How to Form an LLC in California (2026): Real Costs, Real Steps
Forming an LLC in California is straightforward on paper and expensive in practice. The Secretary of State filing fee is low, but California layers on an $800 minimum franchise tax that applies to every LLC, every year, regardless of revenue. This guide walks through what you actually pay in year one, the exact filings you submit (Articles of Organization, Statement of Information, FTB 3522), and the timing that trips up most founders. Northwest Registered Agent is our default RA pick for California; banking defaults to Mercury.
Year-1 Cost Table
| Item | Cost | Source |
|---|---|---|
| Articles of Organization (LLC-1) | $70 | cite |
| Statement of Information (initial) | $20 | cite |
| Annual franchise tax (FTB 3522) | $800/yr | cite |
| Registered agent (Northwest) | $125/yr | cite |
| Year-1 total (no expedite) | $1,015 | cite |
The 6 Steps
- Step 1: File Articles of Organization
Submit the formation document to the California Secretary of State. See the cost table above for the current filing fee.
- Step 2: Appoint a Registered Agent
Every California LLC needs a registered agent with a California street address. You can serve yourself, but most founders use a commercial RA — Northwest is our default pick.
- Step 3: Get an EIN (Federal Employer Identification Number)
Apply with the IRS using your stamped Articles of Organization. Free, takes 5 minutes online.
- Step 4: Adopt an Operating Agreement
Required by best practice — banks routinely request it before opening business accounts.
- Step 5: Open a Business Bank Account
Mercury for software/online businesses; a local credit union for cash-heavy retail. Keep personal and business finances separate from day one.
- Step 6: File State Tax Registrations
Register for California state taxes (sales tax permit, payroll registration if you have employees, etc.) before you transact.
Recommended Tools
Northwest vs ZenBusiness for California LLCs
Verdict (as of 2026): Northwest Registered Agent is our default pick for California LLCs. They publish a California-specific registered-agent page (linked in the cost table) and do not upsell add-ons at checkout. ZenBusiness wins only if you want bundled formation in a single flow.
| Criterion | Northwest | ZenBusiness |
|---|---|---|
| Registered-agent only price (California) | $125/yr | $199/yr |
| Bundled formation | Optional add-on | Included in formation plans |
| Privacy (address shielding) | Strong | Strong |
| Upsells at checkout | None | Several |
| Annual-report filing service | $100/yr add-on | $199/yr add-on |
Frequently Asked Questions
Do I have to pay the $800 franchise tax in year one?
Yes for most LLCs formed in 2026; California eliminated the first-year exemption that ran 2021–2023. Confirm against current FTB guidance.
How long does California LLC formation take?
Standard processing is currently 3–4 weeks. Same-day and 24-hour expedited filings are available for an additional fee at the Sacramento walk-up counter.
Can I be my own registered agent in California?
Yes, but your home address becomes public record and you must be available during business hours. Most founders use a commercial RA like Northwest.
What is Form LLC-12?
It is the Statement of Information. California LLCs file it within 90 days of formation and every two years after.
Do I need an EIN before forming the LLC?
No. Form the LLC first, then apply for the EIN with the IRS using your stamped Articles of Organization.
Annual Filing Deadline
Statement of Information due within 90 days of formation, then every 2 years
Authoritative Sources
- https://www.sos.ca.gov/business-programs/business-entities/forms
- https://www.ftb.ca.gov/forms/2024/2024-3522.pdf
- https://www.sos.ca.gov/business-programs/business-entities/statements