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What steps do I need to take to form a limited liability company (LLC) in California?

Picture of Chris Battis By   ·  1 minute read

To form a limited liability company (LLC) in California, you should take the following steps:

  1. Choose a Name for Your LLC: Select a unique name that meets the requirements of California law. The name should not be the same as or too similar to any existing LLC or corporation in California to avoid any confusion.
  2. File Articles of Organization: File the Articles of Organization (Form LLC-1) with the California Secretary of State. This form includes the name of the LLC, purpose of the LLC, name and address of the LLC’s agent for service of process, and the type of management structure the LLC will have. The LLC-1 form can be filed online or by mail, with a filing fee of $70.
  3. Draft an Operating Agreement: The operating agreement is an internal document of the LLC, which outlines important information such as the roles and responsibilities of the members, decision-making processes, and how profits and losses will be distributed. It is not required by law for an LLC in California, but it is highly recommended considering the complexity and potential risks involved in running an LLC.
  4. Obtain Necessary Business Licenses and Permits: Depending on the nature of the business and the location, certain licenses and permits may be required by state or local agencies in California. Check with the California Department of Tax and Fees Administration, local government agencies, or consult with an attorney to ensure compliance with all necessary laws and regulations.
  5. Obtain an Employer Identification Number (EIN): An EIN is a unique identification number assigned by the Internal Revenue Service (IRS) to an LLC for tax purposes. You can obtain an EIN online, by mail, fax, or phone from the IRS.
  6. Comply with Ongoing Requirements: As an LLC in California, you are required to file an annual Statement of Information with the California Secretary of State, pay the annual franchise tax, and maintain proper corporate records, including minutes of meetings.

It is important to note that the process of forming a limited liability company (LLC) in California can be complex, and failure to comply with all legal requirements can result in penalties or legal actions against the LLC. Consider consulting with an experienced attorney to guide you through the process and ensure compliance with all relevant laws and regulations.