How to Set Up an LLC in California

We’ve put together a free step-by-step guide on how to set up an LLC in California. We want you to have a clear idea of how to set up and manage an LLC for your state. We’ve tried to make sure you have the information you need right at your fingertips. Each step has instructions and links to the sites for you to fill out the forms in the correct order. So, let’s set up your California LLC right now! 

A few points to remember before setting up your LLC in Arkansas

When you set up an LLC in California you’ll need a few things before you get started.  This section will help you get your checklist in order.

A Unique Business Name 

Every business in the state must be unique. You’ll need to search for a California LLC name. Go to the California Secretary of State: bizfile Online to make sure yours is not taken. 

An LLC Designator 

Once you’ve chosen a unique business name you’ll need to decide on your LLC designator.  When you set up your LLC in Arkansas.  You can chose one of the ones below.

• LLC (most common) 
• L.L.C. 
• Ltd. Liability Co 
• Ltd. Liability Company 
• Limited Liability Co. 
• Limited Liability Company 

A Registered Agent 

In most states, a registered agent is a person or a company that accepts “Service of Process” for your California LLC. A registered agent will receive any subpoenas, notices, and other legal, and tax documents sent to your business by the California Department of Tax and Fee Administration or California Franchise Tax Board. 

If you’re opening a business in California but you aren’t a resident, you’ll need to get a registered agent in that state.  The requirements for a registered agent are as follows: 

An Individual: 

• Must be 18 and be a resident of the state 
• Must be authorized to do business in the state. 
• Must have a physical street address located in Arkansas

A Company 

• Must be authorized to do business in the state 

If you meet the above criteria, you can be your own registered agent. Or you can set up a friend or family member to be your registered agent. 

You can also hire a commercial Registered Agent. A company that provides their name and address to receive legal documents from the state. 

Step 1: Reserve Your Business Name

To Set up an LLC in California you need to reserve your business name.  This way during the process no one can steal the name of your company. 

You’ll need to reserve your name at the  California Secretary of State: bizfile Online or by mail.  

The processing fee for reserving your business name online is $10.00. 

Step 2: File Your Articles of Organization in California 

Setting up an LLC in California is easy, especially for single-member LLCs. Just go directly to the California Secretary of State: bizfile Online.    

You can register and file your Articles of Organization at the same time.  Easy peasy.  

If you don’t want to file online, you can download and fill out the Articles of Organization here.  

Approval time will take 3 to 5 business days but forming your LLC during peak season will take 6 to 7 business days.  

Fees: In California, the cost of setting up your LLC and filing the Articles of Organization is $70.00 plus a Certification fee (optional) of $5.00. 

Step 3: Complete Your California LLC Operating Agreement 

An operating agreement is a key document used by LLCs, and partnerships. It outlines the business’ financial and functional decisions including rules, regulations, and provisions. This describes how your LLC will operate internally. For more information on operating agreements, you can check out the Small Business Administration’s article on basic operating agreements. 

Step 4: Get Your Federal Tax ID Number (EIN) 

Once your California LLC has been approved it’s time to get your Federal Tax ID Number from the IRS.   

Your EIN is the social security number of your business.  Keep it well protected.  You’ll use this number to open bank accounts, file tax documents, apply for loans and many other uses.  It also protects your social security number when doing business with other businesses like merchant accounts, 1099s received etc. 

To apply for your EIN you can go to IRS EIN/Tax ID Application.  Make sure you pick the correct Business Entity Type.   

Taxes, Permits, and Licensing in California

To do business in California you will need to file tax returns, and hold permits and licenses in your county or city.  

Every LLC doing business or organized in California must pay an Annual Franchise Tax of $800 and Estimated Fee at California Franchise Tax Board: Limited Liability Company.  

All LLCs in California must file and pay other applicable taxes to the California Franchise Tax Board. Your California LLC must also apply for necessary business licenses and or permits. This depends a lot on the type of business and the location of your business within the state.  

Aside from business licenses and permits, all LLCs must also pay appropriate taxes and meet obligations with the Arkansas Department of Finance and Administration.   

Putting it All Together

Now that you can set up an LLC in California online it shouldn’t take more than a week or two to get up and running.  The California Secretary of State’s website is very easy to navigate and following the four steps above will help you get your talents and ideas to market faster.