- Biennial Reports: $20
- Due on LLC Formation Anniversary
- No state business license required, however, check with your local city ordinances, and municipalities
- File Formation Documents with Secretary of State
- Registered Agent
To start a California LLC, you must complete and file Articles of Organization with the California Secretary of State. This formation document costs $0 to file. You can either file by mail, online, or in person in California. The secretary of state requires approximately 5 days to complete the registration of your California LLC.
Filing Times: To better gauge when your LLC Articles of Organization will be processed by the California secretary of state, you can check the secretary of state’s current processing times page. It displays the date which filings are currently being processed.
How to Complete California LLC Articles of Organization
The articles require you to list the following information:
Name of LLC
You’ll need to do a business name search in the secretary of state’s database to find an available business name. California LLCs need to have an ending such as LLC or L.L.C. (if not including the ending will be added).
- Business Address
You can list two different business addresses in this section: the mailing address and the business’ street address.
Agent for Service of Process (Registered Agent)
A California registered agent receives official mail and service of process on behalf of an LLC in California. The registered agent must have a physical address in California where they can physically receive a legal document during normal business hours. P.O. boxes and virtual offices are unacceptable.
Check whether the LLC will have one (a California single-member LLC) or two managers, or whether the members will be the managers. Members are the owners of the LLC. Managers are those appointed by the members to manage the daily operations of the LLC.
Name, date, and signature of the organizer (name of the person authorized to complete the articles).
- Complete the Mail Submission Cover Sheet
If submitting the articles of organization, you must also complete the mail cover sheet. You’ll need to list the contact person’s name, the name of the LLC, and a return address.
After the California Secretary of State processes your filing, your California LLC will be activated.
An LLC formed in California is not required by any state statute or government agency to have or adopt an operating agreement, but if you’re running a business a California LLC operating agreement is necessary.
Operating agreements are an LLC’s governing document which spell out how the entity operates. A solid operating agreement will set how profits and losses are distributed to members, who is a member, what happens should a member want out of the LLC, member or manager responsibilities. This document doesn’t need to be fancy; you could write it out on a barroom napkin if you really want. But spending time creating this document can and will save you from hassles down the line.
Operating agreements for California LLCs also serve a very basic function of serving as proof of ownership. A California LLC can be formed without listing the members on the Articles of Organization, so the LLC operating agreement is the one official document that lists the members and how much of the company each member owns. The California LLC operating agreement is not filed with any government agency, but you may need to provide a copy of the agreement to a bank when you open a checking account or obtain credit on the LLC’s behalf.
LLC center provides a variety of free operating agreements you can use as a template for your LLC.
Employer Identification Number (EIN)
An Employer Identification Number (EIN, FEIN, or Federal Tax ID Number) is a number assigned to a business by the IRS for taxation purposes. Essentially, Federal Tax ID Numbers are the equivalent of a business’ social security number. EINs are mandatory for all businesses that file US tax returns.
If your California LLC will be actively engaged in doing business or will hire employees, you will need to secure an EIN.
Many incorporation services charge to obtain an EIN for a California LLC, however, the number is free to obtain. You can get an LLC on the IRS’ website in a matter of minutes.
Open a Bank Account
Opening a bank account for your California LLC isn’t simply about being able to pay expenses from a business bank account; it’s also a necessary and primary way of separating personal assets from business assets.
Protecting personal assets is the primary reason for forming an LLC.
California Business Licenses
The State of California doesn’t have a general business license requirement for all businesses. However, municipalities and counties in California do have their own requirements. Fortunately, the state has compiled a resource for businesses to see all the permits and licenses they may need.
To see what licenses and permits your new California LLC will have to obtain, visit the California Government Online to Desktops Website (CalGold).
California LLC Statement of Information
All newly formed California LLCs must file a Statement of Information (Form LLC-12) with the California Secretary of State within 90 days of the date the LLC files its Articles of Organization. The Statement of Information’s purpose is to make general information about the LLC available to the public. Foreign LLCs (an LLC formed outside California) that do business in California must also file an initial Statement of Information.
When to File the Statement of Information
The first Statement of Information must be filed with the California Secretary of State within 90 days of the date the California LLC filed its Articles of Organization. After filing the LLC’s first Statement of Information, the LLC must file the Statement of Information every other year during the LLC’s applicable filing period. The applicable filing period is the calendar month in which the Articles of Organization were filed with the California Secretary of State and the five preceding months. For example, if a California LLC filed its Articles of Organization on December 1, 2014, the first Statement of Information must be filed not later than 90 days thereafter and future Statements of Information must be filed every two years beginning July 1st and ending December 31st of each second year (2016, 2018, etc.). This form is required even if the LLC is not actively engaged in business.
How to Complete the Statement of Information
Anyone with authority within the LLC is able to compete this form. During the subsequent filings, if information has not changed, it is possible to check a box under “No Change Statement.” This allows the person filing to skip the majority of the form. Below is a list of the information necessary to complete the Statement of Information.
- Name of the LLC, as recorded with the California Secretary of State.
- LLC number issued by California.
- Name of the state in which the LLC is organized (only required if formed outside California).
- Street address of the LLC’s principal office (not a P.O. Box).
- Mailing address (if different than principal office).
- Street address of the California Office
- For domestic LLCs: address of the office in California that must be maintained under California Corporations Code Section 17701.13.
- For foreign LLCs: address of the principal office in California (not a P.O. Box). Note: This is only required if an address is available.
- Name and address of the chief executive officer, if any. The address may be business or residential.
- Name and address of any managers. If no manager has been appointed, then use each member. These addresses may be business or residential, and may be separately attached to the Statement of Information.
- Name of the agent for service of process in California. An agent is an individual or corporation that resides in California, and that has been designated to accept service of process if the LLC is sued. This agent must have agreed to act in this capacity.
- If the agent is a corporation, the corporation must have filed under California Corporations Code Section Section 1505 with the California Secretary of State. The LLC cannot act as its own agent.
- If an individual, a business or residential address is necessary. A P.O. Box is not allowed.
- Brief description of the principal business activity of the LLC.
- Name and title of the person completing the form.
How to File the Statement of Information
File the Statement of Information with the California Secretary of State by one of the following methods:
Mail: If sent by mail send the form to Secretary of State, Business Entities, P.O. Box 944228, Sacramento, CA 95814.
Hand Delivery: If delivered in person go to Secretary of State, 1500 11th St., 3rd Floor, Sacramento, CA 95814.
Include a check payable to the California Secretary of State for the $20.00 filing fee. No fee is required if the Statement of Information is being filed only to reflect recent changes and it is filed outside the applicable filing period.
The Statement of Information Form LLC-12 is a relatively simple form, but it critically important that every California LLC file the form not later than every filing deadline. We recommend that you create a tickler system so you do not forget to file the initial Statement of Information and the later filings due once every two years.
If you need your California LLC activated fast, you can pay to have the filing expedited for the following fees: Same Day: $750 24-Hour $350. However, the filings need to be delivered in person to the Sacramento public counter. For this reason (unless you have access to a reliable courier) if you need a California LLC filing activated fast, it is recommended that you hire an LLC formation service.