You will need to file your Articles of Organization with the Secretary of State of California, which costs $70 online, to start an LLC in California. Applications may be made online, in person, or by mail or fax. The Articles of Incorporation is the legal document that your California Limited Liability Corporation legally produces. To run a company, an LLC can be used, or an LLC can be used to keep your properties such as real estate, vehicles, boats, and aircraft. To build your California LLC today and get your company up and running, follow the steps below.

Start an LLC in California

Are you are wishing to create a California LLC, but don’t have the whole information regarding it? Don’t worry here you will find all. The most important thing that you should consider is whether you are forming a foreign LLC or Domestic LLC. Both the LLC has different circumstance means, if you are wishing to create a new Califrnia LLC then you can form Domestic LLC. If you already have an LLC in another state and just want to set up and enlarge your LLC you can crate a Foreign LLC. You have to fill articles of organization in order to create an LLC in the state of California. The thing you have to do if you want to file your LLC in California is to follow the following steps. These are the steps in California for the filing of an LLC.

Step 1 – Business Entity Search (California SOS)

Those applying for California LLC are encouraged to verify that their preferred name is eligible, and they are prepared to register. A business entity search may be conducted to verify the availability of the name. You can reserve the name of your entity for 60 days by filling in the Name Booking Application. To get the complete naming guidelines & steps to perform the procedure you can check out my article on Business Entity Search

Under California law, the name of an LLC must end with the abbreviations LLC or L.L.C. or Limited Liability Company. The terms Limited and Company can be abbreviated to Ltd. and Co. The name of the LLC does not include the words bank, trust, trustee, incorporated, inc., corporation, corp., insurer, insurance firm, or any other words that indicate it is in the insurance industry.

As you know that this is the era in which online presence is quite more important. To expand your LLC online you have to select a domain name. Your domain name should be the same as the name of your California LLC. You should make sure that you Register the domain name even if you don’t want to make your LLC online.

I Recommend that you have to choose a name that is short and easily searchable by your clients. You have to choose a name that makes you proud. I also recommend that you can choose some more names in options so that if the first name is not available you can use another one. It will become more easy and time-saving if you do so.

Step 2 – Choose Your Registered Agent

Each California LLC is required to appoint a registered agent, the person or registered agent service that receives government correspondence on your company’s behalf, and then forward those documents to you. Individual agents must live in California and must be identified in the organizational articles of the LLC with their street address (not a P.O. box). A member, manager, or officer of the LLC may be the agent, but he does not need to be associated with the LLC.

You could lose your good standing with the state of California without a licensed agent, and the state also has the power to dissolve your LLC if they wish to. The state could fail to warn you of a complaint against your company in a worst-case situation, which could also lead to a verdict against your corporation because you didn’t protect yourself. 

Who can be a Registered Agent?

  • You yourself can be a registered agent for your own california LLC.
  • Anyone from your business can be a registered agent.
  • Your family member or friends can be selected as a registered agent.
  • You can appoint a professional registered agent.

The thing to be followed by the Registered agent

  • You are required to maintain the normal business hours at the address you provide. (9 am to 5 pm)
  • The things like notice, date, and deadline must be reminded to the company by you.
  • You have to make your personal address public if you want to run a business from home.
  • You could be served in front of your family or coworkers.

I Recommend you to select a professional registered agent. If you select a registered agent then he will help you a lot and will solve the queries if any. A professional registered agent is trained regarding each and every situation that takes place in the business so it is highly recommended to use a professional registered agent.

Step 3 – File Articles of Organization

Now, as soon as you complete selecting a name that is unique and complies with all the rules and regulations then the next step is to file the articles of organization. It is a document that will help your company to be set up legally as California LLC. You must see the details carefully and then file for it. There are three ways in which you can apply for your LLC in California that is through the mail, online, or in-person. It is also known to be a legal document for creating an LLC in California officially. I recommend you to check this complete guide for the California Article of organization. I have provided detailed information about filling the article of organization for California LLC. 

You might expect the following things in the articles of organization.

  • Name of the LLC in California
  • Name and address of the registered agent
  • Address of the LLC or principal office
  • The purpose for which you have created your LLC
  • Type of service that you are going to render.
  • Date of dissolution
  • Date of effectiveness
  • Name of each member along with the address
  • Signature of the one filing

Online Filing

If you are wishing to file California LLC through an online portal then, you can fill this form by the way of online by visiting the official website of the government, and there you have to fill the article of the organization. In the same way, you have to provide all the information as required and then you have to attach an amount of $70 filing fee as well as a $15 special handling fee if submitted in person. You have to provide the fees through credit card or e-payment if you are filing through the way of online.

