California LLC – How to Form an LLC in California

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California LLC: Learn how to form an LLC in California in just a few steps. Get the information you need to create a California limited liability company online.

California Limited Liability Company

Are you looking for information on how to create an LLC in California? The state will require you to file formation documents. These legal documents can be handled by our filing service. We’ll also show you how to do it.

LLC California Summary – To form a California LLC, you’ll need to file your Articles of Organization with the California Secretary of State; this costs $70. You can apply online, in person, or by mail or fax. The Articles of Organization is the legal document that officially creates your California limited liability company.

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LLC California Formation Process

Choosing a name is the first step in starting a California LLC. Check to make sure the name you choose is not already registered to another owner. All state guidelines must be followed when you register your name. California LLC names must not be vulgar or contain words that could mislead the public.

Next, find an agent to serve process. Fill out the paperwork such as your Articles of Organization, and Statement of information. These forms provide basic information to the state of California about your company. This includes who is involved, where you are located, and what kind of business you are in. These forms will help you move forward with your company. California also requires that you create an LLC operating arrangement. This document details how your business will run.

Finally, you will be registered with the IRS and can apply for any licenses, permits, or insurance policies required by your industry.

California Business Resources

Six Steps to Forming a California LLC

In six easy steps, you can form an LLC within California. You will also find other useful information to help you set up your LLC for success.

These guidelines can be used to start a domestic LLC. This is an LLC that was established in the state where you reside. Foreign LLCs are those that were created in another state. You will need to complete a registration form for a foreign LLC in California and follow a different procedure.

Get your LLC started in California

  • Step 1: Name your California LLC

Name Search: California Secretary of State – Business Programs Division

Name Search

Name Reservation: Optional
Suffix: A limited liability company’s name must include the words limited liability or the abbreviation L.L.C. LLC. Limited can be abbreviated to Ltd. and company as Co.

CCC §17701.08

Creating a California LLC is the first step in starting your business. LLCs are more common than sole proprietorships, which typically have the same name as their owner. However, they often choose to use branded company names.

Your brand’s name is a key part of how people perceive you. It’s crucial to make the right choice.

California Limited Liability Company Name Requirements

In California, LLC formations require that you include Limited Liability Company or the abbreviations L.L.C. or LLC in your formal name. You can also change the abbreviations of “Limited” and “Ltd.” to “Co”

To ensure that you are following all rules, make sure to read the state’s naming guidelines. These are some of the guidelines:

  • Avoiding profanities
  • You should not use an already registered name or one that is confusingly similar to one already in use.
  • Avoid using names that could mislead people
  • Avoid using names that sound like a government agency (such as “police”, “county,” or “state”)

Register a Business Name

It is important to ensure that your preferred name has not been taken elsewhere in California. You can use our California business search to assist you. You can reserve your name if you discover that it is available, but not yet ready for Articles of Organization to be filed with the state of California. Our business name reservation system will not only reserve the name but also do a search for the desired name to ensure it is available.

California Fictitious Business Name (FBN)

You might also want to look into a California FBN number. When registering under a different name, some businesses use an FBN (or “fictitious company name”) to register. This is also called a doing business or DBA in other states.

A company may use a DBA name for many reasons, including introducing a new product line.

Filing for fictitious names will save you the hassle of registering your company with California every time you wish to do business under another name.

FBNs in California are not registered at the California Secretary Of State’s office. They must be registered at the local level. The FBN must be filed in the county where the business is located. You will need to obtain the required forms from the county clerk.

Register your company’s name or logo as a trademark

Protecting your company or DBA by registering a trademark within California can help you protect it from being used in other states. Even if you are a new LLC, a brand logo or trademark for your company can be a benefit to your business. A trademark is a mark that can be placed on the name of your business or brand to prevent it from being stolen or copied by other businesses. This helps protect your intellectual property and provides you with legal protection in case of copyright infringement.

