California LLC formation is simple and fast with online LLC formation services at your fingertips
Start forming your California LLC today and manage your company in one place with a free My Account Dashboard. Play the video below to learn how our system makes your life easier.
It can be difficult to figure out which California LLC formation service you should go with, and the process of forming the company can be costly and time-consuming. But not with us. Our online California LLC filing service helps you form your company quickly and easily. The process is straightforward and affordable, no matter the company’s size or budget.
Form your California LLC while saving time and money with our competitive prices, fast turnaround times, and knowledgeable representatives in the industry. We want to be your first choice for all of your California LLC formation needs because forming a company shouldn’t be difficult or stressful!
If you have a great business idea, forming a Limited Liability Company – or LLC is a great way to be recognized formally and also to protect yourself from tax and legal issues. Many entrepreneurs go with the California LLC formation because it can cost a lot less to manage than a corporation and there’s less paperwork involved. The LLC business type can also be ideal for a single-owner business.
Starting a California LLC allows you to organize as a business and start offering your services or products. Many California LLCs are even formed as incubators for business ideas. Whether you’re starting a business now or later, it’s a popular choice for small businesses and future entrepreneurs.
Follow through the steps below to form your California LLC, or save time and let our online LLC filing service file the paperwork for you. Your satisfaction is guaranteed.
Choosing a unique business name is an important first step for your company. Not only should it tell consumers what you sell, but it also needs to set you apart from other businesses to prevent legal and tax problems. Once you have some business name ideas, you’ll want to research them in the major search engines. Avoid using names that show in search results for other businesses. It’s a good idea to have more than one name to research in case your first choice has been taken.
After you have cleared the first sweep on the Internet for your business name, it’s time to run a trademark search with the US Patent and Trademark Office – or USPTO. If you don’t find any issues with your name on their site, you can then check to see if your business name is available with the California Secretary of State. Registering your business name and logo with the USPTO and California Secretary of State Trademark Unit will protect them from being used by other businesses.
The State of California actually has restrictions on business names. For instance, your company name must be unique from all existing LLC names, must include either the words “Limited Liability Company” or abbreviations like “LLC” or “L.L.C”, and cannot be misleading to the public. There are also industries such as Finance, Medicine, and Law that require forming a California Professional Corporation or PC.
Naming your business is really important, but don’t forget your online name! Most businesses find having a website beneficial to keep customers updated on products, news, and events. The market for domain names is highly competitive, and you can find some great domain names for just a few bucks a year. It’s usually a lot less expensive to buy your domain name before someone comes to sell it to you, so it’s worth buying them even if you’re not quite ready to launch your website.
Anyone who is over the age of 18 and has a California physical address can be a Registered Agent. All California LLCs must have a designated Registered Agent to accept legal documents and official government correspondence. Because the address is public record, many LLCs hire a professional Registered Agent to prevent loads of junk mail from coming to their home addresses. You can have important mail forwarded to you, and you don’t have to pay fees or update forms if you move. MyCompanyWorks can manage your California Registered Agent service.
Filing the Articles of Organization makes your California LLC official with the state. Your application and fees will be processed and you’ll be notified when the LLC has been formed. Applications are processed online and by mail. Mail-in applications take longer to process, but you can request expedited processing for an additional fee. Also note that among other states, California is very busy with LLC filings at the beginning of each year, so turnaround times can take longer than usual.
The Articles of Organization for your California LLC must be filed before you can file the Statement of Information form. Once organization paperwork is complete, your new LLC will have 90 days to file the initial Statement of Information with a fee to finish the California LLC formation. All operating California LLCs must also renew their Statement of Information and pay the associated fee every two years.
IMPORTANT: The California Secretary of State website warns that it is your responsibility to select the correct entity when you renew your Statement of Information, and making changes to someone else’s business may result in civil or criminal liability.
We can file your California LLC formation paperwork to ensure accurate filing and quick turnaround. All your documents will be stored in your account dashboard that you can access 24/7.
Applications with spelling errors, improper business names, or missing items cannot be processed by the state. Submitting forms with these problems cause delays in forming your California LLC, so it’s important to take your time when filling out forms. Keep in mind that California does not allow computer-generated signatures or fonts that look like signatures on paper filings, so they all must be signed in person. The only digital signatures allowed are when they are typed in on an electronic device by all members and accompanying paperwork is submitted with your application.
Following Step 1 to clear your business name will prevent delays related to duplicate or similar name submissions.
After your formation documents have been filed with the CA Secretary of State LLC Division, you’ll need to organize your business by having an organizational meeting to collect member contributions, issue member certificates, and form an Operating Agreement that will define how your business will run, be funded, managed, sold, transferred, dissolved, etc. Unlike many states, California law requires your LLC to have an official operating agreement. You’re not required to file it, but you should keep it handy in your company files. The operating agreement serves as the governing guide for your business. An Operating Agreement is included with your MyCompanyWorks LLC package.
Now that California acknowledges your LLC and you have organized your business, you can apply for an Employer Identification Number – or EIN with the IRS. The EIN is like a social security number for your LLC. You’ll need an EIN to hire employees and may need one to open your business bank account. The turnaround time for faxed or mailed EIN applications can take weeks or even months. Save some time and let our team request the EIN for you.
You can open a business bank account as soon as you have your EIN. And you’ll want to get your bank account opened right away to keep business and personal funds separate. Mixing business and personal money can cause a legal or tax disaster for any business, so it’s always best practice to separate business and personal finances from the beginning of your LLC.
