How to Start an LLC in California

Forming an LLC in California is no small undertaking. Yeah, you can work your way through the steps on your own at no financial cost. But that also means you’ll have to figure out all of California’s business requirements, and your personal information is going to be on the public record. Plus, you’ll have to deal with a mountain of junk mail, stay on top of your annual reports, and all the other little headaches that add up to a major migraine.

Or you can hire an affordable local business formation service (like us!) to handle the nitty gritty for you so that you can actually focus on your business. Either way, it’s important to understand the legal requirements of forming an LLC in California. Here, you’ll find our step-by-step guide—and tips—on how to start your California LLC.

  1. Name Your California LLC
  2. Hire a California Registered Agent
  3. File Articles of Organization in California
  4. Get an EIN
  5. Open a Business Bank Account

1. Name Your California LLC

When it comes to naming your California LLC, you have a lot of freedom. But you do need to meet a handful of California’s legal requirements. Your LLC name must:

  • Include an “identifier.” This just means that your business name needs to include your entity type. For an LLC, you can choose whatever variation of “limited liability company” suits your style: “LLC,” “L.L.C.,” “Limited Liability Company,” “Ltd. Co,” etc.
  • Exclude any deceptive words. California won’t let you include words in your LLC’s name that suggest your business is a government institution, insurer, bank, or charitable foundation. This means you can’t use words like “bank,” “insurer,” or “municipal.”
  • Be unique. If someone else is using your desired business name, you’ll need to choose a new business name. You can’t get around this problem by switching up punctuation or tacking on “the” to the beginning of your business name—California prohibits using a business name that is “deceptively similar” to another business name registered with the California Secretary of State.

To learn more, see the California Code of Regulations on Business Names.

How do I know if my California business name is unique?

You can search for business name availability by using the California Secretary of State’s Business Search.

Tip: Reserve your CA business name in advance.

Holding off on forming your LLC for tax reasons? Or just not quite organized yet?

You can get a little more sleep at night knowing that your perfect business name is reserved by filing the Name Reservation Request with the California Secretary of State. This costs $10 and will reserve your California LLC name for 60 days.

2. Hire a California Registered Agent

California LLCs are required to appoint a registered agent (called an “agent for service of process” in California) to accept legal mail on behalf of your business. You’ll need to have your registered agent’s information ready to go before you complete your formation documents.

A California registered agent must:

  • Have a physical street address
  • Keep regular office hours
  • Agree to accept (and forward!) legal mail on your behalf

If you meet these requirements, you can be your own registered agent. There’s one drawback, however—your address will go on the public record for all the world to see (including aggressive marketers). Hire us for California Registered Agent Service ($50/year) and we’ll let you use our California business address on your public documents.

Why do I need a California Registered Agent?

California law requires you to appoint a California registered agent, and the California Secretary of State won’t accept your formation documents unless you have one.

Why? Because if you get served legal paperwork (like a summons or lawsuit), someone needs to be present to accept it during normal business hours. Many business owners log a majority of hours outside of a traditional office, making it difficult to accept service of process. If you hire us, we’ll accept legal paperwork on your behalf and scan it into your secure online account that day.

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3. File Articles of Organization in California

If you have your LLC name and your California registered agent information ready to go, you can move onto the next step: filing Articles of Organization with the California Secretary of State.

This paperwork officially registers your California LLC with the Secretary of State. It’s the step that establishes your business as a separate legal entity. In California, you can submit your Articles of Organization online, by mail, or in person.

You can fill out and submit the Articles of Organization yourself or hire us to do it for you for $170 total ($150 plus the $20 statement of informaion fee) and you’ll get one year of Registered Agent Service, too.

Tips for Filling out the California Articles of Organization

The California Articles of Organization seem straightforward enough, but there are a few sections that tend to trip people up. If you make a mistake, the California Secretary of State will likely reject your filing (and set you back a few weeks). Here are our tips for getting it right the first time.

To fill out your Articles of Organization, you’ll need to provide the following:

  • Your LLC business name. If you followed the tips in step one of this guide, you should be ready with a clever (and legally compliant) business name to fill in here.
  • Your LLC business address. Don’t make a rookie mistake here by listing a PO box. Your business address must be a physical street address in the state of California. And remember: the address you list here will be posted online. Your business address doesn’t have to be where you actually work, though. Hire us, and we’ll provide a California business address for you to use at no extra cost.
  • A mailing address. This isn’t required, but if you want to list a mailing address, you can. It’s fine to list a PO box here.
  • Your Agent for Service of Process. If you’re stumped on what to put here, go back to step two of our guide. You’ll need to list your California registered agent information here, including the agent’s physical street address. Again, no PO boxes allowed. And yes, this address goes on the public record.
  • Your LLC’s management structure. This is just a box you check, but it’s important. It indicates whether your LLC will be managed by “one manager,” “more than one manager,” or “all limited liability members.” Members are the owners of an LLC, while managers are appointed by members to make operational decisions on behalf of the LLC.
  • Signature from an organizer. Don’t let the word “organizer” confuse you. The organizer is whoever is filling out this form on behalf of your LLC. Hire us, and we’ll sign here.

How much does it cost to file Articles of Organization?

At the moment, $0. Normally, filing Articles of Organization in California costs $70, but for a limited time (7/2022-6/2023) the filing is free.

Tip: File your Initial Statement of Information now, too.

Within 90 days of forming a California LLC, you’ll need to file an Initial Statement of Information for $20. It’s easy to put off, but if you forget, you could get hit with a $250 late fee.

We recommend filing your Initial Statement of Information now, while you’re already up to your eyeballs in paperwork. That’s the way we do it—hire us, and we’ll file both forms for you. You won’t have to file another Statement of Information for two years (and you can hire us to file that one for you, too).

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4. Get an EIN

An Employer Identification Number (EIN) is the number the IRS will use to identify your LLC for tax purposes. Not every business is required to obtain an EIN (some business owners just use their social security number), but getting one is easy and will help separate you from your business. It will come in handy for paying taxes, setting up a business bank account, and applying for local permits and licenses.

You can apply for an EIN with the IRS for free.

Tip: Let us get your EIN.

When you hire us to form a California LLC, you can add an EIN to your order for an additional $50.

5. Open a Business Bank Account

This isn’t exactly a legal requirement, but we can’t recommend it enough. If you have an LLC in California, you should open a separate bank account for your business. If you let your business money intermingle with your personal money, you’re eroding the legal separation between you and your business. This could potentially damage your limited liability status. It might not seem like a problem now, but if you ever face a lawsuit, a court might hold you personally liable for the debts of your business.

How do I open a California business bank account?

To open a business bank account, you’ll likely need to show the bank your California Articles of Organization, your LLC Operating Agreement, and your EIN.

Next Steps

Your LLC is on the books in California. Now what?

Depending on the nature of your business, there may still be California state requirements to take care of.

  • Businesses with employees will need to register for a payroll tax number with the California Employment Development Department.
  • Businesses selling “tangible personal property” need to register for a Seller’s Permit with the California Department of Tax and Fee Administration.
  • All businesses in California have to pay the annual California Franchise Tax (a minimum of $800).

Once your state requirements are covered, you can move on to researching your local county or city requirements. For example, many municipalities in California require businesses to obtain a Business Tax Certificate to pay city business taxes. You’ll need to get in touch with your local city government to find out your local requirements. We have guides to Starting a Business in Los Angeles, Starting a Business in San Diego, and Starting a Business in San Francisco.


Get in touch! Our business experts here in Sacramento, CA form LLCs in California every day, and we’d love to help.