Intellectual property is a key component of forming a California LLC.

  • Your brand name
  • Your logo
  • Inventions
  • Written or artistic works

A trademark is a right you have to use certain words and designs. If others copy your work or duplicate it, they are infringing. It also means that another company cannot use your trademark name.

The Secretary of State’s website has more information about California’s guidelines. It doesn’t matter if you are interested in applying for your trademark or not, it is a good idea to search the California trademark registry to ensure that your business name isn’t already trademarked.

To the same extent, you will want to check the U.S. Patent and Trademark Office database to ensure that your name is not federally trademarked. You can register your name on the USPTO website if it is available. This process does not provide immediate protection but can offer greater protection for those who plan to do business outside California.

Register a trademark for California

California allows you to file for trademark registration for $70 per “classification number.” Online and in-person drop-offs are marked with the date and time they were received. Mail submissions should be marked by 5 p.m. on the day they are received.

After approval, you will be given a copy for free. A certified copy can be requested for a fee. Find out more about trademarks at our trademark copyright page.

Register a domain for your LLC

Register a website domain so potential customers can find you online. To check if the domain name you are interested is available, you can do a quick domain name search, and then we register it.

Our online services can help you with naming your company and other filings. We offer a variety of affordable options to help you set up your business. This allows you to spend more time on growing your business.

Does your California LLC name have a web address?

You should also consider whether the desired name is available as an URL. Your website will be easier for customers to remember if it can be used as a domain.

You can also check to find out if the desired social media handles have been added. Today’s business owners can use social media platforms like Instagram, Facebook, Twitter, and Facebook to market their businesses. Your branding strategy can include naming the right social media accounts.

  • Private receipt of potentially embarrassing paperwork (for example, legal action taken against you).
  • You can move your office without updating your registered agent address with the state
  • You can be assured that your notifications will arrive on time and are dealt with promptly.

Step 2: Appoint a California Registered Agent

Next, appoint a California registered agent for the service of process.  A registered agent is a person or entity that is designated to receive legal notices (such as subpoenas and official correspondence) on your behalf.

Registered Agent Requirements

California’s requirements for agents for service of process are:

  • A resident of California, or a company authorized by the state to do business there.
  • California residents must have a physical address for mail (not a P.O. Box)
  • You must be over 18 years old

You can appoint yourself or another employee to act as your agent. Or, you can hire someone outside to do this job.

What happens if there is no California registered agent?

Your business may be out of compliance if the state fails to contact you when it sends legal notifications. It is important to keep your registered agent available.

Several situations in which contact can be lost easily include:

  • If your agent is not in the office (for instance, sick, out of town) When contact is attempted
  • If your agent leaves or moves, and you forget to update the paperwork (or address) with the state,

California could dissolve your LLC if you fail to register an agent for service of processes (also known as a registered agent in some states). You could lose your liability protection, which was most likely the reason you created an LLC.

A process server may not be able to notify you about a lawsuit if your agent for service information (such the physical address) isn’t up-to-date. A court case against you could be filed without you knowing.

Registered Agent Responsibilities

  • Notification of any legal action or lawsuits against the business
  • Responsible for transmitting any information to the correct people at your LLC
  • Receive service, you should always be available during business hours
  • Accept important mail from the government

Step 3: File California Articles of Organization

Agency: California Secretary of State – Business Programs Division
Form:
Form LLC-1 – Articles of Organization of a Limited Liability Company
Instructions:
Filing Tips
Filing Method You can mail, in person, or online.
Agency Fee: $70 via mail/online, $85 in person
Turnaround: Current State Processing Times or Pay for Preclearance and Expedited Services
Law:
California Corporations Code Title 2.6: Limited Liability Businesses

Next you will need to file your California Articles of Organization. This form details the contact information and who is involved in your LLC. California LLCs must have Articles of Organization.