MyCompanyWorks Banking Partners can help you open a business bank account. They understand entrepreneurs and small business banking needs, and you may even be able to apply online if you meet their requirements.
You’re in business! If you have followed the 5 steps to form a California LLC, you have successfully managed to register your business, appoint your Registered Agent, organize the LLC and form an operating agreement. You also have your EIN and business bank account, so you’re ready to hire and conduct business. Now all you need to do is schedule recurring fees to stay in business.
California requires an Annual Franchise Tax of $800. the first tax return and payment are due about 4 months after your LLC is finalized. Subsequent returns and payments are due April 15th each year, and depending on the volume of business you’re doing in California, you might be liable for more than the initial $800. All operating California LLCs must pay the Franchise tax. The only exceptions are for businesses that are open less than 15 calendar days in the year they open, and also for LLCs that don’t have any business on the books for a calendar year. Those LLCs would be required to pay the following year.
A new Statement of Information must be filed with updated information and the application fee every two years. The My Account Dashboard is a great place to file all your recurring business paperwork and keep track of the progress. The Dashboard is 100% free forever when you form a California LLC with MyCompanyWorks.
Some of the benefits of forming a California LLC include:
The costs to maintain an LLC in California varies and depend on the size and complexity of the business, the company’s location, and other factors.
The annual Franchise tax is a minimum of $800 and businesses that produce gross receipts over $250,000 pay additional tax, up to $11,790. The fee to file a Biennial Statement of Information is $20 for California LLCs.
You’ll also need to renew your business licenses and permits when they are due. The agencies that issue those documents can tell you the costs and due dates.
Any LLC operating in California must pay the annual Franchise tax minimum of $800 within 4 1/2 months of forming the company and on or before April 15th each year after.
Businesses that sell goods must collect and remit sales tax to the State of California. If you’re collecting the proper amount of sales tax and filing on time, this tax should be a “wash” and not cost your business anything more than the time it takes to file the returns.
California employers are subject to State Employee Withholding Tax and Unemployment Insurance Tax at varying rates.
If you have all the paperwork completed correctly (no digital signatures, all fields completed, and such) and there are no mistakes, you can generally expect to form your California LLC in about 5 business days. However, peak season at the beginning of the year can cause a backlog and turnaround times can get up to over a week. A couple of ways to minimize the time to form your company are filing your documents in person and paying an expedite fee to have the state process your forms without waiting on mail delivery times. If you need your LLC in a hurry, California also offers an optional 24-hour expedite for the fastest service.
Selecting the best tax structure for your California LLC is an important decision and one you shouldn’t make without consulting a tax professional or attorney. There are many factors to consider when you make this decision, so talking with an expert will ensure you’re looking at the entire picture and can make an informed choice.
California does not issue business licenses from the state, but certain professions are required to be licensed to do business. Generally speaking, businesses that require a PC or Professional Corporation are also required to be licensed to operate. Professionals in Medicine, Law, Finance, Construction, Real Estate, Cosmetology, and Security Services are all required to apply for a business license. Check with your county’s government office to learn more about business licensing. MyCompanyWorks can help you order your business license online.
All California LLCs must carry Errors and Omissions, or E&O insurance. Also called Professional Liability insurance, E&O policies help protect your business from negligence and damage claims. If your California LLC has employees, you must also carry Workers’ Compensation insurance. General Liability insurance isn’t required, but California doesn’t cap liability lawsuit rewards, so spending a few hundred bucks a year on a policy far outweighs the risk of being sued without a policy in place to protect money and assets. A California Business Owner’s policy covers general liability, commercial property, and business income. It’s a good idea to consult with insurance professionals to determine the best plan for your insurance policies.
Unless your Operating Agreement has specific instructions, you’ll have to update your Statement of Information with the California Secretary of State to add or remove a member from your LLC. Members can withdraw on their own with a written resignation and are entitled to a portion of the profits and assets upon departure. If the withdrawing member is the LLC’s responsible party, the IRS must also be notified of the change within 60 days of the withdrawal.
Not all members actually want to be removed from an LLC, and it can take some convincing. Another reason to have a solid Operating Agreement is to guide you through matters like these. If you want to remove a member who is unwilling to leave, you may be able to buy out their interest to encourage their departure. If all members of the LLC are unable to come to an agreement about ownership, the company will have to be dissolved.
Before a California LLC can be dissolved, all members should hold a vote to decide if the LLC should be dissolved. You’ll need to document the meeting minutes or draw up a resolution and note the outcome of the vote – unanimous, 50% in favor, and so on. As long as at least half the members agree, you can dissolve your California LLC. If you haven’t conducted any business in the previous 12 months, you may qualify for dissolving by filing a Short Form Certificate of Cancellation with the Secretary of State. Otherwise, the long form will have to be submitted with the managing members’ signatures.
All Statement of Information forms must be filed with the California Secretary of State. Failure to file can result in penalties and may hinder your ability to do business in the Golden State, so it’s important to file these forms in a timely manner. According to the California Secretary of State website, the Statement of Information is due every two years, so you’ll file in even-numbered years if you started your California LLC in an even-numbered year, and odd-numbered years if you started doing business in an odd-numbered year.
You can also avoid the hassle of filing and remembering when to file by letting MyCompanyWorks file Statements of Information for you.
There is no limit to how many California LLCs you can open. Many LLCs are set up to own other LLCs, which protects money and assets from lawsuits and tax issues that might plague your other businesses. Using multiple LLCs to manage separate businesses can also help reduce tax liability, whereas running all your businesses through one LLC will increase its income and tax burden. It’s a good idea to start a new California LLC for each business you operate to keep records and monies separate.
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