subject: Creating A California Llc [print this page] For a little over a decade creating a California LLC has been a popular choice among new business owners in the state. The LLC or limited liability company is simply a type of company that gives its owners "limited liability". All this means is that if the company is sued or has any debts, it must be paid by the company itself - owners are not liable to provide money from their personal assets. Though a corporation can also provide this kind of legal and financial protection, an LLC is cheaper and easier to set up, hence its popularity.
Setting up an LLC in California starts with filing your Articles of Organization. This is a set of documents that records the details of your LLC. It should include the name of your LLC, as well as a description of the business and its purpose. You should also indicate the managers of the LLC, especially if you have more than one member. You also need to assign an Agent for Service of Process. This agent will be the one who will receive the service of process in case the LLC is sued. The agent can be an individual or another company - as long as they are located in California.
These documents are all part of your Articles of Organization, This will usually be filed in the Secretary of State Office in Sacramento, since the other offices mainly accept filings for corporations rather than LLCs. The fee for filing is $70, but there will be additional charges if you opt for expedited filing.
Once you've filed your Articles of Organization, your LLC legally exists, but your work isn't finished yet. Within 90 days of filing this, you also have to file a statement of information. This statement includes basic contact and background information of the members or owners of the LLC. There is a specific form for this, as well as an attached filing fee. Don't worry if your LLC only has one member or owner - California law explicitly allows LLCs to be owned by a single person only.
Afterwards, you need to pay $800 to the California Franchise Tax Board. This is a fee that you will have to pay annually for a California LLC, but there will also be additional tax fees based on the income of your business. Since you're just filing your LLC for now, you will only have to pay the $800.
Once you've filed your Articles of Organization, your LLC legally exists, but your work isn't finished yet. Within 90 days of filing this, you also have to file a statement of information. This statement includes basic contact and background information of the members or owners of the LLC. There is a specific form for this, as well as an attached filing fee.
Also, filing the above paperwork is only the first step in creating a California LLC. You still need to file an Operating Agreement and settled your taxes with the California Franchise Tax Board. For now, though, at the very least your LLC is already registered and legally able to conduct business.
