How to Form an LLC in California (2025 Guide)

Starting a Limited Liability Company (LLC) in California is one of the best ways to protect your personal assets while building a legitimate business presence. It offers flexibility, legal protection, and tax benefits—making it a popular choice for small business owners and entrepreneurs.

In this guide, you’ll learn how to form an LLC in California in 2025, including filing requirements, costs, and important state deadlines.

1. Choose a Name for Your LLC

Your business name must meet California’s legal standards before registration.

• It must be unique and not already taken by another business in the state.

• It should include “Limited Liability Company,” “LLC,” or “L.L.C.”

• It cannot be misleading or too similar to an existing business name.

• Check name availability using the California Secretary of State’s Business Name Search.

Choosing a clear and compliant name helps prevent filing delays and rejections.

2. Appoint a Registered Agent

California law requires every LLC to have a Registered Agent—a person or entity authorized to receive legal and official documents on behalf of your company.

• Must have a physical street address in California (no PO boxes).

• Can be an individual California resident or a registered business entity authorized in the state.

• The Registered Agent’s information will appear on public record.

If you prefer privacy or don’t have a local address, you can hire a Registered Agent service to handle this responsibility.

3. File Articles of Organization (Form LLC-1)

This form officially establishes your LLC with the California Secretary of State.

• You can file online, by mail, or in person.

• Filing fee: $70.

• Processing time: About 3–5 business days online or 5–7 business days by mail.

Once approved, your LLC is officially recognized as a legal business entity in California.

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4. File Initial Statement of Information (Form LLC-12)

This form provides updated information about your LLC’s management and contact details.

• Must be filed within 90 days of submitting your Articles of Organization.

• Filing fee: $20.

• File online through the Secretary of State’s website.

This ensures your business remains in good standing and compliant with California regulations.

5. Create an Operating Agreement

Every California LLC is required by law to have an Operating Agreement—even if you’re the only member.

• It defines ownership percentages, management structure, and profit distribution.

• Helps prevent internal disputes and protect your LLC’s limited liability status.

• It’s an internal document—you don’t file it with the state but keep it in your company records.

Having an Operating Agreement shows your LLC is structured properly and operating professionally.

6. Obtain an EIN from the IRS

An Employer Identification Number (EIN) is essential for handling taxes and opening business accounts.

• You can apply for free on the IRS website.

• It’s required for hiring employees, opening business bank accounts, and filing taxes.

• Even single-member LLCs typically need an EIN for banking and permits.

The application process is simple and can be completed online in minutes.

7. Pay Annual LLC Tax and Fees

To maintain your LLC’s active status, you must pay California’s recurring tax and reporting fees.

• Annual Franchise Tax: $800 per year, paid to the California Franchise Tax Board (FTB). This begins in the second year after formation.

• Additional LLC Fee: If your LLC earns more than $250,000 in gross receipts, you’ll pay an extra income-based fee.

• Staying compliant prevents penalties and keeps your business legally protected.

Summary

Forming an LLC in California in 2025 involves several essential steps, but each one is manageable with the right preparation. From choosing a unique business name to paying your annual franchise tax, every requirement plays a role in keeping your LLC compliant and secure.

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