Should you form your LLC in California? We’ve collected the relevant information that will help you make this decision.
- Popular destination for young professionals
- Large wealthy population base
- Minimal disclosure of owners
- High cost of living
- High corporate tax rates and annual minimal fees
- High competition for skilled workers
- Possible stringent regulations at city and state levels
Cost of doing business
- $100 filing fee / $25 periodic report
- One owner is disclosed in the annual statement
Forming an LLC in California
Your official name for your LLC will need to end with one of the following signifiers (or abbreviation of): “Limited liability company”, “LLC”, or “L.L.C.” In addition, it is required that the name of your business is not intentionally misleading to consumers, for any reason. Your company’s new name must also be completely unique, and not deceptively similar to any other organizations name or trademarks. There are also certain restrictions placed on the use of the term “bank” or its variations. Do a FREE name search now.
The owners of an LLC are called “members.” The following information must be required regarding your LLCs members:
- Required number of members
California LLCs must have at least one member or manager listed in their incorporation documents.
- Age restrictions
LLC members in California may be of any age.
- Residence restrictions
There are no residency restrictions imposed on LLC members in California.
- What information needs to be included in the articles of organization?
Outside of the principal member, LLC members in California are not required to list their name or addresses in their articles of organization.
Requirements for the articles of organization
The articles of organization is a document that must be filed to form your LLC in California. It must include:
Registered agent information
All California LLCs must have a registered agent on file and submit their name and physical California address (which cannot be a P.O. Box). This agent will be required to be accessible during standard business hours and acts as the state’s point of contact with the company. Learn more about registered agents in California.
Additional California filing requirements
Initial report deadlines
New LLCs in California are required to file an initial report within six months of incorporation.
Professional service companies are permitted to form as professional limited liability companies (PLLC) as a formal structure.
California LLC taxation and fee requirements
There are several tax and fee requirements that must be addressed by LLCs in California. They are as follows:
All states have complex taxation requirements. Generally speaking, California taxes LLCs based on the success or size of the entity and the tax amount varies between $900-$11,790. For more information regarding taxes in California, it is advised that you visit the state’s official business related website.
Annual report requirements
LLCs in California are required to file a biannual report (referred to as a Statement of Information) every other year during the five months preceding the company’s anniversary month. The cost of this filing is currently $20. The state of California also imposes a Franchise Tax, which carries an $900 minimum, which is due within three months of the company’s incorporation and once a year after that. Learn more about filing your annual report.
Tax identification numbers
California requires an EIN (Employer Identification Number) for all LLCs that will have employees, and most banks will require one to open accounts. California does not require LLCs to obtain state tax ID numbers. Learn more about how to obtain your EIN.
Business license requirements
The business licenses and permits required in California vary wildly depending on the county or municipality where your new LLC is located. If you would like to see more in-depth information on licenses and permits, please feel free to visit the content in our learning library that covers business licenses and permits.