How much does it cost to form an LLC in California in 2026?

The Articles of Organization filing fee is $70, paid once to the Secretary of State. That is the small number. The real cost is the $800 minimum annual franchise tax owed to the Franchise Tax Board starting in the first tax year, plus $20 every two years for the Statement of Information. A first-year California LLC with a commercial registered agent typically spends around $950 in combined state fees.

Does California require LLCs to pay the $800 franchise tax even with no income?

Yes. The $800 minimum annual franchise tax under Cal. Rev. & Tax. Code §17941 applies to every LLC doing business in California, registered to do business in California, or organized in California, regardless of whether the LLC had any revenue. A single-member LLC with zero income and zero activity still owes the full $800 each tax year. Disregarded-entity status for federal purposes does not change the California rule.

Can I avoid the California franchise tax by forming my LLC in Wyoming or Nevada?

Usually no, if you live in California or operate from here. California imposes the $800 franchise tax on any LLC that transacts business in California, which includes a California-resident member running the business from a California address. You would register the Wyoming or Nevada LLC as a foreign LLC in California, pay the same $800, and end up with two filings instead of one. The escape works only when neither you nor your operations touch California.

Does California have an annual report for LLCs?

California calls it a Statement of Information (Form LLC-12), not an annual report, and it is biennial rather than yearly. The fee is $20. The first filing is due within 90 days of formation; every subsequent filing is due by the end of the anniversary month on a two-year cycle. The Statement of Information is separate from the franchise tax return filed with the FTB.

How long does it take to form a California LLC?

Online filings through bizfile Online typically clear in 8 business days. Mail filings take around 21 business days. If you need faster turnaround, California offers counter-drop expedited service at $350 for 24-hour and $750 for same-day, but only for paper filings delivered in person or by courier to the Sacramento office.

Does California require an operating agreement?

California is widely treated as an operating-agreement-required state. Cal. Corp. Code §17701.02(s) defines the operating agreement and the California Revised Uniform LLC Act is written on the assumption that every LLC has one, whether oral, written, or implied. An LLC without a written agreement falls back on statutory defaults for management, voting, and member rights, which is rarely what the members actually want.

What is the California gross-receipts LLC fee and when does it apply?

Under Cal. Rev. & Tax. Code §17942, California imposes a tiered LLC fee on top of the $800 minimum franchise tax once California-sourced income crosses $250,000 in a tax year. The tiers are $900 for $250,000 to $499,999, $2,500 for $500,000 to $999,999, $6,000 for $1,000,000 to $4,999,999, and $11,790 for $5,000,000 and above. Combined with the $800 base, a top-tier LLC pays $12,590 per year to the FTB.

Do California LLCs pay state income tax?

The LLC itself does not pay California personal income tax, but the $800 minimum franchise tax and gross-receipts LLC fee apply regardless of income classification. Members then pay California personal income tax on their share of pass-through income at the state's graduated rates, up to 13.3%. An LLC electing C-corp treatment owes the 8.8% California corporate franchise tax in place of the member-level pass-through.

California LLC: fees, filing steps, and 2026 costs

$70 Filing fee Online filing available

$980 Year 1 estimate Filing + first year tax + RA

8 days (expedited 24h) Approval Mail ~21d

$810 per year Ongoing

Where California fits, and where it doesn't

Good fit for California

You live in California and your business operates here; you have real estate in California and need a California LLC to hold it; you run a professional services firm with California clients and a California address; you are raising capital from investors who need a California-domestic entity; you have already resigned yourself to the $800 and want to stop overthinking it.

Skip California when

You are a non-resident with no California income, no California customers, and no California property, and you have heard California is the 'big state' so it must be the right pick. It is not. California will hit you with the $800 minimum franchise tax, the biennial Statement of Information filing at $20, and a gross-receipts LLC fee once you cross $250,000 in California-sourced income. For a non-resident online business with no California ties, Wyoming or Delaware costs a fraction of that.

What a California LLC actually costs

Formation filing fee Paid once at formation $70
Commercial registered agent Annual, estimate $100
Annual report fee Every 2 years $20
Franchise tax minimum Minimum, scales with revenue $800
Year 1 total estimate Formation plus first-year ongoing $980

Registered agent estimate uses a $100 midpoint. Specialist agents start around $50 per year. Full-service formation companies bundle RA for $125 to $200.

