Articles Of Organization LLC California: Everything You Need to Know
Articles of Organization LLC California, or Articles of Incorporation, are important documents that must be filed with the office of the California Secretary of State when forming a new LLC structured company that will operate within state limits.3 min read
2. California LLC Formation: General Steps
Articles of Organization LLC California, or Articles of Incorporation, are important documents that must be filed with the office of the California Secretary of State when forming a new LLC structured company that will operate within state limits.
There are a number of important steps that must be completed in order to successfully form a business of this structure in the state of California.
Forming an LLC in California
LLCs, or Limited Liability Companies are relatively simple and inexpensive to form in the state of California, and doing so definitely has its benefits. For example, even if you are the sole owner of the company, forming an LLC protects you personally in the event a complaint is filed against your business or if the business owes a debt. Owners of this type of business are also not expected to pay self-employment taxes.
- Completing and submitting all required forms
- Paying any required fees
- Meeting all naming conventions required by the state
In some states, new LLC's are required to publish their Articles of Incorporation in the local newspaper as a part of the registration process. However, this step is not required in the state of California.
An LLC business structure is uniquely flexible and allows for company members to be any of the following:
- A corporation
- Another LLC
- A foreign entity
The only types of business that are prohibited from forming as an LLC in California are banks and insurance companies. Otherwise, anybody can use this business structure to form their company. LLCs can either be single-member, or owned by one individual, or multi-member, or owned by several people.
In the state of California, an LLC can also be either member-managed or manager-managed. A member-managed Limited Liability Company operates like a general partnership, meaning that every member in the company also acts as a manager and can make decisions on behalf of the LLC. Conversely, a manager-managed company only allows specifically designated managers to monitor daily business activities.
Limited Liability Companies are the most flexible business entity structures in the state of California. The company's rules are determined by the Operating Agreement that is set forth during company formation and registration. This Operating Agreement is a requirement of the state and should be completed before filing your first Statement of Information with the office of the Secretary of State.
California LLC Formation: General Steps
There are a few relatively simple steps to take in order to get the ball rolling on forming your new LLC:
- Complete and submit your Articles of Organization to the office of the Secretary of State. This is a simple, one-page form.
- Pay a filing fee of $70 if you do not need a certified copy of your Articles of Organization. If you do need a copy, which is recommended, the filing fee is $75. All checks should be made payable to the Secretary of State.
- Complete and submit your Statement of Information. This step must be completed no later than 90 days after filing your Articles of Organization or else your application may be cancelled.
- The state of California requires that all new companies pay an $800 minimum franchise tax fee to the California Franchise Tax Board. This fee must be paid within four months after the beginning of the tax year, on the 15th of the month.
- Complete and submit your Operating Agreement. This document must contain signatures from every member of the company.
- Research and become familiar with ongoing legal requirements as they pertain to your new company. This includes things like keeping your internal books and records up to date and making them available for inspection, upon request by the Secretary of State.
Following these steps is the best starting point for forming your new company and registering it with the state of California. While the process is relatively simple, it can be easy to feel overwhelmed by all of the required paperwork and legal requirements.
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