How To Form A Limited Liability Company (Llc) In California
After reading this article you should have a better understanding of how an LLC is formed in California. You’ll learn how to register your LLC with the California Secretary of State, what documents you need to open your business checking account, and how to find out if you need to obtain licenses or permits for your limited liability company. Important links are included at the bottom of the article, including where to download required forms for registration.
Check LLC name availability
Check the availability of the name you want to use for your limited liability company (LLC) on the California Secretary of State web site under Business Programs > Business Entities > Business Search. If the name you want is not already taken by an LLC or is not too similar to an LLC registered with the Secretary of State, then you can use that name.
File the Articles of Organization
Complete the Articles of Organization (Form LLC-1). You can download the form at California Secretary of State web site under Business Programs > Business Entities > Forms, Samples and Fees. You must designate an Agent for Service of Process, which can be either an individual living in California or a corporation registered in California, to accept court papers on your behalf should your LLC ever be sued. Your LLC cannot be its own Agent for Service of Process. The $70 filing fee for Form LLC-1 must be submitted with Form LLC-1 and mailed to the California Secretary of State or delivered in person.
File the Statement of Information
In a few weeks you will receive a date stamped copy of the Form LLC-1 you filed from the Secretary of State. Enclosed in the same envelope will be a Statement of Information (Form LLC-12) for you to complete and return to the Secretary of State. . You must file Form LLC-12 within 90 days of your LLC registration and include a check for the $20 filing fee. Form LLC-12 is a biennial statement, which means it has to be filed every two years.
Get an EIN
Register for a Federal Employer Identification Number (EIN) on the IRS web site under Businesses > Employer ID Numbers. You should get an EIN for your LLC even if you don’t plan on hiring someone to work for you because you will need it when applying for a business bank account (unless you don’t mind using your SSN!).
First meeting and operating agreement
Hold your LLC’s first meeting and take meeting minutes (even if you are a Single Member LLC). The meeting should essentially cover the name and business premises of the LLC, when/where the LLC was formed, and its appointed members/managers. You will need these minutes to open your business bank account. You should also create your LLC’s Operating Agreement at this time. The Operating Agreement is for your internal records and is not to be provided to the Secretary of State or the bank.
Open a business bank account
Open a business checking account for your new LLC. You will need to show them your EIN, filed Form LLC-1, and the first meeting minutes of your LLC, along with a government photo ID of its appointed member/manager.
Determine your tax obligations
Complete and file California Form 3522 (LLC Tax Voucher) with the Franchise Tax Board. Include a check for $800 to pay for your annual LLC tax. Read the instructions on Form 3522 carefully to determine when you should file and pay. Depending on your business type and location, you might be subjected to paying additional taxes (besides federal and state). You can determine your company’s tax obligations by visiting the California State Board of Equalization website.
Determine your license or permit requirements
Your company might need a license or permit in order to operate in California. Go to the CalGOLD website at to see if your business needs one.
When you are completing Forms LLC-1 and LLC-12, your company’s name must end with the words “Limited Liability Company”, “Ltd. Liability Co.” or the abbreviation “LLC” or “L.L.C.” Failure to do so will result in a denial of your application and will delay your registration process.
About the Author
Jovana Jerinic is a Certified Public Accountant and Certified QuickBooks ProAdvisor providing accounting and tax services to individuals and small businesses. Jovana Jerinic CPA specializes in tax return preparation, tax planning, IRS representation, and QuickBooks setup, training and support. Our CPA firm also provides bookkeeping, payroll processing, and small business consulting. For more information, please visit Orange County CPA.
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