How to Start an LLC in California (2026): Step-by-Step Guide

Published: May 2026 · Updated for the 2026 tax year

Starting an LLC in California is mostly a five-step exercise — until you hit the $800 annual franchise tax and realize it now lands in year one. This guide walks through every step, what a California LLC actually costs (year by year, not just the headline filing fee), how to form one from outside the US, and the deadlines that quietly suspend LLCs that miss them.

A note from Slava

I'm Slava, co-founder and CEO of Jupid. Before this I co-founded and scaled an AI-powered accounting platform to around $30M in revenue and more than 100,000 business users — the kind of company that ends up filing a lot of paperwork in a lot of states and watching customers trip over the same potholes again and again.

California is the state where the potholes are most expensive. The $70 to file your Articles of Organization is the cheap part. The $800 minimum franchise tax — every year, whether or not you made a dollar — is the part most "how to start an LLC in California" articles either bury or get wrong, because they're still repeating the old line that the first year is free. It isn't, not anymore. And almost none of them tell a founder living in another country what they're actually in for.

So this guide does three things the others skip: it adds up the real cost over time, it spells out the non-resident path, and it hands you a dated checklist for your first 90 days so the Statement of Information deadline doesn't catch you. Everything here is current for 2026, with links to the official sources so you can verify before you file.

California LLC at a glance

Sources: California Secretary of State — LLC forms and fees, California Franchise Tax Board — LLC page.

Should you actually form your LLC in California?

If you live in California and run your business from California, you should almost certainly form your LLC in California. The popular advice to "form in Wyoming or Delaware instead" does not help you here: an out-of-state LLC that does business in California has to register as a foreign LLC with the Secretary of State, which means you owe the $800 franchise tax anyway — plus a second set of fees and a registered agent in the other state. You end up paying more for more paperwork.

Forming elsewhere makes sense in a narrower set of cases: you genuinely don't operate in California (no office, employees, or significant activity here), you're a non-resident with no US footprint at all, or you have a specific reason — outside-investor expectations, for instance — that points to Delaware. If you're weighing it, our best state to form an LLC tool walks through the trade-offs, and our Wyoming LLC guide covers the non-resident case in detail.

For everyone else: California it is. Here's how.

How to start an LLC in California, step by step

1. Choose and check your LLC name

Your name has to include "Limited Liability Company," "LLC," or "L.L.C." ("Limited" can be shortened to "Ltd." and "Company" to "Co."), and it has to be distinguishable from every other entity on the Secretary of State's records. Search the California business search before you get attached to anything. Need ideas or want to check a few options at once? Our California business name generator is built for exactly that. If you want to lock a name in before you're ready to file, a Name Reservation Request holds it for 60 days for $10.

2. Appoint a California agent for service of process

Every California LLC needs an agent who can accept legal papers on its behalf. That agent is either an individual who actually lives in California and has a physical street address — a P.O. box won't do — or a registered corporate agent that has a Form 1505 on file with the state. You can serve as your own LLC's agent if you're a California resident; the LLC itself cannot. The agent's name and address become public record, which is one reason people who'd rather not publish a home address (and everyone who lives out of state) hire a commercial registered agent for roughly $100–$150 a year.

3. File the Articles of Organization (Form LLC-1)

This is the step that creates your LLC. File Form LLC-1 online through bizfileOnline for $70. You'll list the LLC name, the agent for service of process, the management structure (member-managed or manager-managed), and the business address. Standard processing is free and usually takes a handful of business days; if you need it faster, 24-hour service is $350 and same-day is $750. Once it's approved, download the stamped copy — your bank will ask for it.

4. Write an operating agreement

California is one of the states that legally requires an LLC to have an operating agreement (it can be oral, but put it in writing). You don't file it with anyone; you keep it with your company records. It sets out ownership percentages, how profits are split, who can make decisions, and what happens if a member leaves. Even a single-member LLC should have one — it's part of how you keep the liability shield intact.

5. Get your EIN from the IRS

An EIN is your LLC's federal tax ID, and you need it to open a bank account, hire anyone, and file taxes. It's free. Apply at irs.gov — if you have an SSN or ITIN, the online application takes a few minutes. If you don't (common for non-resident owners), file Form SS-4 by fax, mail, or the IRS international phone line; see the non-resident section below. Never pay a third party for the EIN itself — the number is always free from the IRS.

6. File the Statement of Information and pay the $800 franchise tax

Two deadlines arrive close together, and missing either one is expensive. File Form LLC-12 (the Statement of Information) with the Secretary of State within 90 days of formation — it's $20, and a late filing draws a $250 penalty plus the risk of suspension. After that, it's due every two years. Separately, pay the $800 minimum franchise tax to the Franchise Tax Board using Form FTB 3522, due by the 15th day of the 4th month of your taxable year. There is no first-year exemption in 2026 — more on the cash-flow trap that creates below.

