how much is it to get an llc in california [With Pictures]

Last updated : Sept 2, 2022

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hello i'm nasa nia and welcome to the community today i want to talk to you about how to form an llc why do i want to talk to you about how to form an llc because that's the process that i'm currently in and it's a multi-step process but it's not difficult i want to tell you first and reassure you you can do it you can do it yourself you don't need to pay anyone to do it please don't waste your money because there's lots of companies that will attorney i'm not offering you legal advice i'm just telling you the steps that i am taking to form an llc what an l what is an llc it's a limited liability company okay so what is that exactly so people get them to provide protection from having their own personal assets taken if there's an issue with the company so it provides you legal protection so maybe your home is not taken if the company's sued or if they um have debt they incur debt it's not your personal debt so that's why they form an llc and that type of business model has some tax benefits as well there's about five or six month business models but that is the llc is the most popular one here in california the other reason why i want to talk to you about my steps in forming an llc are you need to read on your state's secretary's website the steps to form an llc in your state this is i was excited i was gung-ho i was ready to go then i read because i'm a reader and what i found out was unfortunately california seems to be the only state that charges 800 a year whether your small business makes money or not yes you heard right every april you pay eight hundred dollars then i read further because of covet the state given incentive to small businesses to start up they want to stimulate the economy so in order to help with that effort they will waive the first year's fees on an llc 2021 2022 and 2023 yes all i need to do is wait till january then i can file my paperwork is already filled in because i was so excited that my hopes were dashed so what i want to say to you is you can do this please don't pay to have someone else do it you can do it yourself you can do it yourself and read what your state's requirements are the first step is you need an address because you need to put your business address on your form people have gotten super excited about starting their llc and they put their home address on their form please don't put your home address on your form it becomes public record so let's say you were selling goods on amazon and one of your customers became disgruntled they could look up your address and come to your house i would hope that didn't happen but it's possible the other obvious solution you might think of is i'm gonna get a p.o box the state doesn't want you to have a po box they want you to have a real address because they want an address they can serve paperwork to say if someone were to sue and they need an agent for your llc you can be your own agent for your llc or someone else can be your agent for your llc it doesn't mean they're suing that agent just means that person will receive paperwork for your company so don't use your address do get an address here's some advice there are businesses that will allow you to use their address and they put their address a b c d or you know 100 101 102 and so that delineates what business it is that's receiving mail there and they'll even act as an agent for an extra fee and so you can write their name down and you can receive packages or forms there and you need to also have this address when you go to open your business bank account because they want that most banks want your address your legal address for your business a copy of your llc approved and your tax ein number those things make you legitimate so you kind of see the order of the things how it works so first what are we going to do we're going to get a business address we're going to get an agent we're going to file a form to save our name but first before we file that form we're going to google our name we can also check our name out with the u.s patent office to make sure no one else has our name and we can google our name first we're going to google maybe then we're going to check with the u.s patent office and then once we find that no one else has our name we're going to file the 10 form here in california to hold our name for 90 days we don't want anyone else to have our name and operate with our name because that can cause confusion with our customers we want to give our customers the best possible experience right right so we're going to file to hold our name for 90 days then we're going to use that name on our llc paperwork so you say joe smukatelli llc that's how it goes in the form joe smukatelli llc you file that makes it legal so now joe smuckatelli llc is a legal entity see how that works so you made it official by filing your form then they will take receipt of your form within three to five business days and then you can check and they will let you know they received your form but i will link the secretary of state of california's website down below that way you can get a pdf of the llc paperwork and the cover sheet along with the instructions and you can also get that form to reserve your name for 90 days okay that can be filed electronically the llc paperwork cannot i don't know why it just part 2 will come up shortly if that's what you guys would like let me know if this helped you if this was productive for you if you'd like me not to make any more videos just joking as always god bless you

Thanks for your comment Elise Blansett, have a nice day.
- Chauncey Francolino, Staff Member

