Starting an LLC in California: Costs, State Office, Taxes and Timeline

Starting an LLC in California involves two state offices, and the second one sends the bigger bill. The Secretary of State charges $70 to file your LLC. The Franchise Tax Board then charges $800 every year, and the first payment comes due within months of filing.

To start an LLC in California, you file Articles of Organization (Form LLC-1) with the Secretary of State and pay $70. After that, the LLC needs a few more things:

• an agent for service of process in California
• a Statement of Information ($20) within 90 days
• an $800 annual tax to the Franchise Tax Board (FTB), from the first year, whether or not it earns anything

The sections below follow your first year in the order these things usually come up.

Before you file: what it costs to start an LLC in California

So you sit down with a notepad and add up what the state will charge. The $70 turns out to be the smallest part. The state charges four basic amounts for a new LLC. We added them up ourselves from the official Secretary of State and FTB fees:

The Statement of Information is Form LLC-12. The EIN is your federal tax number.

Our calculation: $70 + $20 + $800 = $890. That's the state minimum for the first year. In later years you pay at least $800, plus $20 every second year for the Statement of Information.

These are only the government charges. Other costs are separate:

1. a registered agent service
2. local licenses
3. a seller's permit
4. any professional help

Their prices depend on the provider, the city and the type of business.

Wondering if another state would be cheaper

Once you see $800 a year, you'll probably ask whether California is worth it. An LLC has real upsides here, and real costs too.

Forming in a cheaper state doesn't remove the California tax if the business operates in California. An LLC from another state that does business here owes the $800 as a foreign LLC. It also pays the fees of its home state. The trade-offs between states are compared in Best State to Form an LLC: Fees, Taxes and When Your Home State Wins.

Choosing a name the state will accept

If you decide to stay in California, the LLC name has to pass the state's rules. A California LLC name must include one of these endings:

• "Limited Liability Company"
• "LLC"
• "L.L.C."

You may shorten "Limited" to "Ltd." and "Company" to "Co.". The name also can't contain certain words. These are off limits:

• bank
• trust or trustee
• incorporated or inc
• corporation or corp
• insurer or insurance company

If you aren't ready to file yet, you can reserve a name for 60 days. Reservations can't be renewed back to back.

The state's approval doesn't mean the name is safe to use. The Secretary of State doesn't check names against trademarks or fictitious business names. Its online Business Search is only a first check. So a name the state accepts can still conflict with someone else's trademark.

Choosing an agent for service of process

The form also asks for an agent. California law requires every LLC to have an agent for service of process. That's the person or company that receives lawsuits and official papers for the LLC. The agent must be one of these:

• a California resident
• a corporation registered with the Secretary of State as a corporate agent (a "1505" agent)

The LLC can't act as its own agent.

If you live in California, you can be the agent yourself. But the agent's name and street address appear in the state's public Business Search. So if you list your home address, it becomes public. A corporate agent keeps your home address out of that record.

The two documents: Articles of Organization and operating agreement

The Articles of Organization (Form LLC-1) are a short state form. Once filed, they create the LLC, name its agent and become a public record.

The operating agreement is a separate internal document. It sets the rules between the owners, and you don't file it with the state. Sources disagree on whether California law requires one. Even so, a written operating agreement is strongly recommended.

Filing your California LLC and waiting for approval

You submit the Articles and start checking your email. The Secretary of State publishes a processing dates page and updates it daily. The version dated October 23, 2026 showed this:

1. online LLC formations received October 20 under review (about 3 days)
2. mail LLC formations received October 15 under review (about 8 days)
3. Statements of Information at October 21 online and October 12 by mail

Some guides and Google's AI answer still say online filings take about 10 days. That's longer than the official page showed at the time of writing.

If you're in a hurry, the Secretary of State sells faster service. For most owners, the standard online queue has been short enough. The paid options are these:

1. $350 for 24-hour processing (online or Sacramento drop-off)
2. $500 for 4-hour processing (Sacramento drop-off with preclearance)
3. $750 for same-day processing if the filing arrives by 9:30 a.m.

Drop-off filings carry a $15 special handling fee each. Later you may need a few other filings. Amending the Articles (Form LLC-2) costs $30, and a Certificate of Status costs $5. Cancellation forms are free.

The wait can also end with a rejection. In our work with clients, state filings are usually rejected because the business activity description is vague or incomplete. A precise description of what the company does saves you a resubmission.

Approved: getting your federal tax number

Once the approval arrives, you'll usually need an EIN, the federal tax number. The IRS issues it free. Its online application works only if your principal place of business is in the US or a US territory. The responsible person also needs an SSN or ITIN.

If you're based abroad, you apply by phone, fax or mail. The IRS issues one EIN per responsible party per day. The details are in What Is an EIN (Employer Identification Number)?.

The surprise: one filing doesn't register you everywhere

Many new owners think the approval covers everything. It doesn't, because California splits your paperwork among several offices. Forming the LLC with the Secretary of State doesn't register it anywhere else.

CDTFA is the Department of Tax and Fee Administration. EDD is the Employment Development Department.

The Secretary of State doesn't issue business licenses. Local licenses and permits come from the city or county. The state points owners to its CalGold service to find out which ones apply.

Names work the same way. "Registering a business name in California" can mean three separate filings:

• The LLC name itself is registered with the Secretary of State when you file the Articles.
• A different trading name (DBA) is filed with the county clerk or recorder.
• Many cities require their own business registration.