7. Register for California state taxes and local licenses

Forming the LLC doesn't cover your local obligations. Most California cities require a business tax certificate (a local business license) — look yours up on CalGold. If you sell tangible goods, register for a free seller's permit with the CDTFA. If you'll have employees, register with the EDD for state payroll taxes. And any professional or industry license you'd need as a sole proprietor — contractor, food service, alcohol, cannabis, real estate — you still need as an LLC.

What a California LLC really costs, year by year

Most guides quote "$70 plus $800" and stop. Here's the fuller picture.

Year one

Every following year

The "double $800" trap nobody flags. If you form your LLC late in the calendar year — say October 2026 — the $800 for the 2026 tax year is due by the 15th day of the 4th month of that short taxable year, and the $800 for 2027 is then due April 15, 2027. That's $1,600 of franchise tax inside about six months. Forming in January instead of December changes your cash flow by $800 in the first stretch. If you don't have a reason to file before year-end, wait.

DIY versus a formation service versus Jupid. Doing it yourself costs the state fees and your time. A formation service charges $0–$300 on top of the state fees (the "$0" packages still pass through the $70 + $20 + $800 and then upsell you a registered agent and a "compliance" subscription). Jupid forms your California LLC for free — you pay only the state filing fee — and then handles the bookkeeping and tax filings afterward, which is where most of the ongoing cost and hassle actually lives. To model the annual numbers for your situation, use our California LLC annual cost calculator.

Forming a California LLC as a non-resident or foreign founder

You can own a California LLC without being a US citizen or resident — California imposes no residency requirement on members or managers. The practical hurdles are a California agent, an EIN, a US bank account, and your US and California tax filings.

Registered agent. If no member or manager lives in California with a real street address, you must use a commercial registered agent here. Budget around $100–$150 a year. P.O. boxes and mailbox-store addresses don't qualify.

Getting an EIN without an SSN. The IRS online EIN tool requires the responsible party to have an SSN or ITIN, so foreign founders generally can't use it. Instead, file Form SS-4: on line 7b, where it asks for the responsible party's SSN/ITIN/EIN, write "Foreign" or "N/A" — don't invent a number. Submit it by fax or mail, or call the IRS international EIN line (it's not toll-free), where someone outside the US can get the number over the phone. Check the current Form SS-4 instructions for the right fax number and phone number, since the IRS changes them. Fax turnaround is usually about four business days; phone is immediate. The EIN is free.

ITIN. An ITIN (Form W-7) is a tax ID for individuals who aren't eligible for an SSN. Your LLC gets an EIN; you as an owner may separately need an ITIN if you have to file a personal US return. ITINs are issued with a tax return attached or through an IRS Certifying Acceptance Agent and can take a couple of months.

The Form 5472 obligation — don't skip this. A single-member LLC owned by a non-US person is a "disregarded entity" that generally must file Form 5472 along with a pro-forma Form 1120 every year, reporting transactions between the LLC and its foreign owner. The penalty for missing it is $25,000. Almost no California LLC guide mentions this; build it into your annual calendar from day one.

US bank account. Most US banks want the owner physically present to open a business account, along with the EIN confirmation letter, the filed Articles of Organization, the operating agreement, and a passport. Several fintech business-banking platforms onboard non-resident-owned US LLCs remotely — eligibility and policies change, so check current terms before you rely on any of them. You'll typically need a US business address, which can be your registered agent or a virtual office depending on the bank.

California tax. The $800 franchise tax applies no matter where you live. Form 568 is filed every year, and the income-based LLC fee kicks in on California-source income at or above $250,000. A non-resident member with California-source income may owe California nonresident income tax, and the LLC may have to withhold on distributions of California-source income to nonresident members (FTB Forms 592/592-B). Federally, if the LLC is engaged in a US trade or business, the foreign owner has US filing obligations of their own (Form 1040-NR for an individual, plus the Form 5472 filing above).

Registered agents and the Corporate Transparency Act (BOI)

Your agent for service of process is the person or company designated to receive lawsuits and official notices for the LLC. It has to be a California resident with a physical street address or a registered corporate agent — and because the agent's address is public, plenty of California residents hire a commercial agent purely to keep their home address off the record.

On the federal beneficial-ownership side: under the Corporate Transparency Act, LLCs were originally required to file a Beneficial Ownership Information (BOI) report with FinCEN. That changed. FinCEN's interim final rule, published in March 2025, redefined a "reporting company" to mean only entities formed under foreign law that register to do business in a US state. As of early 2026, that means a California-formed LLC — even one with foreign owners — has no BOI filing obligation. FinCEN has said it intends to finalize the rule, so this could shift; check fincen.gov/boi before you assume one way or the other. (If you register a foreign-formed entity to do business in California, the 30-day BOI deadline still applies to that entity.)

Your first 30, 60, and 90 days

Days 1–7

• Get your EIN from the IRS (free; online if you have an SSN/ITIN, otherwise by fax, mail, or phone).
• Adopt your operating agreement — required by California law, kept with your records.
• Check your BOI status. As of early 2026 a domestic California LLC has no FinCEN filing to make; re-verify at fincen.gov/boi.