Cost across the first three years

Year 1 $980

Year 2 $910

Year 3 $910

How California compares on the basics

Online filing File through state portal

Yes

Expedited processing $350 for 24h

Yes

Annual report required Separate report on top of tax

Yes

State-imposed annual tax Minimum $800 per year, up to $11,790

$800

Written operating agreement required Statute requires one on file

Required

Newspaper publication requirement Not required in this state

State sales tax 7.25% state rate

7.25%

How to apply for an LLC in California

Pick a compliant LLC name
The name must end in "Limited Liability Company," "LLC," or an approved abbreviation, and must be distinguishable from every other entity on the California Secretary of State record. Check availability at the California entity search.
Designate a registered agent
Every California LLC is required to have a registered agent with a physical street address in California. You can serve as your own agent if you live in California, or hire a commercial service for $99 to $249/yr. See the California registered agent guide.
File Articles of Organization (Form LLC-1)
Filing fee is $70. Online filing is available through the state portal. Mail filings are accepted. Paid expedite is available for $350.
Apply for a federal EIN
Free directly from the IRS in about 15 minutes (see the EIN guide). Required for opening a business bank account, hiring employees, and most formation-service tax workflows.
Adopt an operating agreement
California statutorily requires a written operating agreement. See the operating agreement pillar for the 12 clauses every agreement should include.

Filing walkthrough

You file Form LLC-1 (Articles of Organization) through the bizfile Online portal at bizfileonline.sos.ca.gov. The state fee is $70, the same by mail or online. Online processing usually clears in 8 business days; mail filings take around 21 business days. California offers counter-drop expedited service at $350 for 24-hour turnaround and $750 for same-day, but only for paper filings physically delivered to the Sacramento office. Online filers cannot pay for a faster queue.

Every California LLC needs an agent for service of process with a California street address. You can be your own agent if you live here, or use a commercial agent for the usual $50 to $125 per year. The Articles form is short (name, address, management structure, agent details), and the real compliance burden starts after formation: California treats the operating agreement as statutorily required under RULLCA, the first Statement of Information is due within 90 days of formation, and the first $800 franchise tax payment is due on the 15th day of the 4th month after you form.

Check name availability File online California formation guidance

How California taxes an LLC

California runs two parallel tax regimes on every LLC and you pay both. First, the $800 minimum annual franchise tax (Cal. Rev. & Tax. Code §17941), owed by every LLC regardless of income. Second, the gross-receipts LLC fee (§17942), a tiered surcharge based on California-sourced revenue: $900 at $250,000, $2,500 at $500,000, $6,000 at $1,000,000, and $11,790 once you cross $5,000,000. A large California LLC pays $12,590 total each year, and that is before anyone looks at member-level income tax.

Pass-through is the default, which means members report their share of LLC income on personal California returns subject to the state's graduated personal rates (top marginal 13.3%, or 14.4% on wages above $1M with the mental-health surcharge). An LLC electing C-corp treatment owes California's 8.8% corporate franchise tax in place of the $800, subject to the same minimum floor. Sales and use tax is 7.3% statewide, higher once you add district taxes.

Here is the part that catches home-state filers: a California resident member creates California nexus on any LLC, anywhere. Form your LLC in Nevada, operate it from your kitchen in San Diego, and the FTB still expects the $800. The foreign-LLC trap works in both directions.

Ongoing compliance and costs after year one

Budget $800 per year minimum to the Franchise Tax Board, plus $20 every two years for the Statement of Information, plus $50 to $125 annually for a commercial agent if you are not serving as your own. Add the gross-receipts LLC fee the moment you cross $250,000 in California revenue. A California LLC in its second year with modest revenue is paying the state around $850 per year before anything else.

Foreign LLCs registered to transact business in California owe the same $800 minimum franchise tax. That is the catch. There is no version of 'form in Wyoming to avoid the $800' that survives contact with California's nexus rules once you live and work here. The $70 saved on the original filing fee is not the number that matters.

