How much does an LLC cost in California? (details)

Forming a California LLC entails more than just paying the first filing fee; it doesn't have to be extremely expensive.

We outline all up-front and continuing costs for a California LLC and advise how to cut these out of the budget successfully.

How Much Does It Cost to Start an LLC in California?

There is a $70 filing fee for the Articles of Organization with the Secretary of State when forming an LLC in California.

This is an important step in creating your LLC's legal standing, which will allow it to function under Arkansas's regulations if approved.

Apart from the LLC filing fee mentioned above, additional expenses are associated with establishing a California LLC (Limited Liability Company).

LLC Costs in California

The filing fee for a California LLC Articles of Organization is $70

In a California Articles of Organization. This paper creates your LLC legally if it is accepted.

After formation, you only need to pay the $70 one-time charge; after that, you won't need to pay any more monthly or yearly fees to keep your California LLC active.

The form used to establish an LLC can vary by state; it may be referred to as the Articles of Organization.

In California, it is specifically known as the Articles of Organization. Despite these variations in naming, they all serve the same purpose: to legally create your LLC.

Reserving a business name in California entails a fee of $0

The creation of your California LLC Name Reservation is completed simultaneously if you want to file online. An additional $0 filing fee is required for an online name reservation when filing online.

If you want to file by mail, remember to include the Name Reservation with your application.

But before forming your LLC, you have to wait for the Name Reservation to be approved. Even though filing by mail can save you a few bucks, it can take longer to form your LLC.

How much does a DBA cost?

A DBA in California is filed at the county level, so the filing cost can vary. However, it's important to note that obtaining a DBA is optional for California LLCs since it's not a mandatory requirement.

California Registered Agent Fee ($0 to $125/ annually)

Under California law, every LLC formation requires the appointment of a Registered Agent.

Your California Registered Agent acts as the liaison for legal documents and state notifications on behalf of your LLC, necessitating a physical address within the state and availability during regular business hours.

You can appoint yourself, a trusted associate, or a family member as your Registered Agent without incurring additional expenses.

Alternatively, hiring a Registered Agent service costs between $100 and $300 per year. These services offer additional business support and safeguard your privacy.

Hiring a Registered Agent service is a good idea if:

• You lack a physical address in the state (California law mandates Registered Agents to have an address within the state).
• You prefer to keep your address private (some companies allow you to use their address for confidentiality).

LLC Operating Agreement Fee ($0)

A California LLC Operating Agreement functions as a written contract among the LLC's members. It outlines specific details regarding ownership, how the LLC is managed, and the distribution of profits.

Both Single-Member and Multi-Member LLCs should create an Operating Agreement, maintain it within their business records, and provide each member with a copy.

Online services generally charge between $50 to $200 for crafting an LLC Operating Agreement.

LLC EIN Number Fee ($0)

An EIN, also referred to as an Employer Identification Number or FEIN (Federal Employer Identification Number), is essential for handling tax filings, setting up an LLC bank account, and potentially facilitating employee hiring.

While some platforms may charge a fee, you can obtain an EIN for your LLC free of charge directly from the IRS. The process to apply online is simple and typically takes only a few minutes to complete.

California LLC Annual Franchise Tax Report Fee ($150/year)

California requires LLCs to keep their information current by filing an Annual Franchise Tax report.

This ensures your California LLC maintains good standing and complies with state regulations, enabling it to sustain its operations. You verify the details on the Annual Franchise Tax, submit it to the California Secretary of State, and pay the required fee for the Annual Franchise Tax report.

The Annual Franchise Tax for a California LLC amounts to $800 per year. This fee is paid annually for as long as your LLC is active.

California LLC Statement of Information ($20 every 2 years)

Every two years, California requires you to update your LLC’s information by filing a Statement of Information.

You simply confirm the information on the Statement of Information, file it with the California Secretary of State, and pay the $20 fee. This fee is paid biennially (every two years) for the life of your LLC.

California Business License and Permit Fees

The locations and industry sectors in which your LLC operates in California may require you to apply for additional business licenses or permits. For your LLC's specific operating area, for example, it may be necessary to obtain a city business permit.

Location and industry specifics can affect the cost of these licenses or permits. These costs are usually fair. Local governments such as towns, cities, or counties are responsible for administering some licenses and permits, while the state issues others.

LLC Taxes

California LLC owners face a range of tax obligations, leading to varying annual costs.

Some of the taxes LLC owners pay include:

• Federal taxes
• State income tax
• Local income tax
• Business taxes
• Self-employment taxes
• Sales and use tax
• Payroll tax (if you have employees)
• Property tax (if the LLC owns property)

The Taxes of Your California LLC taxes are affected by your industry and business activities, making it difficult to predict. Every business is different, and the taxes your LLC owes depend on your specific situation.

Hiring an Accountant

Accounting fees can vary, but in general, expect to pay about $300 a year for basic tax returns and up to $900 for more comprehensive filings.
The best person to help you determine your small business tax liability in California is a certified accountant.

While accounting costs can vary, you should generally budget $300 for simple tax returns and up to $900 for more complicated filings annually.

California Secretary of State

If you're curious about the expenses involved in starting a California LLC, feel free to contact the California Secretary of State for detailed information.

California LLC Costs FAQs