LLC in California: Formation, Taxes & Compliance
Forming an LLC in California involves more than registering with the Secretary of State. Business owners must also understand tax classifications, annual filing obligations, California LLC taxes and fees, and ongoing compliance requirements.
What is a Limited Liability Company (LLC)?
An LLC combines partnership flexibility with corporate liability protection — members aren’t personally liable for most business debts.
Single-Member LLC (1 owner, disregarded entity) vs. Multi-Member LLC (2+ owners, partnership taxation). Both offer strong protection.
LLC Tax Classifications
- Single-Member LLC → Disregarded entity (reported on owner’s personal return).
- Multi-Member LLC → Partnership (files Form 1065 federally; CA Form 568).
- LLC electing Corporation → C corp or S corp taxation.
California requires the same classification as federal.
How to Form an LLC in California
File Articles of Organization with the California Secretary of State through bizfile Online. The state filing fee is $70.
Designate an agent for service of process and provide the required business and management information.
Obtain an Employer Identification Number (EIN) from the IRS if required for federal taxes, payroll, banking, or other business purposes.
Prepare an operating agreement describing the LLC’s ownership and management arrangements.
File the initial Statement of Information within 90 days after registration. The filing fee is $20. Afterward, an LLC generally files another Statement of Information every two years.
Beginning August 1, 2026, users must establish access to the entity before submitting online filings through bizfile Online.
California LLC Taxes and Fees
Annual Tax: $800 minimum franchise tax — due every year, even if inactive, until canceled.
- Due: 15th day of the 4th month after tax year starts (e.g., April 15 for calendar year).
- First year: No general exemption (temporary one ended after 2023).
- Pay with FTB 3522 (LLC Tax Voucher).
Additional LLC Fee (if CA income ≥ $250,000):
| Total California Income (Rounded) | Fee Amount |
|---|---|
|
$250,000 – $499,999 |
$900 |
|
$500,000 – $999,999 |
$2,500 |
|
$1,000,000 – $4,999,999 |
$6,000 |
|
$5,000,000+ |
$11,790 |
Estimate/pay by 15th day of 6th month with FTB 3536.
Underpayment → penalties + interest.
Filing Requirements
If doing business in CA or registered with SOS:
- Pay $800 annual tax (FTB 3522).
- Pay LLC fee if applicable (FTB 3536).
- File Form 568 (Limited Liability Company Return of Income) — even single-member LLCs must file.
Use Schedule R for apportionment if income is sourced inside/outside CA.
Full details: FTB Limited Liability Company page
Keeping Your LLC Active and in Good Standing
To keep a California LLC active and in good standing:
File the initial Statement of Information within 90 days and then every two years.
File Form 568 and pay the $800 annual tax and any applicable LLC fee.
Keep the LLC’s business addresses, management information, and agent for service of process current.
File an updated Statement of Information when required information changes.
Failure to file the required Statement of Information may result in a $250 penalty and possible suspension or forfeiture of the LLC.
Canceling Your LLC
- File final Form 568 (check “Final Return”).
- File cancellation with SOS (if registered).
- Stop all California business activity.
May still have CA-source income from sales/services/intangibles in the state.
Pro Tip: Consult a tax professional for your specific setup — rules can vary by year and situation. This is general info based on current FTB guidelines (as of 2026).
Last reviewed: September 2026. This guide provides general educational information and is not a substitute for legal or tax advice regarding your specific circumstances.
Need Help Forming a California LLC?
SacTaxPro can help organize your California LLC formation, EIN application, accounting setup, tax registrations, and ongoing filing requirements.