how much is it to start a llc in california [You Asked]

Last updated : Aug 1, 2022

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Thanks for your comment Flo Fiorino, have a nice day.
- Edna Romasanta, 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 juburuh your participation is very much appreciated
- Edna Romasanta

About the author

Edna Romasanta

I've studied thermodynamics at Montreat College in Montreat and I am an expert in media psychology. I usually feel stressed. My previous job was controller (finance) I held this position for 19 years, I love talking about feng shui decorating and possession. Huge fan of Andrew Garfield I practice trapeze artistry and collect vintage guitars.