CobaltProsper

How to start an LLC in California

By Brent Chudoba, editor Updated

Forming an LLC in California costs $70 to file the Articles of Organization (Form LLC-1) with the California Secretary of State. After that you file a biennial report of $20. California also charges a franchise or business tax (details below). The $70 filing fee is small, but every California LLC owes the $800 minimum franchise tax annually, which is the real cost of running one here.

How much does it cost to start an LLC in California?

California LLC costs (reviewed August 29, 2026)
ItemCost
Filing fee (Articles of Organization (Form LLC-1))$70
Biennial report$20 every 2 years
Franchise or business taxYes, see below
Registered agentRequired

Source: California Secretary of State, fee schedule reviewed August 29, 2026.

What are the steps to form an LLC in California?

  1. Name your LLC. Pick a name that is available and meets California naming rules, then check it against the Secretary of State's business database.
  2. Appoint a registered agent. California requires a registered agent with a physical in-state address to receive legal mail. You can be your own agent, or hire a service.
  3. File the Articles of Organization (Form LLC-1). Submit it to the California Secretary of State and pay the $70 fee. This is the step that legally creates the LLC.
  4. Get an EIN from the IRS. It is free and takes minutes. Do not pay a service for it. See how to get an EIN free from the IRS.
  5. Calendar your biennial report. California charges $20 to keep the LLC in good standing. Missing it risks penalties or administrative dissolution.
  6. Open a business bank account. Keep business money separate from personal money so your liability protection holds up.

Does California have a franchise tax on an LLC?

$800 minimum annual franchise tax for every California LLC, due even with no income. An additional gross-income fee applies above $250,000: $900, $2,500, $6,000, or $11,790 as income rises.

How is an LLC taxed in California?

By default, an LLC is a pass-through entity: it pays no income tax itself, and the profits flow to the owners' personal returns. California has a state individual income tax with a top rate of 13.3% (graduated brackets), so those profits are taxed on your California return on top of federal tax. Nine graduated brackets from 1% to 12.3%, plus an additional 1% tax on taxable income above $1,000,000 (the Behavioral Health Services Tax, formerly the Mental Health Services Tax), for a top effective marginal rate of 13.3%.

An LLC can also elect to be taxed as an S-corp, which changes how owners pay self-employment tax. See LLC vs S-corp vs sole proprietorship and how self-employment tax works.

Sources