Skip to content
Ask a question
All posts

What steps do I need to take to form a limited liability company (LLC) in California?

Picture of Chris Battis By   ·  1 minute read

To form a Limited Liability Company (LLC) in California, the following steps need to be taken:

  1. Choose a Name: The first step is to choose a name for your LLC. The name must include the words “Limited Liability Company” or the abbreviation “LLC”. The name should not be too similar to other business names registered with the California Secretary of State.

  2. File Articles of Organization: File Articles of Organization with the California Secretary of State. This document will officially create your LLC. You will need to provide information such as the name of the LLC, its purpose, the registered agent’s name and contact information, and the name and address of the LLC’s members.

  3. Draft an Operating Agreement: Although not required by California law, it is recommended that you draft an operating agreement. This document outlines the management and operation of the LLC, including the roles and responsibilities of its members.

  4. Obtain Business Licenses & Permits: Depending on the type of business you operate, you may need to obtain business licenses and/or permits. Check with the city or county where your business is located to determine what is required.

  5. Obtain an Employer Identification Number (EIN): An EIN is required if the LLC has employees or if it is taxed as a corporation. You can obtain an EIN from the Internal Revenue Service (IRS) by completing Form SS-4.

  6. File Annual Reports: All LLCs must file an annual report with the California Secretary of State. This report is due by the end of the LLC’s anniversary month each year.

  7. Comply with Tax Obligations: LLCs in California are subject to state and federal income taxes. You may also be responsible for sales tax and employment taxes. Consult with a tax professional for guidance on your specific tax obligations.

It is important to note that forming an LLC does not provide complete protection from personal liability. In certain circumstances, LLC members may still be held personally liable for the LLC’s debts or actions. It may be beneficial to consult with an attorney to determine what additional steps you can take to protect your personal assets.