LLC California Cost – How to Start Company in California!
If you have plans to start a California LLC, then you may have started to look into what it will take to get your business established and going.
But before renting an office space, hiring employees, or selling any products or services, you need to actually form your LLC.
Most likely you have come to this page because you are needing to form your LLC in California and get your business going and you aren’t quite sure how much it will cost to form your LLC.
Today we are going to review the LLC California cost of forming your company so that you make sure you know how much it costs and what it will entail.
Note: If you need help starting your Limited Liability Company and want to make sure it is done correctly, you will want to consider using an LLC formation service. Some of them are free + state fee while others cost a little more and take care of all of your legal paperwork and annual filings so you don’t have to miss a deadline.
Here are the top two Limited Liability Company Formation Services that we recommend:
|ZenBusiness||$39 + State fee|
They charge one of the lowest rates and are an overall best value. Their formation packages are loaded with features for a great price!
|IncFile||$0 + State fee|
For those on a strict budget, this is your cheapest LLC service. You can add on features as needed.
Bare Minimum Cost to Start a California LLC
In this section we are going to talk about the bare minimum costs to get your California Limited Liability Company formed.
We will also include some optional (but recommended) costs as well.
- Initial Filing Fee: $20 for the first “Statement of Information” filing (within 90 days of formation)
- Articles of Organization: $70 for online or hard copy submissions plus a $15 handling fee for hand-delivered filings.
- Business license in California: $50 – $150 and most companies are required to obtain a business license in California and the cost varies depending on the city in which the company is based.
- LLC Name Reservation Fee: $10 plus a handling fee for hand delivered filings
- LLC Formation Service: These range from $0 + State Fee and go up from there
California LLC Formation Costs – Everything You Need to Know
LLC Name Reservation Fee
If you are already set on a name for your business, we highly recommend that you apply for a name reservation.
California does not require you to reserve a name before starting your business, but if you are afraid someone else might use the name, then you may want to consider paying the $10 fee.
If you drop the form off in person, there is an additional $10 handling fee.
This gives you peace of mind that your perfect business name won’t be taken by someone else.
This is going to be perhaps one of the most important parts of forming your business – the California Articles of Organization.
Once accepted, the Articles of Organization is what officially registered your Limited Liability Company and locks in your business name.
The California LLC Articles of Organization fee is $70 for online and paper applications or $70 + $15 handling fee for dropping it off in person.
You only registered your business once, so this is not a filing fee that you will have to pay annually.
Business License Fee
Not all types of business entity will require a license, but many of them do, and each license has its own set of fees.
Your LLC may require one license or multiple licenses depending on the type of business you will be running.
Furthermore, depending on the type of business, your LLC may requires licenses at both the local and federal levels.
To find out which licenses and/or permits you will need, checkout the CalGold website .
Whether you like it or not, there are fees to form an LLC.
Each state has their own LLC formation Fee (state fee), even if you go the DIY route and file your own documents directly with the IRS, you still have to pay the state fee.
The most affordable option is to figure out the formation process on your own and just pay the state fee.
However, missing a step or doing something incorrectly could end up costing much more.
So if the DIY route doesn’t sound like the route you want to take, you may want to hire an LLC formation service.
These services take care of the registration process for you, so you don’t have to spend the time on research, paperwork, and filings.
Most of these services (like LegalZoom or ZenBusiness) offer basic LLC formation services like Articles of Organization filing, tax consultations, registered agent service, and phone/email support for a flat rate, with options to pay more for premium packages with premium services like Employer Identification Numbers, Operating Agreements, and expedited filing.
They form all types of business entities from LLC (limited liability company), California Corporation, S Corporation, Sole Proprietorship, Limited Partnership, Single Member LLC, non profit, etc.
A registered agent is simply a person or entity appointed to accept service of process and official mail on your business’ behalf.
You can appoint yourself, or in many states, you can appoint your business to be its own registered agent.
While you can serve as an agent for service of process for your own LLC, this puts pressure on you to keep up with business filings and potential legal disputes.
Sometimes it’s better to hand off that responsibility to a professional.
A Registered Agent service ensures that your annual reports and other forms are filed efficiently and on-time, saving you from the penalties of delinquent filings and the stress of having to do it yourself.
