Fact Checked by Editorial Staff
Perhaps you are hoping to form a California LLC. People assume how to start an LLC is difficult and costly. However, it’s generally not difficult, and the cost would vary across states. We have all the info you need to know about the cost of forming an LLC, particularly the LLC cost in California.
On this page, you’ll learn about the following:
California LLC Cost of Filing
Here are the costs involved in forming an LLC in California.
Cost of Filing Formation Certificates
The California Certificate of Formation is responsible for the majority of the cost, which could also vary depending on whether you’re forming a domestic LLC or a foreign LLC. Still, you can file both at the California Secretary of State.
California Domestic LLC
- Online Filing costs $70 + $800 Franchise Tax.
- Filing Statement of Information within 90 days of registration costs $20.
- By Mail: Fill out the application form, and send it to Secretary of State Business Services, 1500 11th Street, Sacramento, CA 95814. Costs $70 + $15 for counter drop off (non-refundable).
California Foreign LLC
- Online Filing costs $70 + $800 Franchise Tax.
- Filing Statement of Information within 90 days of registration costs $20
- By Mail: Fill out the application form, and send it to Secretary of State Business Services, 1500 11th Street, Sacramento, CA 95814. Costs $70.
Note that filing online is ideal, not only because you need to go to the Secretary of State office, but also it would be faster. You won’t have to wait in a queue in doing so.
California LLC Formation Service or Registered Agent Fee
You need a registered agent to form an LLC in California, hence, added costs for service fees. Here are three of the best LLC services on our list that will provide you with registered agents to ease your worries.
LLC Service | Our Rating & Pricing | Top Features | Learn More |
#1 TOP PICK  | $0 + State Fees |
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Business Permits and Licenses
The business licenses depend on your business’s activity and location and are renewed yearly. As such, the cost will vary. Check the California Department of Tax and Fee Administration for regulatory boards or agencies requiring licensing.
Taxes Paid By The LLC in California
Any business in California has three types of taxes to be paid. Income Tax, Corporate Tax, and Franchise Tax. LLCs are exempted from the Corporate Taxes due to the pass-through taxes. The LLC members are liable to pay income taxes and Franchise tax. Apart from these three taxes, every LLC in California has to obtain EIN, there is no fee for obtaining EIN in California. On the other, a certain amount of Sales Tax has to be paid by the LLCs.
Franchise Tax
Franchise Tax is a minimum mandatory tax paid by the LLCs. Any LLC (domestic or foreign) registered with California state has to pay $800 whether it is running or inactive. As long as the LLC is registered it has to bear the Franchise Tax.
According to the Franchise Tax Board of California, this is a privilege tax for running a business in California and has to be paid by the LLCs following some terms and conditions.
Franchise Tax According to Income Tier
Following are the different income tiers based on which the amount of tax amount is calculated.
- Income from $0 to $250,000: $800 Franchise tax + $0 LLC Fee > Total $800
- Income from $250,000 to $499,999: $800 Franchise tax + $900 LLC Fee > Total $1700
- Income from $500,000 to $999,999: $800 Franchise tax + $2500 LLC fee > Total $3300
- Income from $1,000,000 to $4,999,999: $800 Franchise tax + $6000 LLC Fee > Total $6800
- Income above $5,000,000: $800 Franchise tax + $11,790 LLC fee > Total $12,590
Federal Tax
Apart from these above-mentioned state taxes, California LLCs have to pay a Federal Tax of 15.3% on the total income generated by the LLC.
Cost Comparison Among States
California is one of the best states to start an LLC. The state is bounded by Arizona, Nevada, Colorado, and Oregon. Here’s the cost comparison among the neighboring states of California.
| State | Filing Fee | Annual Fee/Biennial Fee |
| California LLC | $70 | $800 + $20 (every 2 years) |
| Oregon LLC | $100 | $100 (Annual) |
| Nevada LLC | $425 | $350 (Annual) |
| Arizona | $50 | $0 |
| Colorado | $50 | $10 (Annual) |
Comparing the neighboring states, we can say Arizona has the least LLC fees, however, California is the most favorable among all for the businesses as it has immense tax advantages. Apart from that, the state has massive business opportunities.
Other Costs
- California Name Reservation: $10 for online filing or by mail; $20 for drop off requests
- Doing Business As (DBA): Cost varies between counties for both online filing and by mail
- Certified Document Copies: $5 + $1 for 1st page and $0.50 for succeeding pages.
- Certificate of Good Standing: $5 per entity
- Business Domain Name and Website: depend on your preference, but domain name could be as low as $2.99/yr at NameCheap, and web hosting is at least $30/mo at Kinsta.
- Online workspace: at least $4.20/mo for GSuite.
- Business Insurance: would vary depending on insurance type–whether general liability insurance or professional liability insurance–and coverage.
- Dissolution of California LLC: $0 filing fee; $15 for faster service
F.A.Qs
It is possible to form an LLC without professional help, but forms still have associated costs, regardless of where your LLC is formed.
It is difficult to say whether forming an LLC is expensive. Nevertheless, the cost could be anywhere from $40 to $500. If you refuse to hire professionals, you’ll still have expenses like form fees to cover.
The need to separate personal money from business funds, thus necessitating the creation of a business bank account for your LLC.
How Much Does It Cost to Maintain an LLC in California
To maintain an LLC in California you will need to pay a biennial fee of $800 + $20 along with Income tax, Franchise tax and federal taxes.
First and foremost, it is important to recognize that there are certain initial expenses associated with forming an LLC in California. These costs typically include the filing fee for the Articles of Organization, which is required to officially establish your business entity with the state. Additionally, California LLCs must also pay an annual minimum franchise tax to the state, regardless of whether the company is profitable or not. These initial costs are necessary to create a legally recognized entity that offers liability protection for its owners.
However, the expenses do not end there. Maintaining an LLC in California entails ongoing costs that must be factored into your financial planning. One significant cost is the annual Statement of Information filing fee, which must be submitted to the California Secretary of State to update the state on crucial information about the LLC, such as the names and addresses of members and managers. Failure to file this statement can lead to penalties and the potential suspension of your company’s business entity status.
Aside from the annual statement filing fee, California LLCs are also required to pay an annual LLC minimum franchise tax. This tax is calculated based on the total income or property value of the LLC, with a minimum amount due even if the company did not generate any profit in the given year. While this tax is a necessary financial obligation, business owners must account for it in their budgets to avoid any surprises or penalties.
Moreover, there are additional costs that may arise depending on the unique needs and circumstances of your LLC. For instance, some companies may choose to hire a registered agent to receive legal documents and official notices on behalf of the business, which comes at an annual fee. Likewise, LLCs that engage in specialized activities or industries may need to obtain permits or licenses, each with associated fees. These variable costs are important to consider when evaluating the total expense of maintaining your LLC in California.
In conclusion, the cost of maintaining an LLC in California should not be underestimated or overlooked by business owners. By understanding and planning for the various expenses involved in compliance with state regulations, you can ensure the financial health and stability of your company. While these costs may seem burdensome at times, they are an essential investment in the long-term success and legal protection of your business. With prudent financial management and foresight, you can navigate the expenses associated with running an LLC in California and set your company up for sustainable growth and prosperity.
In Conclusion
The cost of California is much lower compared to other forms of business. Apart from the state filing fees and annual taxes, you might bear the cost of the registered agent. Compare the price of professional LLC services and choose the most affordable one.
Como y donde pago los 800 de mi corporacion cual el email.