California LLC

This guide explains every step required to form and maintain an LLC in California, from naming your business to staying compliant year after year.

1. Choose a Name for Your California LLC

Selecting the right business name is a critical first step. Your LLC name should be unique, memorable, and reflective of your business activities.

Tips for Choosing a Business Name

Define your business concept clearly before choosing a name.
Ask trusted friends or colleagues for feedback and suggestions.
Conduct online searches to ensure the name isn't already widely used.
Check domain name availability for future branding.
Use business name generators for inspiration (but don't rely on them entirely).

Your business name becomes your brand identity, so take sufficient time to make the right choice.

California Naming Requirements

The name must include "Limited Liability Company," "LLC," or "L.L.C."
It must be distinguishable from existing business names in California.
It cannot include restricted words such as bank, insurance, university, or other regulated terms without state approval.
The name must not imply a connection to a government agency.

Check Name Availability

Search the California Secretary of State Business Search database.
Check the U.S. Patent and Trademark Office (USPTO) database to ensure the name is not federally trademarked.

Reserving an LLC Name in California

If you want to secure your name before filing:

Visit bizfile Online on the California Secretary of State website.
Create or log in to your account.
Navigate to Forms → Entity Name Reservation.
Complete the online application.
Pay the $10 reservation fee.

The name reservation is valid for 60 days.

Doing Business As (DBA) in California

If you plan to operate under a different name than your LLC's legal name, you'll need a DBA (Fictitious Business Name).

Common Reasons to Use a DBA:

To introduce new product lines or brands
To receive payments and open bank accounts under an alternate business name

Registering a DBA:

File a Fictitious Business Name Statement with the county clerk where your principal business address is located.
Filing fees vary by county (usually $10–$50).
Most counties require newspaper publication for a set period.
You can locate the correct local office using the CalGold Permit Assistance website.

2. Appoint a Registered Agent

Every California LLC must designate a registered agent to receive legal, tax, and government documents.

Registered Agent Requirements

Must be 18 years or older
Must have a physical street address in California (no P.O. Boxes)
Must be available during normal business hours
If a company, it must be authorized to do business in California

You may act as your own registered agent, but many owners choose professional registered agent services for privacy and convenience.

3. Decide on Your Management Structure

California LLCs can be:

Member-managed – owners manage daily operations
Manager-managed – managers (members or non-members) run the business

Choosing the Right Structure

Member-managed LLCs work best for small businesses with active owners.
Manager-managed LLCs are ideal when some owners prefer passive involvement.

California requires you to specify the management structure in your Articles of Organization.

4. File Articles of Organization

To legally form your LLC, file Articles of Organization with the California Secretary of State.

Information Required

LLC name
Principal office address
Registered agent name and address
Management structure (member-managed or manager-managed)

Filing Fees & Processing

$70 filing fee
Online processing typically takes 5–8 business days
Mail filing can take up to two weeks

Secretary of State Contact

California Secretary of State – Business Programs Division
1500 11th Street
Sacramento, CA 95814
916-653-6814

5. Create an Operating Agreement

California requires every LLC to have an Operating Agreement (written or oral).

What It Should Include

LLC name and address
Ownership percentages
Management and voting rights
Profit and loss distribution
Member responsibilities
Dispute resolution procedures
Rules for adding or removing members

Although it isn't filed with the state, it must be kept with company records.

6. Obtain an Employer Identification Number (EIN)

An EIN is required if:

Your LLC has more than one member
You hire employees
You choose corporate taxation

Apply for free through the IRS website. The application must list a responsible party (an individual, not an entity).

7. Obtain Required Licenses and Permits

License requirements depend on your business activity and location.

Possible Licenses

General business license
Seller's permit (for taxable goods/services)
Industry-specific licenses (construction, healthcare, finance, etc.)
Health, fire, zoning, and signage permits

Use CalGold.ca.gov to identify federal, state, and local requirements.

Operating without proper licenses can result in fines or penalties.

8. Determine Your Tax Classification

Default Tax Treatment

Single-member LLC → taxed as a sole proprietorship
Multi-member LLC → taxed as a partnership

Optional Tax Elections

C-Corporation (Form 8832):

21% corporate tax rate
Possible double taxation

S-Corporation (Form 2553):

Salary subject to payroll taxes
Remaining profits not subject to self-employment tax

Additional California LLC Requirements

Open a Business Bank Account

Keeps personal and business finances separate and preserves liability protection.

Get a Business Credit Card

Helps build business credit and manage startup expenses.

Obtain Business Insurance

Common policies include:

General liability
Professional liability (E&O)
Workers' compensation
Commercial auto
Property and equipment coverage
Business Owner's Policy (BOP)

Annual Compliance in California

Statement of Information

File within 90 days of formation
Then every 2 years
Filing fee: $20

Annual Franchise Tax

$800 minimum tax
Due by the 15th day of the 4th month
Additional fee applies if revenue exceeds $250,000

California LLC FAQs

Name reservation: $10

Articles of Organization: $70

Statement of Information: $20

Annual franchise tax: $800

Online: ~8 business days

Mail: up to 3 weeks

Yes. You may serve as your own registered agent if you are at least 18 years old, have a physical street address in California (no P.O. Boxes), and are available during normal business hours to accept legal documents.

Yes. California law requires every LLC to adopt and maintain an operating agreement internally, though it is not filed with the state.

Yes, but only under strict conditions. A nonprofit LLC in California must be organized exclusively for charitable purposes, have only 501(c)(3) tax-exempt members, and include IRS-required language in its Articles of Organization. It must also file Form 1023 with the IRS and Form 3500A with the Franchise Tax Board for tax exemption.

Yes, a trust can own an LLC in California. You can name your revocable trust as the member in the LLC’s operating agreement, allowing the trust to hold ownership. This setup enables smoother succession planning, as the trust can designate who takes over the membership upon your death.

How to Start Your Own LLC in California