San Francisco is a useful example. The city requires registration from anyone doing business there. That includes these businesses:

• one with a fixed place in the city
• one that works in the city 7 or more days a year
• one with more than $500,000 in San Francisco receipts

The registration year runs April 1, 2026 to March 31, 2027. For $0 to $100,000 in receipts, the fee is $55 plus a $4 state fee. The city also runs a "First Year Free" program.

If you sell goods, you also need a seller's permit from the CDTFA. Selling without one breaks the law. The only exception is occasional sales of no more than two in 12 months.

The first 90 days: a form and an official-looking letter

Within 90 days of forming, you owe your first Statement of Information. It costs $20. If you miss it, the Secretary of State sends a notice of delinquency and allows 60 more days. After that, the FTB assesses a $250 penalty, and only the Secretary of State can waive it.

Around the same time, a letter may arrive offering to file that Statement for you. It looks official. The Secretary of State warns that mailers like this don't come from the state. In one example, the charge was nearly 10 times the official $20 fee. The state says no business has to use an intermediary.

A few months in: the first $800 California LLC tax

Then comes the $800 bill from the start of this guide. While you researched, you probably saw older articles say a new California LLC pays nothing in its first year. That was true for a short time. A law called AB 85 exempted new LLCs from the $800. It covered tax years beginning on or after January 1, 2021 and before January 1, 2024.

Now the FTB's 2025 LLC tax booklet and its 2026 Form 3522 instructions don't list a first-year exemption. The only exemption left there is for single-member LLCs owned by deployed military members (tax years 2020 to before 2030). The taxes.ca.gov page still shows the old wording, which is one reason the confusion continues.

Planning on a free first year is the most common mistake that costs California owners money. So if you form your LLC in 2026, plan to pay the $800 for the first year.

The tax is due on the 15th day of the 4th month after the taxable year begins. Your first taxable year begins on the day you file the Articles. The FTB gives its own example: Articles filed on June 18 mean the tax is due on September 15.

Say you form your LLC in early summer. You'll owe the first $800 before the end of that year. You pay it with Form 3522. The tax rules are covered in more detail in California LLC Taxes and the $800 Franchise Tax.

When sales grow: the LLC fee on income

If the business takes off, the FTB asks for more. Larger LLCs pay an extra LLC fee on top of the $800 tax. It starts once total California income reaches $250,000. It's based on income, not profit. So a business with high sales and thin margins can owe it even when profit is small.

You estimate the fee and pay it with Form 3536. It's due by the 15th day of the 6th month of the tax year. For a calendar-year LLC, that's June 15. If your estimate is too low, the FTB charges a 10% penalty on the underpaid amount.

Your yearly calendar, and what a miss costs

By the end of the first year, the LLC runs on a fixed calendar. For a calendar-year LLC, it looks like this:

The 4th and 6th months count from the start of the tax year.

Late filings and payments cost money. Besides the $250 for a late Statement of Information, these are the penalties:

• Late Form 568 from a multi-member LLC: $18 per member per month, for up to 12 months.
• Late tax payment: 5% of the unpaid amount plus 0.5% per month.
• Return demanded by the FTB: a 25% demand penalty.

In our work with clients, we regularly see companies dissolved because the owner missed state reports and taxes. Reinstating such a company is often impossible or comes with a large penalty. Some owners end up forming a new company instead. And if the bank isn't told what happened, the business account can become a problem too.

Similar rules exist in other states, as described in LLC Annual Report: Requirements, Fees and Due Dates by State.

An LLC that earns nothing in a year still owes the $800 and still files Form 568. That goes on until a certificate of cancellation is filed. So an LLC you no longer use keeps costing $800 a year until you cancel it. Whether you can deduct the fees on your own tax return depends on your situation. Settle that with your accountant.

Doing it yourself or paying a service

Looking at all these rules, you may wonder whether to pay someone. You're fully allowed to file yourself. The state fees and the $800 tax are the same either way. A service is paid for your time and for help avoiding errors.

For a sense of service prices, LegalZoom lists packages from $0 to $299 plus state fees. A service suits people launching several things at once too. For us, the California filing is one piece of a wider launch that also covers the Google profile and a landing page.

A service can't remove the $800 tax. It also can't move a filing through the state queue faster than the official expedite options. Before you pay anyone, check whether the price includes these:

1. the state fee
2. the agent for the first year
3. the Statement of Information
4. the EIN

If you're running it from outside the US

The table above puts owners abroad on the service side. A non-US resident can own a California LLC, but a few rules affect foreign owners more directly.

The agent must be a California resident or a registered corporate agent. So if you're abroad, you need a corporate agent or a California resident willing to take the role. The EIN can't be done online without a US principal place of business and an SSN or ITIN. So you'll apply by phone, fax or mail.

Under FinCEN's final rule effective August 14, 2026, companies formed in the US are exempt from BOI reporting. Only entities formed under foreign law and registered in a US state must report.

Foreign-owned US companies may also have to file IRS Form 5472. The IRS penalty is $25,000 for each failure to file. It grows by $25,000 for every 30 days the failure continues after 90 days from an IRS notice. So confirm with a tax professional whether the form applies to your LLC. The wider picture for foreign founders is in Can a Non-US Resident Own a US LLC? What It Involves.

What to do this month

If you're about to file, start with the money and the dates. These come first:

• put the $800 in your budget, since the first one is due within months of filing
• mark the 90-day Statement of Information deadline the day the LLC is approved
• choose the agent knowing that its name and address become public

After that, check with your city and county what else you need to register. Ignore any mailer that offers to file state forms for a fee. And if you stop using the LLC, file the cancellation, or the $800 keeps coming. The full tax rules are in California LLC Taxes and the $800 Franchise Tax.