California LLC Cost
California currently waives the cost of filing LLC Articles of Organization, but other fees apply when starting a business in the Sunshine State, including paying for an initial Statement of Information, licenses and more. California LLCs must also pay some of the highest LLC franchise tax rates in the country. In this guide we’ll explain how much you’ll need to pay to start an LLC in California.
What You'll Find In This Article:
- California LLC Formation Filing Fee
- California Statement of Information Fee
- California LLC Franchise Tax and Annual LLC Fee
- California Registered Agent Fee
- California Seller's Permit
- California Professional Licensing Fees
- Local Business License Fees in California
- Optional LLC Fees in California
- Business Insurance Premiums
- Cost to Register a Foreign LLC in California
California LLC Formation Filing Fee: $0
The Secretary of State is giving new owners of California LLCs a break by waiving the standard $70 fee to file California Articles of Organization with the Secretary of State. This waiver lasts until June 30th, 2023.
Filing your articles officially creates your LLC. You can file online, by mail, or in person. If you want your Articles of Organization processed fast, the state offers expedited processing options: 24-hour Expedite for $350, and Same Day Expedite for $750.
California Statement of Information Fee: $20
All new LLCs in California need to file an initial Statement of Information within 90 days, which costs $20. After this, you’ll need to file a new Periodic Statement of Information every two years, which is due at the end of your LLC’s anniversary month. For example, if you form your LLC on February 8, 2023, your first biennial Statement of Information will be due on February 28, 2025.
LLCs that are late in filing their Statements of Information will be charged a $250 late fee.
Learn more about filing your California Statement of Information.
California LLC Franchise Tax and Annual LLC Fee
California levels an annual franchise tax on most businesses in the state. Normally, LLCs with default tax status are charged a $800 a year—and LLCs with S-Corp or C-Corp status must pay an additional percentage of tax on net income, 1.5% and 8.84%, respectively.
A newly-formed LLC benefits from a recent change, as LLCs formed between 2021 and the end of 2023 are exempt from franchise tax during their first taxable year of business. Either way, while you may not have to pay these taxes immediately, franchise tax is a cost you’ll want to prepare for.
Additionally, If your LLC makes more than $250,000 a year, you will also need to pay California’s Annual LLC fee—a flat fee of either $900, $2,500, $6,000, or $11,790, depending on your income.
Learn more about California Franchise Tax and Annual LLC Fee.
California Registered Agent Fee
Your LLC is required to name a California registered agent in its Articles of Organization. Your registered agent is the person (or company) designated to accept legal notices on behalf of your business.
You can be your own registered agent or name a friend, family member, employee or business partner as your agent—but hiring a professional registered agent service helps you maintain your privacy and ensures that you won’t miss a legal notice while away from the office. The rates for registered agent services vary by agency, but Northwest’s fee for registered agent service is $125 per year, and our price never goes up.
California Seller's Permit
California doesn’t require a statewide business license, but most businesses do need a state-issued seller’s permit to charge sales tax on goods and services. Unregistered sellers can be fined for unpaid sales and use tax, plus penalties and interest.
You can register for a seller’s permit with the California Department of Tax and Fee Administration for free. The permit does not need to be renewed unless your LLC has stopped doing business in the state.
Learn how to get a California Seller’s Permit.
California Professional Licensing Fees
Professions that need specialized training—such as engineers, lawyers, and medical professionals, among others—must obtain a license from the California board regulating that industry. The fees for professional licenses vary by industry. For example, the application fee for a Certified Public Accountant is $250—plus an additional license fee of $280 and a $49 fingerprint processing fee. Meanwhile, a Pest Control Applicator must pay $10 for the license application and $55 to take an examination application.
You can check out the California Professional Licensure Guide for more on getting licensed in your profession.
Local Business License Fees in California
Most counties and cities in California require a local business license or business tax certificate from LLCs in their jurisdiction. Fees vary by location. For example, the El Segundo general business license has a base fee of $109.50 for LLCs with 10 or fewer employees, while San Francisco’s business registration starts at $44 for businesses making under $100,000 and can scale as high as $41,951 for extremely lucrative businesses.
Learn how to get a local California Business License.
Optional LLC Fees in California
We’ve covered the basic, most essential expenses of starting an LLC in California, but here are some other expenses that might be necessary for your business.
If you want to lock down your LLC name before filing your Articles of Organization, you can file a Name Reservation Request with the California Secretary of State for $10. Filing a name reservation in person will cost you an extra $10 for a special handling fee, but it doesn’t apply for mailed or online filings.
Your reservation gives you exclusive rights to that name for 60 days. It can be renewed for the same fee, but you must allow at least one day between reservations.
DBA (Doing Business as) Name
If you want to do business under a name other than your LLC’s legal name, you’ll need a DBA, known as a Fictitious Name in California. DBA registration is done by county clerks in California, and fees vary by county.
California also has a publication requirement when you obtain a fictitious name for your LLC. You have 30 days to publish notice of the name in the county newspaper where your LLC is registered. As such, you’ll need to pay the paper’s rate for such business announcements on top of your county clerk’s fee.
Certified Copies of Business Documents
As your business grows, at some point you might need to order a certified copy of your business documents from the Secretary of State Business Programs Division. Certified copies in California cost $5 per document.
If you register to do business in a new state, that state’s government may require a certified copy of your Articles of Organization. Some LLC owners also choose to keep certified copies of business documents on record internally, as a safety precaution.
Find out how to get a certified copy of your California Articles of Organization.
California Certificate of Status
If you ever need to prove to a bank, investor, or foreign jurisdiction that your LLC is up-to-date on its taxes and state reports, you’ll need a Certificate of Status (also called a Certificate of Good Standing or Certificate of Existence).
The fee for a Certificate of Status in California is $5, $15 for expedited in-person service. You can request a Certificate of Status from the California Division of Corporations online, in person or by mail.
Here’s how to get a California Certificate of Status.
Business Insurance Premiums
If your business is at risk of lawsuits or owns expensive property, you’re probably going to need some kind of business insurance. Business insurance ranges from $50 a month to several thousand dollars a month, depending on the size and needs of your LLC.
If your business has one or more employees, you must purchase workers’ compensation insurance. You’ll need to obtain this insurance through a private company or the California state fund. The price for this insurance varies, so spend the time to research what works best for your business. Rates can also vary widely based on your industry. For example, an average workers’ comp rate for a roofing company is around $18 per $100 of covered payroll, whereas the average rate for a brewery is only around $1.50 per $100 of payroll.
Learn more about LLC Business Insurance.
How much does it cost to register a foreign LLC in California?
If your LLC was formed outside California, but you want to do business inside the state, you’ll need to register as a California foreign LLC. Registering a foreign LLC in California is currently free, just like a domestic LLC. To do business as a foreign LLC, otherwise known as foreign qualification, you’ll need to apply for an Application to Register a Foreign Limited Liability Company with the California Secretary of State.
You will also need a California business license, and you may need one or more professional or local licenses as well.