Days 1–30

• Open a US business bank account (EIN letter, filed Articles, operating agreement, ID).
• Apply for your city business license — check CalGold; some cities want it within 30 days of starting business.
• Register for a CDTFA seller's permit if you sell tangible goods.
• Register with the EDD if you'll hire (required within 15 days of paying more than $100 in wages in a quarter), and set up federal payroll.
• Get any professional or industry licenses your work requires.
• Look into business insurance — general liability now, workers' comp once you have employees.

Days 1–60

• Set up bookkeeping and a way to track California-source income, so you know whether you'll cross the $250,000 LLC-fee threshold.
• Calendar the two deadlines below.
• If you're a foreign-owned single-member LLC, note the annual Form 5472 + pro-forma 1120 filing.

By day 90 — hard deadline

• File the initial Statement of Information (Form LLC-12), $20. Miss it and it's a $250 penalty plus suspension risk.

By the 15th day of the 4th month of your taxable year

• Pay the first $800 minimum franchise tax with Form FTB 3522.

By the 15th day of the 6th month — only if California income will reach $250K

• Pay the estimated LLC fee with Form FTB 3536.

Common mistakes with California LLCs

Thinking a Wyoming LLC dodges the $800. Why it hurts: if you operate in California, the out-of-state LLC has to register here as a foreign LLC, so you owe the $800 anyway — plus the other state's fees and a second registered agent. Fix: if California is where you do business, form in California.

Missing the 90-day Statement of Information deadline. Why it hurts: a $250 penalty and a path to suspension, which freezes your ability to do business and enforce contracts. Fix: file Form LLC-12 the same week you get your EIN; don't wait for a reminder that won't come.

Forming in December. Why it hurts: you pay $800 for the short current year and another $800 a few months later for the next — $1,600 fast. Fix: unless you need the LLC live before year-end, wait until January.

Ignoring the income-based LLC fee. Why it hurts: once your California-source income crosses $250,000, the fee ($900 and up) is due — and underpaying the Form 3536 estimate adds a 10% penalty. Fix: track gross receipts monthly so the threshold doesn't surprise you mid-year.

How Jupid helps

Jupid forms your California LLC for free — you pay only the state's $70 filing fee, with no service markup and no surprise "compliance" subscription. After that, Jupid is your AI accountant, working in WhatsApp and iMessage the same way you already text. It connects to your business bank account, automatically categorizes your transactions (around 95.9% accuracy), keeps your deductions organized, and prepares your tax filings with CPA review before anything is submitted. For a California LLC, that's the part that actually takes time year after year — the $800 you'll just pay, but Form 568, the income-fee math, and clean books to back it all up are work, and that's the work Jupid does for you. Start your California LLC free with Jupid →

Frequently asked questions

Does California still waive the $800 franchise tax in the first year? No. The first-year exemption under AB 85 only covered LLCs formed between January 1, 2021 and December 31, 2023, and it has expired. An LLC formed in 2026 owes the full $800 in its first year, due by the 15th day of the 4th month of its taxable year.

How much does it cost to start an LLC in California in 2026? The state filing fee for the Articles of Organization is $70. Add the $20 Statement of Information (due within 90 days) and the $800 minimum franchise tax, and a typical first-year minimum is about $890 — before any city business license or registered agent service.

Do I need a registered agent for a California LLC? Yes. California calls it an "agent for service of process." It can be you or another California resident with a physical street address, or a commercial registered agent. The LLC cannot be its own agent, and P.O. boxes are not allowed.

Can a non-US resident own a California LLC? Yes. California has no citizenship or residency requirement for members or managers. You'll need a commercial registered agent in California and an EIN (which you can get without an SSN), and you'll still owe the $800 franchise tax and file Form 568 every year.

Does California require LLCs to publish a formation notice in a newspaper? No. Unlike New York, Arizona, Nebraska, Georgia, and Pennsylvania, California has no newspaper publication requirement for LLCs.

How long does it take to form an LLC in California? Online filings are usually approved within a few business days, but the Secretary of State publishes live processing dates rather than a fixed timeline. Pay $350 for 24-hour service or $750 for same-day if you need it faster.

Official sources

• California Secretary of State — LLC forms and fees (Form LLC-1, $70; name reservation; certified copies)
• bizfileOnline — online filing portal
• California Secretary of State — Statement of Information (Form LLC-12)
• California Secretary of State — expedited and preclearance services
• California Franchise Tax Board — LLC page ($800 tax, income-fee tiers, Forms 568/3522/3536)
• Form FTB 3522 — LLC Tax Voucher · Form FTB 3536 — Estimated Fee for LLCs
• IRS — get an EIN · Instructions for Form SS-4 · About Form 5472
• FinCEN — Beneficial Ownership Information
• CalGold — license and permit lookup · CDTFA — seller's permit · EDD — employer registration
• Related on Jupid: California LLC formation · California LLC annual cost calculator · best state to form an LLC · what you need to start an LLC

This guide is general information, not legal or tax advice. Fees, deadlines, and thresholds change — verify with the official sources above before you file.

Last updated: May 2026.