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How to Form an LLC in California

Created by FindLaw's team of legal writers and editors.

If you're considering forming an LLC in California, it's helpful to understand the general structure of LLCs and specific information about California state laws that govern LLCs. This article explains how to form an LLC in California and includes links to relevant statutes and a link to the necessary forms for California LLC formation.

Forms for California LLC Formation

Just like forming a corporation, forming a LLC in California includes the completion and filing of specific forms with the State of California. Fortunately, the process of setting up an LLC isn't that complicated. Get helpful do-it-yourself forms by checking out FindLaw's California LLC Formation Package.

LLCs and Other Business Structures

Before learning how to form an LLC in California, it's important to understand the different types of business organizations to ensure that an LLC is the right choice for your business.

LLC is short for "limited liability company." Limited liability refers to a major advantage that LLCs offer to the owners/members of the company, namely, that such owners/members can't be held personally liable for any court judgments or debts against the company. That aspect of an LLC resembles a key feature of corporations. However, the availability of flow-through taxation to the LLC members resembles a key feature of partnerships. Unlike a partnership, however, there are numerous steps to follow in the process of creating an LLC.

How to Form an LLC in California: Laws at a Glance

Although the basic procedure is similar in every jurisdiction, there are state-specific differences in the laws that govern LLCs. The helpful chart below breaks down the process of forming an LLC in California.

Statutes

California Corporations Code:

  • Section 17702.01 (LLC formation requirements)
  • Section 17702.04 (petitioning courts to require the filing of LLC documents)
  • Section 17702.05 (records of LLC filing documents; certified copies)
  • Section 17702.09 (registration requirements)
  • Section 17702.10 (articles of organization)
  • Section 17708.01 (laws applicable to foreign LLCs)
  • Section 17708.02 (foreign LLC registration)

Naming an LLC

In California, the name of an LLC must:

  • Include the words "Limited Liability Company" or the accepted abbreviated forms "LLC" or "L.L.C.", "Ltd.," or "Co.";
  • Be unique;
  • Not be the same as an existing business or similarly named as an existing business; and
  • Not mislead the public about the LLC's purpose.

You can search California's Secretary of State's Business Name Database for name availability.

The Operating Agreement

It's recommended that you create an operating agreement, which is a legal document that outlines the management of the LLC.

This agreement describes the LLC's operations and the duties of the owners/members and clarifies the financial and working relationships between the owners and the managers.

Filing Articles of Organization and a Statement of Information

Articles of Organization

Before you file the Articles of Organization, you must appoint a registered agent, who agrees to send/receive legal documents for the LLC and who serves as an agent for service of process if the LLC is sued.

You must file the Articles with the Secretary of State. The filing (which includes fees) must include the following information:

  • The LLC name and address of the registered agent;
  • The LLC's purpose; and
  • The management structure (member managed or managed managed).

Statement of Information

You must file this form to keep the state informed about company information. The form must be completed and filed with the California Secretary of State within 90 days of the LLC's formation.

You can file:

  • Online;
  • In-person; or
  • Via regular mail.

After the initial filing, the form must be filed every 2 years in the month during which the original Articles of Organization were filed.

Publication / Notice Requirements

Some states mandate that you give notice of intent to form an LLC, but this is not required in California.

Paying State Taxes and Complying with Tax and Regulatory Requirements

All LLCs and foreign LLCs organized in California, or conducting business in California must pay state taxes to the Franchise Tax Board.

There are other taxes that you must pay for LLCs in their first year of operation and taxes that you will pay annually after the LLC is in operation.

Check with the following for the updated tax information:

Apply for an EIN if your LLC has more than one member, even if there are no employees.

Determine Necessary Business Licenses/Permits

Most California companies are required to have one or more business licenses or permits to operate at the city or county level. Operating without the proper license or permit can result in expensive fines

Note: State laws are always subject to change through the passage of new legislation, rulings in the higher courts (including federal decisions), ballot initiatives, and other means. While we strive to provide the most current information available, please consult an attorney or conduct your own legal research to verify the state law(s) you are researching.

Foreign LLCs

All LLCs organized outside of the state must register with the California Secretary of State to do business in California. If you already have an LLC and want to register it to do business in California, then you will need to form a foreign LLC.

How to Form an LLC in California: Related Resources

Need Help Forming a California LLC? Connect with an Attorney Today

Forming an LLC can be a straight forward process. However, if you have specific questions concerning operating agreements, or have a complex formation issue, then professional legal help is available. Connect with an experienced California attorney to help you get your business off on the right foot.

Next Steps: Search for a Local Attorney

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