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PCF makes it fast, easy and cost-efficient to Form a LLC in California
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AND keep up with recurring California LLC requirements
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PCF has helped thousands of businesses successfully form a LLC Online
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Choose PCF to help you form your California LLC and we will notify you each year well in advance of the due date for
any required California LLC reporting requirements
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If you're ready to form a California LLC online now
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Check our California LLC options and prices
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If you need more information about forming a California LLC online, the information below may help you understand the requirements and implications of
forming a LLC in California.
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Do I need a lawyer to form a California Limited Liability Company (LLC)
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The short answer is no.
The state of California does not legally require a lawyer to form a
California LLC.
Our detailed LLC Information page may help you understand some
of the implications of forming a California LLC.
However, if there is anything about forming an LLC in California
that you're not sure about you should seek the advice of a competent California lawyer, a California accountant,
or both before you form a LLC in California.
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Once you have made the decision to form a LLC in California, a California lawyer
can file your documents and act as a middle man for a few hundred dollars an hour; or you can use an online service provider like PCF
to perform these services and save money that you can use in your new California LLC.
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Put the money you save with PCF right where it belongs
into your new California LLC
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If you're not 100% satisfied with our service we'll give you your fees back
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What do I have to do to form a California Limited Liability Company (LLC)
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1. Choose a name for your California LLC
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- PCF will check to make sure that your California LLC name is available, conforms to state of California LLC naming
regulations, and will reserve the LLC name with the California Secretary of State.
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Your California LLC name can identify the type of products and services your business will provide;
or it may be the name of the founder; or it can be a combination of the two or something else.
In any case, the California LLC name that you choose must be distinguishable from the name of any other registered California LLC or other
business entity and the name must also be different from any reserved names on record with the state of California.
Your California LLC name must not imply that it was formed for a purpose other than that stated in your
Articles of Organization and your California LLC name must not be a name that is likely to mislead the public.
A California LLC name must include, as the last words of the name, the words "Liimited Liability Company" or the abbreviation "LLC" or "L.L.C.".
The words "Limited" and "Company" may be abbreviated to "Ltd." and "Co.," respectively.
In addition, the name of a California LLC must not include the words "Bank", "Trust", "Trustee", "Incorporated", "Inc.", "Corporation", "Corp.", "Insurer" or "Insurance Company" or any other words suggesting that the California LLC is in the business of issuing policies of insurance and assuming insurance risks.
It's important to choose a good name for your California LLC because if you want to change it after you form your California LLC you
will have to file amended Articles of Organization with the California Secretary of State (and pay a fee).
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2. Select an official address and a Registered Agent for your California LLC
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- PCF can act as the official Registered Agent for your California LLC.
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Every California LLC must have an address that is physically located in the state of California.
This address is "registered" with the California Secretary of State.
The Registered Address is where official and legal correspondence can be delivered.
The individual or company that is registered with the state of California to receive all correspondence on behalf of the California
LLC is called a "Registered Agent".
You may act as your own Registered Agent, however, many California LLCs hire a Registered Agent because they don't have a physical
address within the state of California.
Some California LLCs hire an outside Registered Agent to provide a distinct level of privacy.
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3. Determine who will be Members and who will Manage your California LLC
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- PCF will include Guidelines for Managers in your California LLC documents.
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The owners of a California LLC are called Members - not partners or shareholders.
(California LLCs do not issue stock).
Members make all business decisions and realize the financial benefits generated by the California LLC.
Division of ownership and distribution of profits are decided by private agreement among the members.
Each California LLC must have at least one member.
Members need not live in the state of California or be citizens of the United States.
Managers are responsible for the day to day operation of the California LLC.
Members elect or appoint Managers and have the power to remove them.
Managers may or may not be Members of the California LLC.
Management for your California LLC may be defined in your Articles of Organization or, more commonly, in an Operating Agreement.
Members may acquire interest in a California LLC at formation or after formation in accordance with the Articles of Organization or the Operating Agreement.
Termination of membership from a California LLC may be specified in the Operating Agreement.
If a Member is terminated pursuant to the Operating Agreement, that Member may be entitled to receive a return of his or her contribution to the California LLC.
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4. Determine how you want to be taxed
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The IRS does not recognize an LLC as a classification for federal tax purposes.
California LLC members can elect for the IRS to tax the LLC as a sole proprietorship, partnership, C Corporation, or S Corporation.
This decision may be made after the California LLC is created.
If a single member California LLC does not declare a tax classification it is taxed the same as a sole
proprietorship.
A multiple member California LLC that does not declare a tax classification is taxed as a general partnership.
More specific federal LLC tax information can be found at the
IRS web site.
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| The California Corporate Income Tax Rate is 8.84%. For California Corporate Tax Information click here. |
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5. File Articles of Organization with the California Secretary of State
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- PCF can draft Articles of Organization that are specific to your California business and file them with the California Secretary of State.
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A California Limited Liability Company is a type of business that is authorized by the state of California - not by the federal government.
In order to form a LLC in California you must file Articles of Organization with the California Secretary of State.
The Articles of Organization must include certain specific information about your California LLC.
