How to Form an LLC in California in 2026 — Step by Step

California is the largest small-business economy in the United States, and forming an LLC here gives you liability protection, banking access, and credibility with clients. It's also the most expensive state to run an LLC in, primarily because of the $800 annual franchise tax. Before you file, it's worth understanding exactly what you're signing up for.

This guide walks through every step of forming an LLC in California in 2026 — from name search to filing the Articles of Organization to the recurring fees you'll owe every year after.

Before You File — Decide If California Is Actually the Right State

If you live in California and operate from California, you almost certainly need a California LLC. The state's "doing business" rules mean an out-of-state LLC operating from California still owes the $800 franchise tax and must register as a foreign entity — paying twice.

If you don't live or operate in California, forming there is almost always the wrong move. Your home state is usually the right choice.

What You Need Before You File

• Your LLC name — must be unique in California and end with "LLC," "L.L.C.," or "Limited Liability Company"
• A registered agent (called "agent for service of process") with a physical California street address
• Your organizer's name and address
• A credit card or bank account for the $70 state filing fee
• An understanding that you will owe $800/year going forward — budget for it before you file

Step 1 — Search for Your LLC Name

Search the California Secretary of State business search at bizfileonline.sos.ca.gov to confirm your desired name is not already taken. Your name must be distinguishable from every existing California entity — even small differences (the / and / vs. & / different punctuation) may not be enough.

Restricted words like "Bank," "Trust," "Insurance," and "Realtor" require additional approval or licensure.

Step 2 — Choose a Registered Agent

California requires every LLC to designate an "agent for service of process" — what most states call a registered agent. The agent must have a physical California street address (no P.O. boxes) and be available during business hours.

You can be your own agent if you have a California address. The trade-off: your home address becomes public record. A commercial registered agent service typically runs $50–$300/year and keeps your home address off the public filing.

Step 3 — File Articles of Organization (Form LLC-1)

Articles of Organization is the document that officially creates your California LLC. You file Form LLC-1 with the California Secretary of State, either online through the bizfile portal (recommended) or by mail.

The state filing fee is $70. Online filings are typically processed within 1–3 business days. Mail filings can take several weeks.

Step 4 — File Your Initial Statement of Information (Form LLC-12)

Within 90 days of forming your LLC, you must file an initial Statement of Information (Form LLC-12) with the Secretary of State. This filing lists your LLC's address, the agent for service of process, manager or member information, and the type of business.

The fee is $20. After the initial filing, you must file a Statement of Information every two years. Missing the deadline triggers a $250 penalty and eventually a suspension.

Step 5 — Pay the $800 Franchise Tax

Your first $800 franchise tax payment is due by the 15th day of the 4th month after your LLC's formation date. For a calendar-year LLC, that's April 15. The first-year exemption that existed for LLCs formed 2021–2023 has lapsed — new LLCs formed in 2024 and later owe the $800 in year one.

You pay the franchise tax using Form 3522 through the Franchise Tax Board's Web Pay portal at ftb.ca.gov. We have a separate guide that walks through the franchise tax in detail.

Step 6 — Get Your EIN

Apply for your Employer Identification Number at IRS.gov. It's free, takes about 10 minutes, and the number is issued immediately. You need it to open a business bank account, file federal taxes, and hire employees or contractors.

Step 7 — Create an Operating Agreement

California Corporations Code Section 17701.10 requires every California LLC to have an operating agreement, though it is not filed with the state. The agreement defines ownership, profit distribution, management structure, and member rights and exits.

For a single-member LLC, an operating agreement is still essential — it reinforces the legal separation between you and your business and helps protect your liability shield if challenged.

What Does It Cost to Form (and Run) a California LLC?

How Long Does It Take?

Online filings through bizfile California are typically processed within 1–3 business days. Expedited 24-hour processing is available for an additional fee (currently $350 in most cases). Mail filings take several weeks.

After Your LLC Is Approved — What Comes Next

1. Apply for your EIN at IRS.gov (free, 10 minutes)
2. Open a business bank account
3. File your initial Statement of Information within 90 days ($20)
4. Pay your $800 franchise tax by the 15th day of the 4th month
5. Create your operating agreement
6. File Form 568 annually with the FTB by March 15
7. File a renewal Statement of Information every 2 years