Common mistakes forming a California LLC

Two patterns repeat. The first is forming a Wyoming or Nevada LLC to 'escape' the California franchise tax, then operating the business from California without registering the out-of-state LLC as a foreign LLC here. The FTB catches this through banking, payroll, and 1099 filings, and back-assesses the $800 for every year the entity had California nexus, plus penalties and interest. The second is forgetting the first-year franchise tax deadline. It is not April 15. For a new LLC, the $800 is due the 15th day of the 4th month after formation, which means an LLC formed in September pays its first $800 in mid-December, not the following April.

State agencies that handle California LLCs

California Secretary of State, Business Programs Division

Website: www.sos.ca.gov/business-programs/business-entities
Phone: (916) 653-6814
Mail: 1500 11th Street, Sacramento, CA 95814
Hours: 8:00 AM to 5:00 PM Pacific, Monday to Friday (excluding state holidays)

California Franchise Tax Board

Website: www.ftb.ca.gov
Phone: (800) 852-5711
Mail: Franchise Tax Board, P.O. Box 942857, Sacramento, CA 94257-0531
Office: 9646 Butterfield Way, Sacramento, CA 95827
Hours: 8:00 AM to 5:00 PM Pacific, Monday to Friday

Frequently Asked Questions

How much does it cost to form an LLC in California in 2026?

The Articles of Organization filing fee is $70, paid once to the Secretary of State. That is the small number. The real cost is the $800 minimum annual franchise tax owed to the Franchise Tax Board starting in the first tax year, plus $20 every two years for the Statement of Information. A first-year California LLC with a commercial registered agent typically spends around $950 in combined state fees.
Does California require LLCs to pay the $800 franchise tax even with no income?

Yes. The $800 minimum annual franchise tax under Cal. Rev. & Tax. Code §17941 applies to every LLC doing business in California, registered to do business in California, or organized in California, regardless of whether the LLC had any revenue. A single-member LLC with zero income and zero activity still owes the full $800 each tax year. Disregarded-entity status for federal purposes does not change the California rule.
Can I avoid the California franchise tax by forming my LLC in Wyoming or Nevada?

Usually no, if you live in California or operate from here. California imposes the $800 franchise tax on any LLC that transacts business in California, which includes a California-resident member running the business from a California address. You would register the Wyoming or Nevada LLC as a foreign LLC in California, pay the same $800, and end up with two filings instead of one. The escape works only when neither you nor your operations touch California.
Does California have an annual report for LLCs?

California calls it a Statement of Information (Form LLC-12), not an annual report, and it is biennial rather than yearly. The fee is $20. The first filing is due within 90 days of formation; every subsequent filing is due by the end of the anniversary month on a two-year cycle. The Statement of Information is separate from the franchise tax return filed with the FTB.
How long does it take to form a California LLC?

Online filings through bizfile Online typically clear in 8 business days. Mail filings take around 21 business days. If you need faster turnaround, California offers counter-drop expedited service at $350 for 24-hour and $750 for same-day, but only for paper filings delivered in person or by courier to the Sacramento office.
Does California require an operating agreement?

California is widely treated as an operating-agreement-required state. Cal. Corp. Code §17701.02(s) defines the operating agreement and the California Revised Uniform LLC Act is written on the assumption that every LLC has one, whether oral, written, or implied. An LLC without a written agreement falls back on statutory defaults for management, voting, and member rights, which is rarely what the members actually want.
What is the California gross-receipts LLC fee and when does it apply?

Under Cal. Rev. & Tax. Code §17942, California imposes a tiered LLC fee on top of the $800 minimum franchise tax once California-sourced income crosses $250,000 in a tax year. The tiers are $900 for $250,000 to $499,999, $2,500 for $500,000 to $999,999, $6,000 for $1,000,000 to $4,999,999, and $11,790 for $5,000,000 and above. Combined with the $800 base, a top-tier LLC pays $12,590 per year to the FTB.
Do California LLCs pay state income tax?

The LLC itself does not pay California personal income tax, but the $800 minimum franchise tax and gross-receipts LLC fee apply regardless of income classification. Members then pay California personal income tax on their share of pass-through income at the state's graduated rates, up to 13.3%. An LLC electing C-corp treatment owes the 8.8% California corporate franchise tax in place of the member-level pass-through.
How do I apply for an LLC in California?

Apply for an LLC in California by filing Articles of Organization (Form LLC-1) with California Secretary of State, Business Programs Division. The filing fee is $70. Online filing is available through the state portal. Approval typically takes 8 business days online. Mail filings take about 21 business days. Before filing, pick a registered agent (see the California registered agent guide) and confirm your business name is available using the state's entity search.

