Start an LLC in California - File Your LLC in as Little as 24 Hours

How to Start an LLC in California  - Guidelines

Forming an LLC is easy, and you can do it here online. Here's what you need to know for California (see below for other states). In California, forming an LLC is a simple, clear cut process. The following information will guide you through the process. Be sure to read our LLC 10-step guide also for a better understanding of what's required and why.

Limited Liability Company Name

The first step is to select the name of your LLC. This should be unique and not already in use by another business in California - you should also search the USPTO website to ensure that your intended business name has not be previously trademarked. SunDoc can conduct a name search for you if you choose, and reserve it for you.

The name of a Limited Liability Company must end with the words “limited liability company” or the abbreviation “LLC” or “L.L.C."  The words “limited'' and “company” may be abbreviated to “Ltd.” and “Co.,” respectively.  An available name may be reserved for a 60-day period.

**NOTE: The name availability check or reservation of a name does not guarantee the name meets all federal and state requirements related to a specific entity type. Names are reviewed for compliance by the Secretary of State's office when the documents are submitted for filing. 

Organizers / Members

The limited liability company can be formed by any one (1) or more persons. The person or persons who execute and file the articles of organization may, but need not, be members of the limited liability company. The limited liability company must have one or more members.

A Limited Liability Company, or LLC, is a business entity similar to a corporation that reduces the owner's liability exposure from the activities of the business. There can be multiple people who own a part of the company under this structure, known as members. LLC members share in the revenues of the company and file taxes as individuals on that income (or loss), but the LLC itself is not required to file a separate tax return the way that a corporation is required to.

When you establish the company name, you’ll fill out an Articles of Organization form and identify the LLC organizer. This person can be anyone. If you are using an attorney to handle the business formation, they could be listed as the organizer. SunDoc can file your Articles of Organization (as part of the Pro Package), and could then be listed as the organizer.

The Articles of Organization form also specifies whether the LLC is to be member-managed or manager-managed. See our guides under the Doc Guidance top menu for help with this decision.

Duration of LLC

The period of duration of a limited liability company may be perpetual.

Purpose Clause

A limited liability company may engage in any lawful business activity, except the banking business, the business of issuing policies of insurance and assuming insurance risks, or the trust company business.

Record Keeping Requirements

The LLC must have an office where its records are kept. This office may be (but is not required to be) one of its business locations in California, or its registered office. We cannot provide this service.

Registered Agent - Agent for Service of Process 

The Articles of Organization must specify a registered agent for the company, who can be an individual or a company. See our help guides for more information on this.

The limited liability company must maintain an agent for service of process in California. If an individual is designated as agent, include the agent’s business or residential street address in California (a P.O. Box address is not acceptable).  If another corporation is designated as agent, do not include the address of the designated corporation.

Note: Before another corporation may be designated as agent, that corporation must have previously filed with the Secretary of State a certificate pursuant to California Corporations Code section 1505. A corporation cannot act as its own agent and no domestic or foreign corporation may file pursuant to Section 1505 unless the Corporation is currently authorized to engage in business in California and is in good standing in the records of the California Secretary of State.

Operating Agreement

The members of a limited liability company should adopt and maintain a separate operating agreement. The agreement may contain any provisions regarding the affairs and conduct of the business of the company to the extent such provisions are not inconsistent with the laws of California or the Articles of Organization.

An Operating Agreement is required in California for an LLC. This document specifies the company's internal operations including financial matters, rules and regulations. This document defines the governance structure, capital management and distribution of profits. This document can be very detailed and is very flexible to handle any number of contingencies, tailored to your business. It's a crucial part of the LLC so you may want to consult an attorney.

Filing Procedures

When the organized documents are completed, you need to file them with the State of California. Your new LLC is created when they are approved. SunDoc can file these documents if you desire.

Submit to the Secretary of State one (1) executed original of the Articles of Organization. Within 90 days after the filing of the Articles of Organization, the company must file a Statement of Information.

The Statement of Information must be updated every two years or whenever any changes are made to the company. The California business website has every form needed for forming and reporting on an LLC. It’s important to file reports and statements on time -filing late can be very costly, including invalidating your standing as a legal entity. SunDoc can handle all your routine filings, so you'll know it will be done on time.

As a new company, you will need to obtain an Employer Identification Number form the IRS, which will enable you to create a business bank account. You must also be aware of all taxes, permits, licenses and fees required to operate. Important: Any legal or financial questions should be directed to a professional such as an attorney or accountant. The information contained in this article is for personal use and should not be considered as legal, financial or tax advice. It is not guidance for insurance needs or employee management and human resources.

California Franchise Tax Board

Pursuant to California Revenue and Taxation Code section 17941, every Limited Liability Company (LLC) that is doing business in California or that has Articles of Organization accepted or a Certificate of Registration issued by the Secretary of State’s office (pursuant to California Corporations Code section 17050 or 17451) AND is not taxed as a corporation, is subject to the annual LLC minimum tax of $800. The tax is paid to the California FRANCHISE TAX BOARD; is due for the taxable year of organization/registration and must be paid for each taxable year, or part there of, until a Certificate of Cancellation of Registration or Certificate of Cancellation of Articles of Organization (pursuant to Corporations Code section 17356 or 17455) is filed with the Secretary of State’s office. For further information regarding the payment of this tax, please contact the FRANCHISE TAX BOARD at 800-852-5711.

If you've read our guides on forming an LLC and feel ready to proceed, good luck with your new venture, and for assistance from SunDoc Filings, give us a call during business hours or see below to Get Started Now!