📋 Business Formation in California
Forming an LLC in California requires filing Articles of Organization (Form LLC-1) with the California Secretary of State. The state filing fee is $70.
- ✓Choose a unique LLC name that includes "LLC" or "Limited Liability Company"
- ✓File Articles of Organization (Form LLC-1) — $70 fee
- ✓Designate a registered agent with a CA street address
- ✓File initial Statement of Information (Form LLC-12) within 90 days of formation — $20 fee
- ✓Pay the $800 minimum franchise tax by the 15th day of the 4th month after formation
- ✓Draft an Operating Agreement (not required by state but strongly recommended)
- ✓Obtain an EIN from the IRS (required for multi-member LLCs and employees)
- ✓Register with the CA Employment Development Department if you have employees
California LLCs are subject to the CA Franchise Tax Board (FTB). The minimum annual franchise tax is $800, regardless of income. Higher-revenue LLCs pay an additional LLC fee on top of the $800.
📅 Key Filing Deadlines & Fees
California's $800 minimum franchise tax applies every year, starting with your first year. New LLCs formed between January 1–December 31 of a year must pay by April 15 of the following year (after year 1).
| Filing / Requirement | Deadline | Fee |
|---|---|---|
| Articles of Organization | At formation | $70 |
| Initial Statement of Information (LLC-12) | Within 90 days of formation | $20 |
| Biennial Statement of Information | Every 2 years, by anniversary month | $20 |
| Annual Minimum Franchise Tax | April 15 each year | $800 minimum |
| Additional LLC Fee (>$250K gross receipts) | With tax return | $900–$11,790 |
| CA State Income Tax Return (Form 568) | April 15 (or Oct 15 with extension) | Varies |
👥 Employment Law Basics
California is an at-will employment state, meaning either party can terminate the employment relationship at any time — but California has some of the strongest employee protections in the nation.
- ✓Minimum wage: $16/hr statewide (2024); some cities higher (e.g., San Francisco $18.67/hr)
- ✓Meal breaks: 30-min unpaid meal break for shifts over 5 hours; 10-min paid rest break per 4 hours
- ✓Overtime: 1.5x pay for hours over 8/day and 40/week; 2x pay for hours over 12/day
- ✓CFRA/FMLA: California Family Rights Act provides up to 12 weeks of protected leave
- ✓Non-competes: Almost entirely unenforceable in California
- ✓CCPA: Consumer Privacy Act applies to businesses meeting revenue/data thresholds
- ✓Independent contractor test: Strict ABC test under AB5 — most workers presumed employees
📄 Relevant Legal Templates
Free downloadable templates commonly used by California businesses.
LLC Operating Agreement
Required best practice for CA LLCs
Employment Contract
CA-compliant at-will employment agreement
Independent Contractor Agreement
Must satisfy AB5 contractor criteria
NDA Template
Non-disclosure agreement for CA businesses
Service Agreement
Client services contract template
Liability Waiver
Release of liability for CA operations
❓ Frequently Asked Questions
How much does it cost to form an LLC in California?
The state filing fee is $70 for Articles of Organization, plus $20 for the initial Statement of Information. You must also pay the $800 minimum franchise tax starting in your first year. Total first-year cost is typically $890+ before any professional fees.
What is the California franchise tax and do I have to pay it every year?
Yes. California LLCs must pay a minimum $800 franchise tax every year to the Franchise Tax Board, regardless of income or activity. LLCs with gross receipts over $250,000 pay an additional LLC fee ranging from $900 to $11,790 depending on revenue.
When is the Statement of Information due in California?
The initial Statement of Information (Form LLC-12) is due within 90 days of forming your LLC. After that, it must be filed every two years during the anniversary month of your LLC's formation. The fee is $20 each time.
Can I have a non-compete agreement with employees in California?
Generally no. California Business and Professions Code Section 16600 makes non-compete agreements with employees unenforceable in almost all cases. There are narrow exceptions for business sales and partnership dissolutions.
Do I need a registered agent in California?
Yes. Every California LLC must designate a registered agent (also called agent for service of process) with a physical California street address. This can be an individual or a registered agent service.
Disclaimer: This page provides general legal information only. Laws change frequently. Always consult a licensed attorney in California for advice specific to your situation.