California LLC Frequently Asked Questions

How do I form an LLC in California?

You file Articles of Organization (Form LLC-1) with the California Secretary of State through the bizfile Online portal. The state fee is $70, and online submissions get priority, though a paper LLC-1 can still be mailed or dropped off. You provide your LLC name, business addresses, management structure, and an agent for service of process. Once the state processes the filing, your LLC is active and appears in the public business search.

How long does formation take?

Standard online filings generally process in a few business days, depending on the Secretary of State's workload, which it posts on a processing-dates page. If you are on a deadline, the state offers paid expedite: $350 for 24-hour handling or $750 for same-day service.

Can I form a California LLC from another state or country?

Yes. There is no residency requirement for members or the organizer. The only California-presence requirement is the agent for service of process, who must be a California resident at a California street address or a registered 1505 corporate agent: a requirement a commercial agent service satisfies on your behalf.

Do I need a lawyer to form an LLC?

No. Most straightforward LLCs are formed without an attorney. A lawyer becomes valuable when ownership is complex, partners have differing contributions, or you are structuring investment. A filing service like Mainstay Filing handles the paperwork; an attorney handles legal strategy.

What is the California franchise tax?

Every LLC registered or doing business in California owes an $800 annual tax to the Franchise Tax Board on Form FTB 3522, payable whether or not the business made any money, every year until the LLC cancels. The first payment is due by the 15th day of the 4th month after you file with the Secretary of State. It is separate from your income tax and separate from anything the Secretary of State charges. This is the single most common thing new California owners overlook.

Is there a first-year exemption?

Not for an LLC formed now. The old exemption covered only LLCs formed from January 1, 2021 through the end of 2023, so an LLC formed in 2026 owes the full $800 for its first year. A new law, SB 180, effective July 13, 2026, sets a $400 first-year tax for LLCs whose first taxable year begins in 2027, 2028, or 2029; the second year onward is $800.

Is there an additional LLC fee on top of the franchise tax?

Yes, once total California income reaches $250,000. This LLC fee is separate from and in addition to the $800 tax, starts at $900 for income from $250,000 to $499,999, and rises in tiers above that. It is estimated by the 15th day of the 6th month on Form FTB 3536 and paid to the Franchise Tax Board.

Where do I pay these?

All of it goes to the Franchise Tax Board, not the Secretary of State. Mainstay Filing does not handle franchise tax payments. That obligation is between you and the FTB. We handle the Secretary of State filings.

What is an agent for service of process?

It is California's term for a registered agent: the designated contact who accepts lawsuits and official notices for your LLC. Every California LLC must name one on the Articles and keep one on file for the life of the company.

Can I be my own agent?

Yes, if you reside in California and list a California street address (not a P.O. box); the LLC itself can't be its own agent. The tradeoffs are that your name and address go on the public record and you have to be reachable there to accept service, including being handed a lawsuit in person.

Why do people use a commercial agent?

Privacy, reliability, and (for out-of-state owners) necessity. A commercial registered corporate agent puts a professional California address on the record instead of your home, guarantees someone is available to receive documents, and lets owners without a California address meet the requirement.

How do I check if my LLC name is available?

Use the California business search. Your name must be distinguishable from every other registered entity and must include "limited liability company," "LLC," or "L.L.C." The statute bars words like "bank," "trust," "trustee," "corporation," and "incorporated," and an LLC can't call itself an "insurer" or "insurance company." A $10 reservation holds a name for 60 days.

What is the 90-day Statement of Information deadline?

Within 90 days of the Secretary of State accepting your Articles, you must file an initial Statement of Information (Form LLC-12, $20). After that, California LLCs file it every two years, in a window covering the month the Articles were filed and the five months before. It is biennial, not annual. It updates your addresses, agent, and management. If it's still missing 60 days after the state's delinquency notice, a $250 penalty applies, and the LLC can eventually be suspended.

What is the difference between the Statement of Information and the franchise tax?

Two different things going to two different agencies. The Statement of Information is a $20 informational filing with the Secretary of State (every two years). The $800 tax is a payment to the Franchise Tax Board (every year). You have to keep up with both.

Do I need a business license?

California has no single statewide general business license, but most cities and counties require a local business license or tax certificate, and many trades and professions require separate state licensing. If you sell taxable goods, you also need a seller's permit from the California Department of Tax and Fee Administration.

How is a California LLC taxed?

By default, a single-member LLC is a disregarded entity (reported on your personal return) and a multi-member LLC is taxed as a partnership, with profits passing through to members. You can elect S-corporation or C-corporation treatment with the IRS if it makes sense. Regardless of income-tax treatment, the LLC still owes California's $800 annual tax and, once total California income reaches $250,000, the LLC fee.

Do I need an operating agreement?

California does not require you to file one, but under RULLCA it carries real legal weight and you should have one. It protects the liability shield for single-member LLCs and prevents disputes in multi-member LLCs. It stays private and is never filed with the state.

How do I close a California LLC?

You file dissolution paperwork (typically a Certificate of Cancellation, sometimes with a Certificate of Dissolution) with the Secretary of State, wind up the business, and settle up with the Franchise Tax Board, including any final-year franchise tax. Formally dissolving is what stops the annual franchise tax from continuing to accrue, so do not simply abandon the LLC.