There are a lot of Registered Agent services out there but we always like to recommend Northwest Registered Agent.
They handle everything you need to form you LLC and they include a free registered agent for a year!
If you have questions or concerns about the LLC formation process or if it’s the best business structure for you, sometimes it’s best not to take chances and consult an attorney.
They’re not cheap, but they can provide essential business advice for an llc owner, professional filing assistance, and peace of mind.
Attorneys fees can range anywhere from $150 – $350 per hour or more while others might offer flat rate from $500 – $2000 to form you LLC and answer questions.
Of course, this all depends on the experience and location of the attorney as well as their specialties.
Foreign Qualification Fee
If you already formed your LLC in another state and are now expanding to California, then you will be completing an “Application to Register” rather than an Articles of Organization.
This requires a $70 payments and an additional $15 fee for hand-delivered forms.
Annual LLC Fees
Each biennial Statement of Information costs $20.
In the State of California, Annual Reports are filed biennially, meaning you pay the fee every two years.
Your LLC must file its first Statement of Information within 90 days of formation, then subsequently every two years.
LLC’s are “pass-through” entities, meaning that the business itself doesn’t need to file federal or state tax returns (read more about that here).
However California LLC’s must complete Form 3522 and pay an annual franchise tax.
The Franchise Tax is $800 per year plus an additional fee if your income is greater than $250,000.
If your LLC is setup as a Corporation, you won[‘t have to pay the Franchise Tax, but you will have to file a separate corporate tax return and pay the corresponding corporate tax rate.
Should I use an LLC Formation Service?
As you can see, there are several steps required to make sure that your LLC is formed correctly.
Hopefully this article helped you better understand what it takes to form and LLC in California as well as understand the associated costs.
If this all still seems overwhelming, then this is where using a formation service comes in handy.
If you have a little bit of flexibility in your budget or you know that the DIY route is not for you, then we strongly recommend hiring an LLC Formation Service.
An LLC formation service will make sure everything gets filed properly and expediently and they will make sure that all of your annual maintenance deadlines are not missed.
LLC formation services specialize in just that, forming businesses.
They streamline the process for you and are there to answer questions, fix mistakes, and help with legal advice and needs.
Many of them even take care of your yearly maintenance and filings for you and offer registered agent service as well.
Here are three popular LLC formation service options to give you an idea of what they offer:
ZenBusiness is one of the most affordable options and a great value.
They are a little smaller and newer than the other two mentioned below, but have excellent customer reviews and overall features.
Northwest Registered Agent also included a year of registered agent service with any LLC formation package. They also offer premium customer support that is unmatched to their competitors.
If you anticipate questions or more complex LLC formation, they are the top choice. You definitely get what you pay for and more with Northwest.
Northwest is our best overall value option.
$0 + State Fee
IncFile will form your LLC for free and include a full year of registered agent service with any LLC formation package.
IncFile is at the top of our list of the best LLC formation services, year after year.
If you decide to go the DIY route and form your own LLC but need help with the Annual Reporting, checkout the following services:
For $49, MyCompanyWorks will make sure you don’t miss a deadline. They are the most affordable annual report service out there and they offer a 100% satisfaction guarantee.
Their price varies depending on the service package that you choose, but their fully-managed services take care of everything so you don’t have to.
And if you want it all done for you, LLC formation and Annual Reporintg, then you may want to look into MyCorporation:
For $99 MyCorporation will form your LLC and also include a full year of their managed annual report service.
Forming your business correctly is going to be your first step to success.
It is also important to stay on top of your Statement of Information reports and Franchise Tax payments.
If you fail to file and pay them on time, your LLC will be deemed “delinquent” and required to make outstanding payments within 60 days.
The state has the right to suspend a delinquent LLC’s powers, rights, and privileges until it has filed its missing documents and made its overdue payments.
Late franchise tax payments will also incur a penalty amounting to 5% of the unpaid tax per month, up to 25% of the total tax.
This might all seem like a-lot, but many of these charges are one time fees and the annual maintenance fees are much smaller.
Now that you know the LLC California Cost – How to Start Company in California, you can get started!
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