How to Start an LLC in California: Step-by-Step Guide (2026)

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Six steps to form a California LLC: check the name, file Form LLC-1 for $70, get a free EIN, file Form LLC-12 for $20 within 90 days, pay the $800 annual tax, then get local licenses. The order we recommend. Diagram: Sac Business Launch.

1. Check the name

An LLC (limited liability company) can help keep your personal money and property separate from business debts. You form it with the California Secretary of State, the office that registers LLCs and corporations. Search that office's business search and make sure the name is not already taken. The search takes a few minutes. The LLC-1 form says the name must include an LLC ending, such as "LLC" or "L.L.C." The state adds "LLC" if you leave it off.

2. File Form LLC-1

File Articles of Organization online at bizfile Online (bizfileonline.sos.ca.gov). The filing fee is $70. A certified copy is optional and costs $5 more. If you file in person, the Secretary of State adds a $15 handling fee. Online filing is the fastest option. The state posts the current processing time on its site.

3. Get a free EIN

An EIN (Employer Identification Number) is your business's federal tax ID. It is free on irs.gov. The IRS says to form the LLC with the state first. If you apply before that, the EIN may be delayed. When the IRS approves it online, it usually takes minutes.

4. File Form LLC-12

The Statement of Information is the short form that lists your address, your managers or members, and your agent. File it within 90 days of forming. The fee is $20. After that first filing, you file it again every two years.

5. Pay the $800 annual tax

California charges most LLCs an $800 annual tax each year, even when the business has no profit. Pay the Franchise Tax Board with Form FTB 3522 or Web Pay. The first payment is due by the 15th day of the 4th month after you file with the state.

6. Get local licenses

In the City of Sacramento, get the Business Operations Tax certificate. Other cities and the county have their own license. If you sell goods, you also need a seller's permit.

After the LLC exists, open a business bank account so business money and personal money stay apart. Put the yearly deadlines on a calendar. We list them in the LLC annual compliance guide.

If your LLC is a U.S. company, FinCEN says you do not have to file a beneficial ownership report. A foreign company registered to do business in the U.S. may still have to. Beneficial ownership means who actually owns or controls the company.

Costs

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California LLC costs: Form LLC-1 is $70 when you form, Form LLC-12 is $20 within 90 days and then every two years, the annual tax is $800 each year, the LLC fee applies only at $250,000 or more of California income, and an EIN is free. Diagram: Sac Business Launch.

You may have heard that new LLCs skip the $800 in year one. That rule only covered tax years starting in 2021 through 2023. It has ended, so an LLC formed in 2026 generally owes $800 for its first year.

A 2026 budget law, SB 122, cuts that first-year tax to $400 for tax years beginning in 2027, 2028, and 2029. If you plan to form near the end of 2026, ask a tax pro how your formation date affects your first tax year.

A few cases are different:

• If you cancel within one year of organizing with the short form cancellation (Form LLC-4/8), the LLC will not owe the $800 for its first tax year.

• For tax years 2020 through 2029, a small business LLC owned only by a deployed member of the U.S. Armed Forces may not owe the tax if that owner is deployed during the year and the LLC operates at a loss or stops operating. Check the FTB 3522 instructions.

• The Form 568 booklet has a narrow rule for a tax year of 15 days or less with no business done in California. Ask a tax pro before you rely on it.

Want a second set of eyes on the filing steps? We'll go over them with you on a free Business Launch Audit. A lawyer or tax pro is still the right person for legal and tax advice.

Common mistakes

• Paying a company that mails an official-looking letter. The Secretary of State says you never have to use another company to file.

• Skipping the $800 because the first year used to be free. That exemption has ended.

• Listing only a P.O. box. The state wants a California street address.

• Applying for the EIN before the state accepts the LLC. The IRS says to form it first, or the number may be delayed.

• Letting the 90 days pass without the Statement of Information. The fee is $20.