California, unlike many other states, requires that two forms be completed in order for your LLC to be formed. The Articles of Organization are first. The Statement of Information is next (which we’ll discuss in the next step).

What should you include in your California LLC Articles of Organization

California LLC Articles should contain:

  • Your business name and address
  • Contact information
  • Information about your agent to serve the process.
  • Your LLC can be either member- or manager-managed
  • Signed by the organizer

Many LLCs are member-managed. This means that all owners share in the management and running of the business. A manager-managed LLC is where the members nominate one or more managers to run the business. These managers can be hired from the outside or as members of an LLC.

Manager-Managed or Member-Managed?

The management structure of your LLC is an important step in California’s startup process. Your LLC will be managed by members/owners (member-managed), or by an outside/hired manager (manager-managed).

Because they have only one or a few owners, many LLCs choose member-management. It is common for LLC owners to choose member-management as they are responsible for running the day-to-day business operations. Each owner shares in the management of the business and make decisions.

Others prefer to hire or appoint a manager. Manager-managed options allow one or more LLC members to be appointed to manage the company. Or, someone outside of the LLC can be hired.

When some members are only interested in being investors, manager-management can prove to be beneficial. It can be easier for LLCs with many members to have a manager, as it is difficult to bring all members together to make decisions.

 

You can file paperwork online, by mail, or in person with the California Secretary Of State

California doesn’t charge filing fees for submitting Articles of Organization. There may be an additional fee for filing paperwork in person. In-person filings will be processed quicker than mail or online submissions and are therefore considered expedited. In-person filings may incur additional fees.

You may want your paperwork expedited or pre-cleared to meet a time frame. Next-day approval is available. The Sacramento office public counter will accept the paperwork by mail or in person. These services are not offered at the Los Angeles Secretary Of State location. To speed up the LLC formation process, we also offer a fast-filing speed service.

You should prepare for the formation of an LLC in California using applicable forms for expedited and pre-clearance services.

  • Pre-clearance services are “Offer a customer the option to present a business entity documentation in person to Secretary of State’s Sacramento Office prior to filing to determine whether the document is compliant with law and receive a preclearance response within an agreed time frame.”
  • Expedited filing: “Offer a customer the chance to file a business entity documentation in person at the Secretary of State’s Sacramento Office and receive a filing confirmation/filing response within a certain time frame.”

For expedited processing in California, you can file in person

The expedited timelines will be granted as soon as the paperwork is received. If you submit the 24-hour preclearance form Tuesday noon, your preclearance will start Wednesday noon.

All expedited paperwork must contain:

  • The file that you are submitting. All parties involved must sign the file. This file will be delivered personally to Sacramento’s California Secretary of State. The state will not accept digital signatures.
  • A copy of your preclearance response
  • The complete filing fee
  • The entire expedited fee (this must be a separate check, and will be deposited even though your request has been rejected)
  • Note and/or instructions regarding your requested class. Also, specific filing dates if applicable.
  • Notification upon filing response (How do you wish to be notified?
  • For a point-of-contact, the name and number of the person.

As long as you follow the correct protocol, filing your Articles of Organization can be completed quickly. If you need a fast turnaround or have specific dates to form an LLC in California, this option is for you.

The Articles of Organization can usually be approved within seven days, without the need for expedited or prior-clearance services.

Why should I delay my California LLC registration date?

New entrepreneurs often delay filing their LLC paperwork to save taxes and avoid paying more. They delay filing their LLC paperwork until January 1, the next year.

By doing this, they can also avoid paying taxes for an LLC during the current year. This is especially true for future LLC owners who don’t have to set up the company immediately but want to delay paying the $800 California franchise tax fee.

If the California Secretary of State approves your filing it will become effective on the date that you submit it. This is true even if the state takes longer to review your filing and marks it as filed. This means that even if your filing is submitted on July 1, the state won’t approve it before July 30, your LLC effective day would still be July 1.

