How to Form an LLC in California (2026)

California LLC: An Honest Assessment

We will be straightforward: California is the most expensive state to form and maintain an LLC. The filing fee is reasonable at $70, but the minimum annual franchise tax of $800 — due every year regardless of whether your LLC earns a single dollar — makes California significantly more expensive than any other popular formation state.

Over five years, a California LLC costs $4,070 in state fees ($70 filing + 5 x $800 franchise tax). A Wyoming LLC costs $400. A New Mexico LLC costs $50. That is a difference of $3,670 to $4,020. For a new business, that is real money.

So why does anyone form an LLC in California? Because California is the largest state economy in the US (and the fifth largest economy in the world). If you operate a business in California, hire California employees, or have a physical presence in California, you may be required to register there regardless. California's Franchise Tax Board is aggressive about asserting nexus — if you have California customers, California income, or California workers, they expect you to pay.

If you do not have California operations: do not form here. Choose Wyoming, New Mexico, or any other state. We include California in our services because some clients genuinely need it, but we will always be honest about the costs.

California LLC Costs and Fees

All fees below are sourced from the California Secretary of State fee schedule and the California Franchise Tax Board.

Step-by-Step: How to Form a California LLC

Step 1: Choose your LLC name

Your LLC name must be distinguishable from existing California entities and must include "Limited Liability Company," "LLC," or "L.L.C." Search availability on California Business Search. Name reservation costs $10 for 60 days.

Step 2: Appoint an agent for service of process

California uses the term "agent for service of process" rather than "registered agent." The agent must have a physical California street address and must be either a California resident or a registered corporation.

Step 3: File Articles of Organization (Form LLC-1)

File online at bizfile Online or by mail. The filing requires:

• LLC name with designator
• Purpose (can be "any lawful purpose")
• Agent for service of process name and CA address
• Management structure (member-managed or manager-managed)
• $70 filing fee

Step 4: File Statement of Information (Form LLC-12)

Within 90 days of formation, file Form LLC-12 with the Secretary of State ($20 fee). This requires the names and addresses of members/managers and is a public record.

Step 5: Pay the franchise tax

The first $800 franchise tax payment is due by the 15th day of the 4th month after formation. Subsequent payments are due April 15 each year. Pay through the Franchise Tax Board website.

Step 6: Create an Operating Agreement

California law specifically requires LLCs to have an Operating Agreement (CA Corp Code Section 17701.10). This is one of the few states that makes it a legal requirement, not just a best practice.

Step 7: Obtain an EIN

Apply for an EIN from the IRS using Form SS-4. Standard process.

Annual Compliance Requirements

1. Franchise tax: $800 minimum due April 15 each year. Paid to the Franchise Tax Board.
2. LLC fee: If total income from California sources exceeds $250,000, an additional LLC fee ($900-$11,790) is due.
3. Statement of Information: Form LLC-12 filed every two years ($20 fee). Due within 90 days of anniversary of original filing, then biennially.
4. State income tax return: If the LLC has California-sourced income, file Form 568 (LLC Return of Income).
5. Federal tax filing: Form 5472 with pro forma 1120 for foreign-owned LLCs. Due April 15.
6. Registered agent: Maintain an agent for service of process with a physical California address.
7. FinCEN BOI Report: Required under the Corporate Transparency Act.

California Taxes for LLCs

The $800 Franchise Tax: What You Need to Know

The California franchise tax is the most important consideration when deciding whether to form a California LLC. Here are the key facts:

• $800 minimum, no exceptions: Every California LLC owes at least $800 per year, even with zero revenue
• Due date: April 15 each year (first year: 15th day of 4th month after formation)
• No proration: Form your LLC on December 31 and you owe $800 for that year
• Penalties: Late payment incurs a 5% penalty plus 0.5% per month interest
• Even if inactive: If you form a California LLC and never conduct any business, you still owe $800/year until you formally dissolve it
• Dissolution does not stop the clock: You owe franchise tax for the tax year in which you file for dissolution

Processing Times

Pros and Cons of a California LLC

Our Pricing: California LLC Formation

Every formation package includes:

• Articles of Organization filing with California Secretary of State
• One year of agent for service of process in California
• Custom Operating Agreement (legally required in CA)
• EIN application
• Statement of Information filing (Form LLC-12)
• Digital document delivery within 24 hours of state approval
• Compliance calendar with all filing deadlines
• Dedicated support via email and WhatsApp

Before choosing California, compare with Wyoming ($349 total, $60/year) or New Mexico ($299 total, $0/year). Our state comparison guide has the full breakdown.