A state of California LLC is a limited liability company that can be formed by following these steps:

  1. Select an appropriate business name.
  2. File an Articles of Organization.
  3. Choose a registered agent.
  4. Create an operating agreement.
  5. File a Statement of Information.
  6. Obtain an EIN from the IRS.
  7. Obtain any necessary business permits and licenses.

How to Start an LLC in California

You'll start by choosing an available and appropriate LLC name that adheres to state guidelines. Your LLC name has to end with a designator identifying it as an LLC, such as “L.L.C.” or “Limited Liability Company.”

Some words are restricted — such as “Attorney” or “Bank" — and will require additional paperwork and/or a licensed individual to be part of your business. Other words are prohibited to avoid creating confusion between your LLC and a state or federal agency.

You can reserve an available name up to 60 days by filing a reservation request form with the state.

Documents and Agent for Service of Process

When you file your Articles of Organization with the Secretary of State office, your LLC is officially formed. This brief document is usually easy to prepare and should include the following information:

  • Your LLC name and address
  • Registered agent name and address
  • The purpose of your LLC
  • LLC management type

It costs $70 to file your Articles, but add $15 if you choose to drop off your form at the state office.

California requires you to indicate who will manage your LLC, such as one of the following:

  • All LLC owners/members
  • One manager
  • More than one manager

The amount of time to process your filing depends on the type of request you submit, how it's submitted, and when the state receives it. You can expedite filing by paying additional fees.

You must designate an agent for service of process, also known as a resident agent, registered agent, or statutory agent. This is an individual or business that accepts and sends legal paperwork on your LLC's behalf. Your agent has to be a California resident with a physical street address or a company authorized to do business in the state.

You must prepare an operating agreement when you form an LLC in California. It may be a written or verbal agreement, and it's a legal document that outlines your LLC's ownership and operating procedures. It details the members' rights and responsibilities, including management and financial roles.

All California LLCs (including foreign businesses registered in the state) are required to file a Statement of Information with the state. You have 90 days after filing your Articles of Organization to do so. After that, you must file your Statement every two years. It costs $20 to file this form.

Final Steps

Obtain an Employer Identification Number, or EIN, from the IRS. This is also called a Federal Tax ID Number. You'll need an EIN if any of the following apply:

  • Your LLC has more than one member, even if you have no employees
  • You operate a single-member or multi-member LLC with plans to hire employees
  • Your single-member LLC has elected to be taxed like a corporation

You can apply to obtain your EIN online, and it's free of charge. Online applications are the fastest way to get your number; once your application is complete, you'll immediately receive it. You'll also need an EIN to open a business banking account, as most banks require it.

You may need city, state, or federal licenses depending on the type of business you operate. For instance, if your LLC sells firearms or alcohol, you'll need state, federal, and/or business licenses. In some jurisdictions, like San Francisco, you'll need specific business licenses to legally conduct business in the city.

Use the CalGold website to check for any permits you'll need from the state. You may consult with your city's Chamber of Commerce to find out which local permits and licenses your business needs.

Because each state has its own requirements for forming LLCs, make sure you adhere to all the guidelines in California to properly start your new business. You can always check the Secretary of State website for additional resources and tips.

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