How Much Does an LLC Cost In California - Fees & Taxes in CA
California is one of the largest and most attractive states for business. But to see if you can really benefit from doing business in this state, it is important to calculate how much an LLC in California costs. In this article, we're going to explore:
- How much it costs to start an LLC in California;
- What taxes and other regular payments you'll have to pay after business registration;
- What reports you need to file;
- What else is important to consider when calculating the LLC price in California.
If you want to quickly find the cheapest way to start a company here, we recommend you to contact one of the popular services that can professionally help you open a company. The specialists will help you choose the best solution to quickly start a business.
We also recommend studying the step-by-step guide on how to open an LLC in California, which will help you understand not only the cost but also the sequence of actions.
How Much Does an LLC Cost in California?
Below, we take a detailed look at what LLC fees in California are relevant for 2022.
California LLC Online Filing Fee
When submitting Articles of Organization, you will encounter Secretary of State filing fees. Once registered, your company is considered an established legal entity and can begin operations.
It is most convenient to file your Articles of Organization online. The LLC filing fee in California will be $70.
Please note that for the period of July 1, 2022 through June 30, 2023, the state has waived the company’s formation fees.
Statement of Information Fee
Every company is required to file a Statement of Information every two years. Therefore, in California, you do not file an annual but a biennial report. The deadline for filing depends on the date of formation. The state government gives you a six-month period to do so.
For example, if your company was incorporated in January, you are required to file the report between September and February. You can find more information about the deadline on the state government's official website.
You can submit your report either by mail or online by filling out a Statement of Information (Form LLC-12) or a No-change Statement (Form LLC-12NC).
California LLC fees for sending the report are $20.
If you do not file a Statement of Information by the deadline, you will have to pay a fine of $250. Later, the entity may be dissolved by the state government.
Registered agent (Agent of Process, Resident Agent) Fee
Under state law, each company is required to have a registered agent. Essentially, this is your agent who will receive correspondence from the state government and perform service of process.
A registered agent can be:
- An individual who is a permanent resident of the state. This can be the owner of a company or any other adult who has an address in California;
- A commercial company that is registered in California. The cost of professional RAs usually starts at $100. You can see a list of the best companies in our ranking.
The cost of registered agent services should be included in the cost to start an LLC in California because you should already have your own RA when you incorporate a company. The agent's information has to be included in the Articles of Organization.
Initial Report Fee
The initial report in California is no different from the Statement of Information, but it should be filed within 90 days of the company’s formation.
There is also an LLC fee of $20 for this report in California (the same fee as for the biennial reports).
Cost to Form a Foreign LLC in California
If you already have a company in another state, you can register it in California as a foreign LLC. This method is convenient for expanding your business, creating a serial LLC, and even tax optimization.
For a foreign company, the California LLC filing fee is $70.
You will need to file a Foreign Limited Liability Company Registration Statement (Form LLC-5). You can do this most easily online, but you may also send the documents by mail.
Cost to Form a Domestic LLC in California
Want to know how much an LLC costs in California? First of all, you will need to pay a state company filing fee of $70.
But it is also worth including a registered agent fee in the cost of starting an LLC in California in advance. In addition, you may need to reserve a company name or DBA.
Cost to Form a Series LLC in California
The state does not have a statutory option to form a Series limited liability company, but the state recognizes the existence of this company type.
So, you can form a Series LLC in another state and register your company as a foreign company in California. In this case, the LLC in California cost will be, as for other foreign ventures, $70.
Cost to Form a PLLC (Professional LLC) in California
In California, there is no fundamental difference between LLC and PLLC in terms of registration forms and fees. The cost to start a professional company in the state will also be $70 + other costs (registered agent, DBA, etc).
Business License Renewal Fee
If you plan to do business in the state of California, you will most likely need a salesperson's license. This type of license is needed if:
- You are doing business in the state;
- You lease or sell tangible property that is subject to retail sales tax.
You can obtain a vendor's license from the Department of Taxes and Fees website at no charge.
In addition, most companies in the state are required to get business licenses at the city or county level to ensure local taxation. If you plan to do business in more than one city or county, you may need to get a separate license in each of them.
You can find out the cost and conditions of licensing on the websites of the territorial entities. CalGold, a service for businesses in California, can also help.
Also, keep in mind that some professional activities require federal licensing.
All types of licenses are paid for separately and require periodic renewal.
Franchise Tax
All limited liability companies that conduct business in the state are required to pay an annual California LLC fee of $800 or more, depending on income.
A business owner that has not conducted any activities in the state and whose tax year is less than 15 days is exempt from paying the annual tax for the first year.
You should calculate the California LLC annual fee by the 15th day of the 6th tax month of the year.
| Income | Fees amount |
|---|---|
| Up to $250 000 | $800 |
| $250 000–$499 999 | $900 |
| $500 000–$999 999 | $2500 |
| $1 000 000 – $4 999 999 | $6000 |
| $5 000 000 and more | $11 790 |
You can also use the Filing Fee Calculation (FTB 3536) to estimate the LLC fee in California.
Other LLC Filing Costs
You probably still have a lot of questions. Are there any additional fees? How much does an LLC cost in California in total? Of course, you'll need to determine what the additional charges may be. These fees are not mandatory but can be applicable in certain cases.
LLC Name Reservation
You can reserve the name of your entity in advance for up to 60 days. This solution is helpful if you've already chosen a proper name but are planning to file your Articles of Organization later.
In California, company name reservation price is $10.
DBA Registration
In California, there is no state DBA registration. However, you can register a DBA in the desired city or county. The cost depends on the local government’s requirements.
Certified Document Copies
You can order certified copies of business documents from the Secretary of State. For LLCs in the state, the price of such papers is as follows: $6 for the first page and $0.50 for each additional page.
Certificate of Status
Certificates of Status (Certificate of Good Standing) may be ordered through the Secretary of State's website. In this case, the California LLC fees are $5.
Such a certificate is often required for a loan from a bank or any other lending institution.