How to Start an LLC in California (2026)

Full transcript

0:00 The short answer

Dan To start an LLC in California, you file Articles of Organization, Form LLC-1, with the California Secretary of State and pay the $70 filing fee.

Maya Seventy dollars. That sounds low for California.

Dan The filing is low. The yearly cost is where California stands out. You also pay an $800 tax to the Franchise Tax Board, every year, and you file a report called the Statement of Information.

Maya This is The Business Formation Podcast. Today, California, start to finish for 2026: the seven steps, what a first year really costs, and the three best ways to get it filed for you. Where do we begin?

0:43 Step 1: Choose a name

Dan With the name. It needs to include LLC, L.L.C., or the words Limited Liability Company, and it has to be distinguishable from the names already on record.

Maya Anything banned?

Dan Certain words, yes. Bank, trust, corporation, and insurance company are on the list. And the name can't mislead the public about what you do.

Maya Is there any reason to rush a reservation?

Dan Only if you're not ready to file but you've found a name you love. Otherwise, search and file.

Maya How do I check what's taken?

Dan Use the free preliminary search on bizfile Online. If you need time, you can reserve a name for 60 days for $10.

1:25 Step 2: Name an agent for service of process

Maya Now the agent. I keep hearing a different term in California.

Dan Right. California says agent for service of process. It's the same role as a registered agent: the contact who receives lawsuits and official notices for your company.

Maya Who qualifies?

Dan A California resident with a California street address, or a registered corporate agent. You list the agent on your Articles.

Maya Can I name my own LLC?

Dan No. And a P.O. box won't work either.

Maya Does a commercial agent count as a registered corporate agent?

Dan That's the category. A registered corporate agent is the business option, instead of a California resident.

Maya What about privacy?

Dan There isn't any. The agent's name and address are public record. That's the reason a lot of owners hire a commercial agent instead of using their home.

Maya And switching later?

Dan You file an updated Statement of Information. We'll get to that.

2:23 Step 3: File Articles of Organization

Maya Okay. Time to file.

Dan You submit Form LLC-1 online on bizfile Online and pay $70.

Maya What's on it?

Dan It's a short form. The company name, a principal office and a mailing address, your agent, whether managers or members will run the company, and a purpose statement. That statement is preset, so you can't change it.

Maya Is there a way to speed it up?

Dan Online filings are handled first. Beyond that, an expedite is $350 for 24 hours, or $750 for same day.

Maya Good. That's one filing done.

Dan And I'm glad you're asking these, Maya.

Maya Happy to. I'm Maya, by the way, here with Dan.

3:05 Step 4: Write an operating agreement

Maya What about the operating agreement? Do I send it in?

Dan No. You keep it with your records. The Secretary of State doesn't take it, and there's no fee.

Maya Then why bother?

Dan Because California's LLC Act recognizes oral and implied agreements, even for one-member companies. So you want your own terms on paper. Who owns what, how profits are divided, who makes the decisions, and what happens if someone leaves.

3:32 Step 5: Get a free EIN

Maya Next is the federal tax number.

Dan Apply with the IRS at IRS.gov. It's free. Wait until the Secretary of State has filed your Articles.

Maya How fast?

Dan If the online application is approved, the number is issued right away. Keep the Social Security number or ITIN of the responsible person handy.

Maya And that ownership report everyone talked about?

Dan You don't need it. FinCEN no longer asks U.S. companies for it.

4:01 Step 6: File a Statement of Information

Maya Now the report you mentioned at the start.

Dan The Statement of Information, Form LLC-12. The first is due within 90 days of forming, and then every two years. The fee is $20.

Maya How do I know when the next one's due?

Dan Later filings fall in your formation month or in the five months before it. Filing online now requires User Access to be set up on bizfile.

Maya And if it's late?

Dan Once the state sends a notice and you still miss it, there's a $250 penalty.

4:34 Step 7: Pay the $800 yearly tax

Maya Then there's the tax.

Dan California charges every LLC $800 a year, payable to the Franchise Tax Board, even if the company earned nothing. The first payment is due by the 15th day of the 4th month after you form.

Maya Even with no income?

Dan Even with no income. There's one change coming, though. A 2026 law cuts the first-year amount to $400 for companies whose first tax year starts in 2027 through 2029.

Maya Anything else I should plan for?

Dan Once your California income reaches $250,000, there's an extra LLC fee on top.

5:13 What it costs

Maya So what does year one cost if I do all of it myself?

Dan $890. That's $70 to file, $20 for the Statement of Information, and the $800 tax.

Maya And after that?

Dan $800 a year, plus $20 every other year when the Statement comes due.

5:31 A three-year budget

Maya Can we run the numbers over a few years?

Dan Sure. Year one is $890. Year two is $800, because there's no Statement of Information. Year three is $820, because the second Statement comes due.

Maya What's the total?

Dan $2,510 in state costs over three years, for a company that never earns a dollar.

Maya That's a lot for an idle company.

Dan It's the reason to think about timing. If your first tax year starts in 2027, 2028, or 2029, the first-year tax is $400 instead of $800. That's a $400 difference on day one.

Maya So the formation date can matter.

Dan It can. Do check which tax year your company starts in.

6:21 What the services cost over three years

Maya And the services? Add that up for me.

Dan Mainstay is $199 each year, so $597 over three years, with the formation, the agent and the Statement of Information included. The other two are $199 in year one, then $99 in years two and three. That's $397.

Maya So $200 apart.

Dan Yes, before you count who files the Statement of Information. Either way, the state's $70 and the $800 tax are the same.

6:58 The 3 best ways to file in California

Maya Let's say I'd rather hand off the paperwork. Who should I look at?

Dan The three best ways to file in California, in order. First, our pick, Mainstay Filing, at $199 a year plus the state fee. With the $70 state fee, checkout comes to $269.

Maya What's inside the $199?

Dan Your formation filing, your EIN application, and your agent for service of process every year. It renews at the same $199. In California it also covers the Statement of Information, prepared and filed whenever it's due.

Maya What does it leave out?

Dan The $800 tax. You pay the Franchise Tax Board yourself, with any service.

Maya Number two?

Dan CA Registered Agent.org. It prepares and files your Articles for $199 plus the state fee, and the first year of its registered agent service is free. After that, it's $99 a year.

Maya And three?

Dan California Registered Agent.ai. The same offer: $199 plus the state fee, a free first year of agent service, then $99 a year.

Maya Then why isn't one of the $99 services first?

Dan It depends on the Statement of Information. If you'd file it yourself every two years, numbers two and three cost less from year two, at $99 for the agent alone. And if you want the agent and the Statement handled at one steady price, that's Mainstay. The $800 tax is the same with all three.

8:47 Recap

Maya Can you give us the short version?

Dan Pick a name with LLC in it, name an agent for service of process, file Form LLC-1 online for $70, write an operating agreement, get your free EIN, file the $20 Statement of Information within 90 days and every two years, and pay the $800 tax every year.

Maya The links to all three services and the official sources are in the show notes. Thanks for listening to The Business Formation Podcast, and good luck with your new California LLC.