Compare California to another state

Side-by-side breakdowns of fees, taxes, approval time, and compliance. Every other US jurisdiction has a dedicated compare page against California.

A

C

D

I

K

L

California vs Louisiana

M

N

O

P

California vs Pennsylvania

R

California vs Rhode Island

S

T

U

California vs Utah

V

W

Sources

Filing fee: bpd.cdn.sos.ca.gov/llc/forms/llc-1.pdf · verified April 21, 2026
California Secretary of State Form LLC-1 Articles of Organization. Filing fee of $70 is printed on the form instructions. Cal. Gov. Code §12190 and §17702.01 authorize the fee.
Expedited filing: www.sos.ca.gov/business-programs/business-entities/service-options · verified April 21, 2026
California Secretary of State offers preclearance and expedited filing services. Over-the-counter 24-hour expedited service is $350; same-day service is $750; 4-hour service is $500 for paper over-the-counter drop-off. Online bizfile filings are typically processed in a few business days without a separate expedite fee.
Annual report fee: www.sos.ca.gov/business-programs/business-entities/statements · verified April 21, 2026
Statement of Information (Form LLC-12) for LLCs. $20 filing fee. First filing due within 90 days of formation, then biennially by the end of the formation-anniversary month. Cal. Corp. Code §17702.09.
Franchise tax: www.ftb.ca.gov/file/business/types/limited-liability-company/index.htm… · verified April 21, 2026
California Franchise Tax Board LLC guidance. $800 annual minimum franchise tax under Cal. Rev. & Tax. Code §17941, due by the 15th day of the 4th month after the beginning of the tax year. Annual LLC fee under §17942 applies on total California-sourced income: $900/$2,500/$6,000/$11,790 for tiers starting at $250k, $500k, $1M, and $5M respectively.
Franchise tax: leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum… · verified April 21, 2026
Cal. Rev. & Tax. Code §17942 sets the gross-receipts LLC fee tiers. §17941 sets the $800 minimum franchise tax. Confirm current-year tier values on the FTB site before filing.
Operating agreement requirement: leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum… · verified April 21, 2026
Cal. Corp. Code §17701.02(s) defines 'operating agreement' and §17701.10 governs its scope; the California Revised Uniform Limited Liability Company Act (RULLCA) operates on the assumption that every LLC has an operating agreement (oral, written, or implied). Statute does not mandate a written, filed agreement, but the RULLCA regime is premised on one existing; California is widely characterized as an 'operating agreement required' state. Members rely on default statutory rules if no agreement is adopted.
Foreign LLC registration fee: bpd.cdn.sos.ca.gov/llc/forms/llc-5.pdf · verified April 21, 2026
Form LLC-5 Application to Register a Foreign LLC. Filing fee $70. Foreign LLCs are subject to the same $800 annual franchise tax and Statement of Information requirements as domestic LLCs.
Publication requirement: www.sos.ca.gov/business-programs/business-entities/forms · verified April 21, 2026
California does not require newspaper publication for LLC formation. Confirmed via absence of requirement in Cal. Corp. Code §17702.01 and the SoS LLC filing instructions.
Business name search: bizfileonline.sos.ca.gov/search/business · verified April 21, 2026
California bizfile Online business search tool. Confirm name availability before filing Articles of Organization.
Sales tax rate: www.cdtfa.ca.gov/taxes-and-fees/sut-rates-description.htm · verified April 21, 2026
California Department of Tax and Fee Administration: statewide base sales and use tax rate is 7.25% (6.00% state + 1.25% uniform local). Combined rates with district taxes range from 7.25% to over 10.75% in some jurisdictions.
Corporate income tax rate: www.ftb.ca.gov/file/business/types/corporations/index.html · verified April 21, 2026
California corporate franchise tax rate is 8.84% on net income for C-corporations. Applies to LLCs electing C-corp treatment; otherwise LLCs flow through to member personal returns.

Legal Disclaimer: FreeNetLaw provides general legal information, not legal advice. The information on this site is not a substitute for consultation with a licensed attorney. Laws vary by jurisdiction and change frequently. Always verify information with official sources and consult a qualified attorney for advice about your specific situation.