California LLC Requirements

Updated for 2026 · Official Secretary of State Website

California is the largest economy in the US and a hub for technology, entertainment, and innovation, but its $800 annual franchise tax makes it one of the most expensive states for LLC maintenance. The low $70 filing fee is deceptive — ongoing costs are among the highest in the nation. Many California-based entrepreneurs form LLCs in other states, though doing business in California still triggers the franchise tax.

Filing Fee

$70

One-time state fee

Annual Fee

$800

Per year

Processing

5-10 business days

Online filing

Deadline

15th day of 4th month after tax year begins

Annual report due

Above Average Cost

Despite a low $70 filing fee, California's $800 annual franchise tax makes it one of the most expensive states for ongoing LLC costs — roughly 10x the national average for annual fees.

Notable Facts About California LLCs

California's $800 annual franchise tax applies even if the LLC earns no revenue
New LLCs are exempt from the $800 franchise tax for their first year (since 2024)
California is the most populous state and the world's 5th-largest economy
LLCs earning over $250,000 owe an additional LLC fee ranging from $900 to $11,790

Tax Information for California LLCs

California imposes an $800 annual franchise tax on all LLCs regardless of income. LLCs with gross receipts over $250,000 pay an additional fee ($900-$11,790). Individual income tax rates range from 1% to 13.3%, the highest state rate in the nation. There is no way to avoid the franchise tax while operating in California.

Formation Steps

1

Choose a Name for Your LLC
Select a unique business name that complies with California naming requirements. The name must include "LLC" or "Limited Liability Company" and cannot be the same as an existing registered business in California.
2

Appoint a Registered Agent
Designate a registered agent with a physical address in California who can receive legal documents and official correspondence on behalf of your LLC.
3

File Articles of Organization
Submit your Articles of Organization (also called a Certificate of Formation in some states) to the California Secretary of State. This is the official document that creates your LLC.
4

Create an Operating Agreement
Draft an operating agreement that outlines ownership percentages, member roles, profit distribution, and management structure of your LLC. While not always legally required, it is strongly recommended.
5

Get an EIN from the IRS
Apply for a free Employer Identification Number (EIN) from the IRS. You'll need this for opening a business bank account, hiring employees, and filing taxes.
6

Open a Business Bank Account
Open a dedicated business bank account to keep your personal and business finances separate. This helps maintain your LLC's liability protection.
7

File Annual Reports
California requires periodic reports due by 15th day of 4th month after tax year begins. The filing fee is $800. Mark your calendar to avoid late fees or administrative dissolution.

Visit Official SOS Website

Annual Report Details

Fee: $800

Deadline: 15th day of 4th month after tax year begins

Annual Franchise Tax ($800) due by 15th day of 4th month (typically April 15). Statement of Information ($20) due within 90 days of formation, then biennially by anniversary date.

$800 Annual Franchise Tax plus $20 biennial Statement of Information. The $800 tax is due every year; the $20 Statement of Information is due biennially.

Need a Registered Agent in California?

Every California LLC must have a registered agent with a physical address in the state. A registered agent service ensures you never miss important legal documents or compliance deadlines.

Compare Registered Agent Services

Frequently Asked Questions

How much does it cost to form an LLC in California?

The state filing fee to form an LLC in California is $70 for the Articles of Organization. This cost is above average compared to other states. Additional costs may include a registered agent service ($50-$300/year) and an operating agreement if you hire an attorney.

What is the annual cost of an LLC in California?

California charges $800 for its periodic reporting requirement, due 15th day of 4th month after tax year begins. $800 Annual Franchise Tax plus $20 biennial Statement of Information. The $800 tax is due every year; the $20 Statement of Information is due biennially. Despite a low $70 filing fee, California's $800 annual franchise tax makes it one of the most expensive states for ongoing LLC costs — roughly 10x the national average for annual fees.

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

Online filing in California typically takes 5-10 business days. You'll need to file Articles of Organization with the state. Processing times may vary based on filing volume and the time of year.

Do I need a registered agent in California?

Yes, California requires every LLC to have a registered agent with a physical street address in the state. The registered agent receives legal documents, tax notices, and official government correspondence on behalf of your LLC.

What taxes does a California LLC pay?

Does California require an operating agreement for LLCs?

While not all states legally require an operating agreement, it is strongly recommended for every LLC in California. An operating agreement defines ownership structure, member roles, and how the business will be managed. Without one, your LLC will be governed by California's default LLC laws.