Legal Requirements for Setting up a Limited Liability Company (LLC) in California

To set up a Limited Liability Company (LLC) in California, there are several legal requirements that must be fulfilled. Below are the requirements:

1. Choosing a Name: California LLC Law requires that an LLC must have a unique name, which must not resemble any other existing business name in California. It is important to ensure that the chosen name complies with the California Secretary of State's office naming requirements.
2. Filing the Articles of Organization: California LLC Law requires that the articles of organization be filed with the Secretary of State's office. A filing fee of $70 must be paid at the time of filing.
3. Preparation of Operating Agreement: While it is not mandatory in California to have an operating agreement, it is highly recommended. An operating agreement outlines the rights, duties, and obligations of the members of the LLC.
4. Obtaining an EIN: An employer identification number (EIN) is required for tax purposes. An LLC must obtain an EIN from the Internal Revenue Service (IRS) after the LLC is formed. The EIN is necessary to open bank accounts and to file state and federal taxes.
5. Getting Business Licenses and Permits: An LLC may require business licenses, permits, and registrations depending on the nature of the business and the location where the business will operate. It is important to check with the city, county, and state authorities to obtain the necessary licenses.

In summary, to set up an LLC in California, an applicant must choose a unique name, file articles of organization with the Secretary of State's office, prepare an operating agreement, obtain an EIN from the IRS, and obtain necessary business licenses and permits. It is wise to consult with a licensed attorney who can guide one through the legal formation process and provide appropriate legal advice.