How to Form an LLC in California (2026 Guide)
Updated: August 2026 · Industry Advisors · Filed 2006.
California is one of the more expensive states to run an LLC in. The formation itself is straightforward — one form, one fee, done in a week. What makes California distinctive is the $800 minimum annual franchise tax, owed by every LLC operating in the state regardless of income, and the aggressive nexus rules that pull out-of-state LLCs into California's tax base.
Step 1 · the Formation Timeline
- Filing agency — California Secretary of State
- Form — LLC-1 (Articles of Organization)
- Filing fee — $70 est.
- Statement of Information (LLC-12) — due within 90 days, then every 2 years; $20 est.
- Franchise tax — $800/yr minimum, Form 3522
- Agent for service of process — individual CA resident or registered corporate agent
Step 2 · the $800 Franchise Tax — Unavoidable
The $800 minimum is due even in years with zero revenue, and even in the year the LLC dissolves — unless the dissolution paperwork is filed before the fiscal year begins. Paid on Form 3522 by the 15th day of the 4th month after formation for year one, and by April 15 in subsequent years.
Step 3 · the LLC Fee — Above $250K
Step 4 · the Recurring Calendar
Quick Tool · CA LLC Year-One Cost Estimator
Estimate Your CA Year-One Setup Cost
Expand each row that applies.
Articles of Organization (LLC-1)
$70 est. filed with the Secretary of State online.
Statement of Information (LLC-12) — year 1
$20 est. due within 90 days. $250 late fee if missed.
$800 minimum franchise tax
$800 est. — owed regardless of revenue.
LLC fee (if CA-source income > $250K)
$900–$11,790 est. tiered on gross income. Additional to the $800.
Agent for service of process (if paid)
$100–$300/yr est. — skip if a founder is a CA resident with a physical address.
City business license
$50–$500/yr est. depending on city. Most CA cities require one annually.
Seller's Permit (if selling taxable goods)
Free from CDTFA — but registration required before first sale.
Typical first-year total for a small CA LLC under $250K revenue: $1,040–$1,690 est.
The Out-Of-State Trap
California's FTB has interpreted "doing business in California" broadly. An LLC formed in another state that has a California-resident member, does more than $500,000 in California-source sales, or has significant California-based operations may owe the $800 minimum franchise tax even without formal registration. See the foreign qualification post and the home state vs. Delaware/Wyoming/Nevada analysis before assuming out-of-state formation avoids it.
Quick Check
Q1. Your CA LLC has zero revenue in year one. Do you still owe the $800?
Answer: Yes. The $800 minimum is owed regardless of revenue. Only formally dissolving the entity before the fiscal year starts stops it.
Q2. Your CA LLC has $350,000 in CA-source income. What do you owe FTB (before other adjustments)?
Answer: $800 franchise tax + $900 LLC fee = $1,700 est. Confirm current tier amounts on the FTB Form 3536 instructions.
Q3. When is the Statement of Information (LLC-12) due for a newly-formed CA LLC?
Answer: Within 90 days of formation, then every 2 years thereafter. Late fee is $250.
Where This Connects
Core LLC stack applies: registered agent, EIN, Operating Agreement. Compliance ties into the Q4 checklist and the Sept 15 estimated-tax deadline. If you sell into other states, see the sales-tax nexus post. The four paths comparison covers whether a CA LLC or CA-registered Delaware C-Corp fits your capital plan.
Sources and Further Reading
- California Secretary of State · LLC Filings
- FTC · Small Business Compliance
- IRS · LLC Tax Information
The Everyday Owner's Blueprint handles the underlying LLC stack; layer the $800 + LLC-fee calendar on top of the 12-week formation walk-through.
Industry Advisors · 30 Wall Street, New York, NY 10005. Education, not legal or tax advice. California rules and fees change; confirm current requirements at sos.ca.gov and ftb.ca.gov before you file.
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