If the Articles do not conform exactly to state of California requirements they will be rejected.
You may subsequently amend the Articles of Organization for your California LLC but you will have to pay a fee to the state of
California in order to make the changes official.
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6. Get a Federal Employer Identification Number (FEIN)
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- PCF can prepare and file the forms to obtain an FEIN for your California LLC.
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A Federal Employer Identification Number, also known as a Federal Tax Identification Number, is used by the IRS to identify a
business entity.
An FEIN is like a Social Security Number for your California LLC.
All California LLCs electing to be taxed as a C-Corporation or S-Corporation are required to have an FEIN.
If you do not elect to have your California LLC taxed as a Corporation you may still need to get a FEIN if it is composed of multiple members or
if you plan to have employees.
If you plan to form a single-member California LLC you may not need a separate FEIN for the LLC if you have no employees.
The sole member of a single member California LLC may be able to use his or her Social Security Number instead of applying for an FEIN.
You may request an EIN for your California LLC for banking or state tax purposes, but an FEIN may not be required for federal tax purposes depending
on your business circumstances.
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What do I have to do after I form my California LLC
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1. Conduct an Organizational Meeting and adopt an Operating Agreement
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- PCF can draft an initial Operating Agreement for your California LLC that is based on your specific California
business requirements.
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An Operating Agreement defines the rules by which your California LLC will operate.
It is the core document that is referred to when issues concerning your LLC need to be resolved.
Operating Agreements may include requirements for almost anything that involves the management and operation of your California LLC.
By having an Operating Agreement all Members will be provided with a clear set of rules they have agreed upon thus reducing the likelihood of
disagreement in the future.
Items commonly included in an Operating Agreement for a California LLC:
- Rights and duties of Members
- Member contributions
- Record keeping and reporting requirements
- Distribution of profits
- Allocation of losses
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- Management duties
- Meeting requirements
- Voting requirements
- Admission and termination of Members
- Dissolution procedures
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Each California LLC is required to have an Operating Agreement.
The California LLC Operating Agreement may be adopted either before or after the filing of the California LLC Articles of Organization.
Having an Operating Agreement will save you a lot of time and money should conflict arise down the line.
As your California LLC grows over time, you may amend your Operating Agreement as necessary.
When your California LLC has an Operating Agreement your business will be governed by your own rules and not some canned business rules created by
the state of California.
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2. Open a Business Bank Account in California
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It's very important that you have a separate business bank account for your California LLC.
Mixing personal and business funds may get you in a lot of trouble with the tax man down the line.
It's a good idea to contact the bank before you open a business bank account.
Specific requirements vary from bank to bank.
In most cases you will need a FEIN, a copy of your California LLC Articles of Organization, and a resolution identifying authorized signers
if those names are not listed in the Articles.
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3. Obtain Business Licenses from the cities and counties in which you plan to do business
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Note that forming a California LLC doesn't take the place of obtaining a business license, tax
registration certificate, or other required business permits.
A California LLC merely creates an ownership structure that limits the owners' personal liability.
You may still need to take care of getting set up to do business with your local government.
Depending on the nature of the business and the location of your California LLC you may need to get one or more city
business licenses or permits.
The business licenses or permits that are required for your California LLC vary depending on your business activities
and the specific locations within the state of California in which you want to conduct business.
If your California LLC will be selling products in California you may be required to obtain a Reseller's Permit from the appropriate
California state agency.
If your California LLC will be selling products in California you will also be responsible for all applicable local and state of California
sales taxes if there are any.
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4. File the required California LLC reports
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Each California LLC must file a Biennial Statement of Information with the California Secretary of State.
The California Biennial Statement of Information includes basic information about your California LLC.
Failure to submit a properly completed California Biennial Statement of Information to the California Secretary of State on or before the
due date may subject the California LLC to being administratively dissolved in the state of California or having its authority to
transact business in the state of California revoked by the California Secretary of State.
Penalties may accrue if you fail to file any California LLC Biennial Statement of Information to the California Secretary of State
by the due date.
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5. Keep proper records of your California LLC on file
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Keep the following records on file and available at the principal business office of your California LLC:
- Names and addresses of all Members and Officers of the California LLC
- Articles of Organization for the California LLC and any Amendments to them
- Copies of all tax returns and reports for the California LLC for the last 3 years
- If the California LLC has an Operating Agreement, a copy of the Operating Agreement and any Amendments
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California Foreign LLC Qualification
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You want to do business in the state of California but are registered as a Domestic Corporation or LLC in another state.
In order to legally conduct business in the state of California you must register with the California Secretary of State as
a California Foreign Corporation or LLC.
The process of registering as a Foreign Corporation or LLC in the state of California is called California Foreign Qualification.
The process of California Corporation or LLC Foreign Qualification is similar to the process of forming a Domestic Corporation or LLC in the state of California.
Your original formation documents and Corporate Bylaws, or Operating Agreement for LLCs, apply to your California Foreign Corporation or LLC.
The Board of Directors and Officers of your Domestic Corporation, or Members and Managers in the case of LLC, have the same roles in the California Foreign Corporation or LLC.
For specific requirements to qualify as a Foreign LLC in the state of California click here.
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