has teamed with the business community to invest heavily in a range of industries, especially biomedical and technology. No other state has a workforce better educated than California.

Federal Beneficial Ownership Information Report Filing

As a newly-formed LLC, you’ll probably need to submit a Beneficial Ownership Information (BOI) Report to the Financial Crimes Enforcement Network (FinCEN). The BOI report provides the federal government with basic information about your LLC and the people with the most power over your business decisions and profits. Starting January 1, 2024, this report is due after company formation. This report is a little complicated, but we can make filing painless with our $25 BOI report filing service.

Why Hire Corporate Filing Solutions to Form Your California LLC?

Starting your LLC in California shouldn’t be a hassle or a time consumer. That’s why we offer Filings Made Easy™ to make starting an LLC in California super easy.

Hire us and relax while our filing experts form your new California LLC. Our staff will process orders the same business day as they are received. To make things even easier, we bundle the first year of Statutory Agent service and ensure your California LLC comes fully equipped and ready to do its job.

Start your LLC in California and get Statutory Agent service for as low as $55 a year!