You can also tell the state when you would like your effective date to occur. Your LLC can have its effective date extended up to 90 days after the filing date.

We can also help with this. We offer the option to delay your LLC’s effective dates by charging an additional fee when you create your LLC in California. This service is not available from October through January.

 

Your California Limited Liability Company documents can be digitally stored

After you receive your paperwork from the state to approve your California Limited Liability Company, it is important that you keep it safe with all your other important documents such as your LLC operating agreements, member certificates and contracts, compliance checklists and transfer ledgers.

Step 4: File the California Statement of Information

Submit your California Statement of Information. This is the second step in the initial paperwork for your LLC’s formation in the Golden State. This step is not only for filing the Articles of Organization.

To retain your LLC’s name and status with state, you must file your Statement of Information within 90 days.

You can also file a Statement of Information with the California Secretary of state online or in person. The filing fee is included.

Each entity can be updated via the California Secretary Of State’s website. It is important to ensure that you deal with your LLC. The state can prosecute you for accidentally changing the business.

Remember that your Statement of Information will be a public record when you file it.

Biennial Report

The Statement of Information must be renewed every two years as long as your business continues to operate. This type of reporting is called an annual or biennial report in other states.

Renewing California LLCs is possible if you file within the time frame that you have set. You will need to attach an attachment to your Statement of Information if you have more members to your LLC. This can be added to the original paperwork without additional charges.

Here are some tips to get your application approved

According to California’s state business website, a significant number of applications can’t get processed because of typographical errors, problems with applicants’ business names, or missing items in the applicant’s Articles of Organization. These errors could slow down or stop your LLC completion.

Name Reservations

Check to make sure that your business name is not already registered. If your name is already in use, it will result in your application being denied. You will need to start over with a different name. This simple error won’t slow down your application.

Electronic Signatures

California has clear guidelines regarding what constitutes a legal electronic signature. Although typing your name into an electronic device to sign is acceptable, you will need documentation to confirm that electronic signatures were used and that all parties have signed digitally. The Secretary of State’s website states that electronic signatures are only accepted for filings with the Secretary of the State. Computer-generated signatures and fonts that look like signatures printed on paper filings will not be accepted.

You can’t also digitally sign paperwork or print it to speed up filing. All paperwork that is printed on paper should be signed by the LLC members. This is especially important when you are dealing with distant members. Only paper copies are accepted at the Sacramento state office. If you are not within driving distance of the Secretary-of-State location, these can be sent by mail.

Step 5: Create an operating agreement

The California operating agreements outline the rules and operating procedures that will be followed by the LLC. They are similar to the bylaws for corporations. Information such as the following should be included in your operating agreement:

  • Members can admit more members
  • A description of the terms and conditions of the business
  • How the business will run and managed
  • If there are any circumstances under which one or more members cease to be members, the LLC will dissolve.
  • Plan of succession to be used in the event of the death of a member. The agreement can also specify what happens to their share of the business.

California law requires that LLCs have an operating agreement, unlike in other states. Your California operating agreement can be a valuable resource in times of need. It is important to keep it in writing and to update it when your business grows.

California LLC Operating Agreement

California is the exception to this rule. While most states don’t require LLC operating agreements for their businesses, California does. An operating agreement can be beneficial for your company for many reasons.

  • Help to preserve the limited liability aspect in your limited liability company before the courts
  • Disputes between LLC members can be settled
  • Clarifying ownership of the business structure
  • Proving legitimacy to financial institutions, the state and the federal government

California requires this document to be filed for even single-member LLCs.

California requires you to have an operating agreement. However, it is not mandatory that you file one. You should keep it with your company’s files in case you need it. The operating agreement can be used to guide you in the event of a dispute between LLC members, or changes in industry standards.

Do I have to sign an operating agreement if my only owner is me?

Operating agreements are a great way to avoid disputes between LLC members. However, it is not the only reason to have one. Even single-member LLCs can reap the benefits of operating agreements.