Through Mail or In-person

If you have selected the way of mail or through in-person for filing California LLC then you have to fill out the articles of organization and take out the print of it. Then you have to attach all the required documents and attach the filing fee of $70 filing fee as well as a $15 special handling fee if submitted in person. You have to attach all the documents in the same along with a cheque made out to the secretary of the state. Now, you have to send all the documents to the below-provided address.

  • By Mail ($70): Secretary of State, Business Entities Filings, P.O. Box 944228, Sacramento, CA 94244-2280
  • In-Person ($70 + $15): Secretary of State 1500 11th Street, 3rd Floor Sacramento, CA 95814

I recommend you to select the online procedure for filing the articles of organization. It is one of the easiest ways and time-saving. By using this method you can easily form your LLC from anywhere. If you are not in the state then also you can continue this process. It is one of the easiest ways as compared to that of sending mail or in-person.

Step 4 – File Initial Statement of Information

All the LLC in the state of California have to file an initial statement of information within 90 days of forming your LLC. It is also known to be an annual report. There are 3 ways in which you can form an initial statement of information that is online, mail, or in-person. You also have to file it on a periodic basis that is after every 2 years. You have to mail all the documents to the below address and go to another address for in-person.

What is required in the statement of information

  • Accounting policies
  • Cash flow statements
  • Balance sheets
  • Profit and loss accounts
  • An overview of operations and finances
  • Director’s report Auditor’s report

Mail to: Secretary of State, Statement of Information Unit P.O. Box 944230 Sacramento, CA 94244

Submit In-Person: California Secretary of State Sacramento Office 1500 11th Street Sacramento, CA 95814

I Recommend you to file the initial statement of formation within 90 days of formation. You also have to file the statement every 2 years so that you can ensure that your company will always remain a complaint. It is also recommended to consult the secretary to get more details if you are filing for a new LLC.

Step 5 – Create Your California LLC Operating Agreement

This form is required by law in California that all newly incorporated LLCs draft an operating agreement. This will be the only official document listing the owners of the company records. If you are creating California LLC, then you must file for an operating agreement that will help you as an internal document. LLC Operating Agreement is an internal text, which ensures that you can actually keep a copy of your company documents. It is not submitted to the Secretary of State for California, or to any other department. If you are willing to learn more about the operating agreement then I have provided a detailed guide only for the California Operating agreement. You can have a look and gain more knowledge. 

A comprehensive operating agreement guarantees that all company owners are on the same page and eliminates the possibility of a potential dispute. You have to fill in the following information carefully.

  • Name of the LLC
  • Date of filing
  • Name of the members or parties
  • Name of the person filing the agreement
  • Address of the LLC in California
  • Duration of the LLC
  • Fiscal year
  • Name, percentage of share, and the capital contribution of each member.
  • Officers and relating provisions

I Recommend you to create an operating agreement as it is required by law in the state of California. You have to create one for your future aspect. It is one of the most important documents in terms of internal affairs. It will also help you to manage your California LLC properly without any problem as it will have all the things about the firm.

Step 6 – Get Your EIN

Your California LLC can require an EIN once you complete the LLC filing application with the secretary of state (employer identification number). This unique identification allows the organization to carry out numerous financial transactions, such as opening bank accounts, recruiting workers, and applying for loans. With the PDF Form SS-4, you can apply for free directly online or by mail. With the help of this number, IRS can identify your California LLC as a tax-paying LLC. 

For example, if you want to recruit any workers, you’ll need an EIN, and many banks need them to open business bank accounts as well. For tax purposes, you will also need one, hence the name of the federal tax ID number. Get an EIN via the IRS for your LLC for free. If you are willing to learn more about the Employer Identification Number then i have provided 

I Recommend you to file for your EIN as soon as possible as it is the most important thing that you should get as soon as you complete filling the article of organization. If you don’t have EIN, then you are not able to perform any financial tasks. It is also recommended to file online as it is one of the fastest and simplest processes.

Cost To Form California LLC

It is a must thing that there are different kinds of fees that you have to pay to have anything. In the same way, there are different costs that will occur when you are creating your California LLC. Here I have outline all the kinds of tax that you have to pay for providing you all the information related to it. The cost will depend on the things that you choose and eliminate.

Services
Fees
California Registered Agent
Starting from $39
LLC Name Reservation Fee
$10 for mail & $20 for in-person
Initial Statement Formation
$20
California LLC Domestic Fees
$70 online/paper filings
California LLC Foreign Fees
$70 online/paper filings

The estimated cost for domestic California LLC could start from $139 and it would then depend on how much you spend on your registered agent. The same would be the case for foreign California LLC.

 

California LLC Important Details
The Form
Articles of Organization
Agency
California secreatary of state
The Filing Fee
$90
Registered Agent Fee
Starting from $39
Online Filing
Available

California LLC After Filing Process

As soon as you complete the filing and once your application is accepted successfully you have to start following the steps that are made for after filling the process of California LLC. You have to start filing for the license and the permits regarding the LLC that you are going to form. There are various taxes that you must file in case of working as a legal entity. So follow the following steps in order to manage your Califronia LLC legally and carefully.