foreign are you wondering how to start an LLC in California today you will learn the most common ways to start your business including the correct forms you'll need registering your LLC critical naming requirements and all other vital tips and tricks then as a bonus later in the video I will reveal a trustworthy registered agent who will help set up your LLC for free so make sure to stick with me until the end the state of California like other states has several specific LLC requirements there are three main ways you can start an LLC in California first is the DIY or do-it-yourself process where you mostly depend on California state's website the second way is hiring a professional service that practically offers more efficiency and Security in creating your LLC while the third is hiring an attorney we will skip the attorney hiring portion because that's expensive and most business owners won't need that service first let's take a look at the steps required for starting an LLC Step 1 choose a name for your LLC you must choose a name for your LLC that is unique it cannot be the same or too similar to an existing name in the California Secretary of State records and it cannot be misleading to the public names may be checked for availability by searching the California Secretary of State's business name database an available name may be reserved for up to 60 days by filing a name reservation request form the form must be postal mailed or hand delivered to the California Secretary of State's office under California law an llc's name must end with limited liability company or LLC or l.l.c abbreviations the words limited and Company may be abbreviated to limited and Company the llc's name may not contain the words Bank trust trustee Incorporated Inc Corporation Corp insurer insurance company or any other word suggesting that it is in the insurance business Step 2 appoint a registered agent every California LLC must have an agent for the service of process called a registered agent in other states this individual or company agrees to accept legal papers on the llc's behalf if it is sued an LLC may not serve as its own agent for the service of the process the agent should agree to accept the service of process on behalf of the limited liability company before designation individual agents must reside in California and their street address not a PO Box must be listed in the llc's Articles of organization the agent may be a member manager or officer of the LLC but doesn't need to be affiliated with the LLC step 3 file articles of organization a California LLC is created by filing articles of organization form LLC one with the California Secretary of State's office the Articles must include the llc's name its purpose information on how it will be managed its address and the name and address of its registered agent you can complete form LLC one online or mail or hand deliver the form to the Secretary of State's office the filing fee is seventy dollars for both domestic and foreign llc's with hand-delivered filings at the Sacramento Secretary of State's office you can request expedited filing for an additional fee step 4 decide on member versus manager management most small multi-member LLCs choose to be managed directly by their members still LLCs can appoint a manager or small group of managers to manage the LLC somewhat like a board of directors oversees a corporation managers vote on key issues such as taking out a loan purchasing real estate or changing strategic plans step 5 prepare an operating agreement an operating agreement is a good idea to have in place with the other members if your LLC has more than one member although a limited liability company operating agreement is not necessary for California your operating agreement should clarify how your company or business will handle big picture issues such as allocating earnings and losses and dissolving the company your operating agreement should also cover the transfer of membership interest profits or losses and distributions initial Investments decision-making Powers voting rights and management and lastly dissolving the business step 6 file biennial report every California and foreign LLC registered in California must file a statement of Information Form LLC 12 with the California secretary of state within 90 days after filing their articles of organization thereafter a statement of information must be filed every two years biennial the filing period is the calendar month when the original articles of organization were filed in the prior five calendar months you can file the statement online print it out and mail or hand deliver it to the California Secretary of State the filing fee is twenty dollars step 7 pay your California state tax obligations all LLCs and foreign LLCs must pay California taxes to the California Franchise Tax Board FTB if one they are organized in California registered in California or conduct business in California and two they have not elected to be taxed as a corporation that is they are taxed as a partnership or sole proprietorship disregarded entities llc's taxed as corporations must comply with California's corporate tax rules all llc's in California must pay an annual minimum franchise tax of eight hundred dollars LLCs with net income over two hundred and fifty thousand dollars must pay an additional fee based on their total annual income step 8 obtain an EIN an EIN or employer identification number is a federal tax ID issued by the IRS they use your EIN to identify your firm and tax filings readily all California firms pay a business privilege tax and the state requires you to have an EIN to file you may also be required to provide your EIN when opening a bank account or applying for municipal permits or licenses obtaining an EIN is a slightly longer process compared to their previous steps I'm sure you know anything to do with the IRS is confusing first you must have complete knowledge of your LLC such as your company information managing member information business address business information company details and even critical information regarding vehicular assets and federal excise taxes this is another reason why getting a professional registered agent is way more convenient as they can do this for you as part of their service now let's talk about the second option to form an LLC and that is hiring a professional formation service professional formation services do all the steps you should be doing on your own from filing necessary forms to acting as your registered agent you usually have to allocate a specific budget for this option as I already mentioned earlier Inc file is one of the best companies out there to help you form your LLC you can click on the link in the description to get access to this deal Inc file is one of a kind as it offers a free package with services such as preparing and filing your articles of organization well you still have to pay 237 dollars for the state fees which you would have to do anyway if you chose the DIY option but looking at the bigger picture all other companies will still charge their service fee on top of

Thanks be4dum your participation is very much appreciated
- Chauncey Francolino

About the author

Chauncey Francolino

I've studied experimental physics at Elmhurst University in Elmhurst and I am an expert in household archaeology. I usually feel pleased. My previous job was nuclear fuels research engineer I held this position for 4 years, I love talking about axe throwing and knitting. Huge fan of Sean Connery I practice fishing and collect match-related items.