When it comes to forming an LLC in California, new business owners often have a laundry list of questions running through their heads. Starting a business is a big undertaking and it’s only natural to have some apprehension and butterflies given all the paperwork and associated costs.

Whether you’re based in New York or setting up shop in The Golden State, UpCounsel’s network of experienced attorneys can help you form your LLC and provide the legal frameworks and advice you need to get started on the right foot. Here we’ll outline some of the most common questions we hear from business owners about LLCs in California and how our team of lawyers can help.

What Is an LLC and How Does it Benefit a California Business?

An LLC or limited liability company is an entity formed for the purpose of conducting business. By forming an LLC, your personal assets are protected from those of your business. This means, for example, that if your business incurs a debt, the creditor cannot come after your personal finances. With an LLC, you can also establish a business structure with multiple owners, or “members”, with more ease and flexibility than with an LLP or S-Corp. While an LLC is not an S-Corp, it does provide some of the same benefits in terms of liability protection. Finally, businesses can get more favorable taxation rates when structured as an LLC.

What Is the Process of Forming an LLC in California?

The process of forming an LLC in California starts with filing “Articles of Organization” with the California Secretary of State and paying the filing fee of $70. You will need to provide the proposed LLC's name, address, a purpose statement, and the name and address of the LLC's organizer who will be responsible for filing the document. Within approximately two weeks, you will receive either an executed copy of the LLC Articles of Organization from the California Secretary of State or a letter rejecting the filing.

Once your LLC has been established, UpCounsel’s lawyers can help you prepare preparing an operating agreement, getting the proper tax identification number, obtaining other licenses and permits, and setting up a registered agent for service of process. Although you are not required to hire a lawyer to file an LLC in California, you may find it helpful to have experienced legal counsel who can guide you through the process.

Are LLCs in California Subject to Taxation?

Yes, all LLCs in California are subject to taxation, including California personal income tax, California corporate tax, California Franchise Tax, and California sales tax. Depending on the size and type of business you are starting, you may need to make additional payments to the IRS or state. With the help of UpCounsel’s experienced lawyers, you will be able to determine the best structure and filing requirements that work for your business.

Are LLC Members Subject to Double Taxation in California?

No, LLCs are not subject to double taxation in California, as profits and losses are passed through and are only subject to taxes at the owner level. This means that while the LLC itself may pay taxes on certain income, the members do not have to pay taxes at the corporate level.

How Can I Maintain Compliance With State and Federal Regulations for my California LLC?

Maintaining compliance with state and federal regulations for a California LLC is not an easy feat and requires sound legal counsel and advice. To ensure you are compliant, UpCounsel’s attorneys can help you prepare and maintain all necessary documents to ensure compliance with state and federal regulations. Additionally, our team of business lawyers can advise on a variety of issues, including corporate governance, shareholder rights, and fiduciary responsibility.

Closing ideas

Forming a limited liability company (LLC) in California requires that you follow a specific set of steps and have the proper legal advice and paperwork. UpCounsel’s team of experienced attorneys can assist you in filing the necessary paperwork and following the requirements set by both the state and federal government. Our attorneys can also provide legal advice and guidance on a variety of issues and help ensure that your business is compliant.


LLC California,


business lawyers