License & Permits

You have to follow the Federal, state, and local government regulations. in order to operate your California LLC. You need to get a different license and permission that will depend upon the nature of your LLC. For example, Those creating LLC in California as a restaurant must have health permits, building permits, signage permits, etc. These details regarding the permits will differ from state to state. You will also have to pay some fees that will depend on the type of license you are getting. California includes a business permit as part of registering the corporation that each LLC has to obtain in order to do business. California has a one-stop search at CalGold for any licenses the company may need. You can get started here.

Tax Filing Requirements

You have to pay the tax which will depend on the nature of your business. There are different forms of tax that is required to pay.

Sales tax: If your California LLC is made for selling physical products then you have to file for a Sellers permit through the website of the California division of tax. It will allow the business to collect the tax on taxable sales.

Employer Tax: If you are going to have employees for the California LLC then you have to file for unemployment insurance tax and employee withholding tax through the website of Rhode island taxation.

Federal Tax: The way you pay as an owner will also affect the federal tax. The LLC should report their income every year with the IRS. You can use: Partnership return (Form 1065) and Schedule C (Form 1040).

Hiring Employees

In some of the LLC hire employees so that they can help the firm by contributing their knowledge. Nowadays there are employees in most of the LLC or companies. You have to keep in mind that you have to select an employee that complies will all the rules and regulations provided by the government of the respective state.

  • Verify whether they are allowed to work in the US or not.
  • New employees must be reported as “new hires” to the State.
  • Print compliance posters and place them in visible areas of your workspace.
  • Withhold employee taxes. Use the described method.
  • You must provide the employees with workers’ compensation insurance.

Avoid Automatic Dissolution

Your California LLC can face automatic dissolution sometime if you forget to file any of the tax or permits with the secretary of the state. The government can also dissolve your firm if you don’t comply with the rules and regulations of the government. So, for this instance, hiring a professional registered agent is one of the best options that you can have. The professional registered agent can comply with all the rules and regulations as they are trained properly regarding all the circumstances that could take place in your LLC.

Tip – Separate Your Personal and Business Assets

This is one of the most important tips that you must consider. Whenever you use your personal and business assets together then your personal assets are at the highest risk when California LLC issued. So it is recommended that you have to separate your business and personal assets whenever you create your LLC in California. So, you can do the following things in order to prevent your personal assets. Both of these steps prevent and separate your personal assets and business assets.

  1. Open a bank account for your business
  2. Get a credit card for your business
 

California Foreign LLC Registration

You have one instance that you have to create a foreign California LLC. If you are having LLC in any other state and you want to expand your LLC in California then you have to file for a foreign LLC. You have to fill the form and then you have to ensure that the “mail submission cover sheet” is filled in In this document, you must fill in the correct details, such as name, address, and contact information. The next step is to pay the fees as needed as soon as you complete the application with all the details. By inserting a cheque made payable to the Secretary of State, the state asks you to pay this tax. You may then submit your application by post or in person, with the address given below. A certificate of good standing from the initial jurisdiction of creation should be sent to the individual who is ready to apply for a foreign LLC.

How to Obtain a Certificate of Good Standing

The certificate of good standing means the certificate of good existence in the state of California. It will verify that the entity is legally formed and maintained properly. IF you are forming a foreign LLC then it is important for you to have a certificate of good standing. You must get this from the original state of jurisdiction. You must include this certificate for the following instances.

  • To seek funds from other lenders or any bank.
  • To create a foreign LLC in any other state.
  • For renewing the permits and the license.
How to Dissolve an LLC in California

To know regarding the dissolution of your LLC is also equally important as to know the steps to create your LLC. If in the future you and your partners decide to dissolve the LLC, you have to dissolve it as per the laws and dissolve it legally. If you can’t dissolve it properly then it may lead to penalties and tax that you will not like to pay. So, for dissolving your LLC you have to do the following two things. These two are the thing that must be conducted at the time of dissolving the LLC. For more information, you have to read the California LLC dissolution guide carefully.

  • To close your business tax accounts
  • To file the articles of dissolution

Frequently Asked Questions

1. Is it necessary to have a registered agent?

Yes, it is necessary as he/she will act as a middle person between you and the government and will receive all the financial notice.

2. What is the time taken for filing California LLC?

5 business days online or by mail, but may be expedited for an additional fee. 4–Hour - $500.00 Same Day - $750.00 24–Hour - $350.00

3. What is the filing fee for Creating an LLC?

It is a $70 filing fee as well as a $15 special handling fee if submitted in person.