They are required for all LLCs registered in California. Potential investors, future business partners, as well as others, may be interested in your operating agreement.

Many banks won’t allow you to open a bank account for your business without one. An operating agreement will outline what happens to the business in the event of your death or incapacitation.

Sometimes, an LLC owner will be taken to court by someone trying to prove that the LLC and owner are one entity. This allows them to pursue the owner’s personal property. An operating agreement is a way to show the court that the LLC owner and LLC are distinct if this happens.

Step 6: Apply for an EIN

 

Agency: Internal Revenue Service (IRS).
Form:
IRS Form S-4
Filing Method You can send mail, phone, fax or online.
IRS fee $0
Turnaround: Online or over the phone, immediately. 4 business days via fax. 4-5 weeks via mail
Notes: Only certain hours are available for the IRS website. Before closing your session, print your EIN. For more information, please refer to IRS Pub 1635 Understanding Your EIN.

The tax ID number for your LLC is an Employer Identification Number (EIN). This number is commonly known as the Federal Employer Identification Number, (FEIN).

Your EIN is your company’s identification to the Internal Revenue Service (IRS), just like your Social Security Number identifies you with the federal government. Your EIN will be used to file your business taxes in the same way that you use your Social Security Number for personal taxes.

EINs are required for employees to be hired and allow you to open a bank account.

Your California Limited Liability Company can obtain its EIN online, by mail or fax from the Internal Revenue Service. Do you not want to deal directly with the government agency? We can help you. The EIN service eliminates all the hassle.

California LLCs should open a bank account to fund their business banking needs

Once you have obtained your EIN, opening a bank account in your LLC will be possible. It is important to separate your business and personal banking. This will prevent funds from commingling and allow you to better understand your finances in tax time.

Note: Business credit cards are also available. You can use a business credit card to pay company expenses. This allows you to separate your personal and business finances.

Commingling funds can also make tax filing more complicated. You could be sued for your personal assets if someone challenges the separation of your LLC and you. Having a separate bank account for the LLC helps to establish that the LLC is legal and independent.

We offer a discount bank account in conjunction with LendingClub for your new LLC. This account allows unlimited transactions, online banking, and a debit card. To make it easier, you can use our banking resolution template if you need to authorize others to use your account.

What is the cost of starting an LLC in California?

Forming an LLC costs $70 to file the Articles of Organization at the California Secretary of State.

Is there an annual fee for an LLC?

Each year, a $20 Statement Of Information fee and $800 Franchise Tax are required to renew a California LLC.

What is the average time it takes to create an LLC in California

The approval of LLC paperwork takes approximately 3-4 weeks. However, expedited processing can be arranged for an additional fee.

How do I check if my California LLC name is still available?

Visit the California Secretary Of States entity name database to search for available LLCs in California.

Are you a California LLC owner, and do you require a to have a registered agent?

Each LLC in California must have a registered agent.

California allows anyone, even the owner, to act as a registered agent. However, they must be at least 18 years of age and live in California. They also need to be available during business hours.

 

Is a California business license required for an LLC?

Sometimes it is believed that an LLC and a business license are one and the same. However, they are not. The business entity is also known as an LLC. It is the way the business is organized in order to do business. A business license allows you to legally operate.

 

What is the cost of an EIN number for California?

California does not charge for an Employer Identification Number (EIN).

 

What is a California Foreign Limited Liability Company (California Foreign Limited Liability Company)?

An LLC with California foreign limited liability is an LLC that was established in another state, but wishes to be physically active in California. Being physically operational means that you have a physical presence, such as an office or employee.

 

What is a California Professional Limited Liability Company (California Limited Liability Company)?

State licensing is required for certain businesses, such as attorneys, podiatrists and physical therapists, acupuncturists and accountants. A Professional Limited Liability Company is often filed instead of an LLC. The filing process for a PLLC can be very similar to the LLC.

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