California LLC Cost: Filing Fee, Franchise Tax, and Annual Fees

Starting a limited liability company in California costs $70 to file the paperwork, and the main California LLC cost after that is the $800 annual franchise tax every LLC owes the Franchise Tax Board, whether it earns anything or not. Add a $20 Statement of Information and you have the mandatory baseline. Most new LLCs spend somewhere between $900 and $1,500 in the first year once optional items like a registered agent service or a local business license are included, and at least $820 every year after.

The $70 Filing Fee

You create a California LLC by filing Articles of Organization (Form LLC-1) with the Secretary of State. The fee is $70. As of 2026 the filing goes through the Secretary of State’s bizfile portal online; there is no paper-mail option for this form.

If you need the state to move faster, in-person expedited service is available at the Sacramento office for an additional, nonrefundable fee on top of the $70:

24-hour processing: $350
Same-day processing: $750, with documents submitted by 9:30 a.m.
4-hour processing: $500, which requires prior preclearance approval

The expedited fee is charged even if the filing is rejected.¹²

The $800 Annual Franchise Tax

This is the cost that surprises people. Every LLC organized in California or doing business in the state owes an $800 franchise tax to the Franchise Tax Board every year, regardless of revenue. The tax keeps accruing until the LLC is formally cancelled with the state.³

In the first year, the $800 is due by the 15th day of the fourth month after formation. An LLC formed on March 1 would owe its first payment by July 15. In later years, calendar-year filers pay by April 15. Payment is made on Form FTB 3522.⁴

A temporary waiver of the first-year tax under Assembly Bill 85 applied only to tax years from 2021 through 2023 and has expired. LLCs formed in 2024 or later owe the full $800 in year one.³

One narrow exception survives. An LLC that files a Short Form Cancellation (Form LLC-4/8) within 12 months of organizing, conducted no business, held no assets, and had no debts is not subject to the first-year tax.⁴

The Income-Based LLC Fee

On top of the $800, California charges an additional fee once California-source “total income” crosses $250,000. Total income here means gross income plus the cost of goods sold, which is broader than net profit. The brackets are:

$250,000 to $499,999: $900
$500,000 to $999,999: $2,500
$1,000,000 to $4,999,999: $6,000
$5,000,000 or more: $11,790

LLCs estimate this fee and pay it by the 15th day of the sixth month of the tax year (June 15 for calendar-year filers) using Form FTB 3536. Underestimating triggers a 10 percent penalty on the underpaid amount, but paying at least as much as the prior year’s full fee is a safe harbor.⁴ If your California revenue stays under $250,000, this fee does not apply.

Statement of Information: $20

Every California LLC must file a Statement of Information (Form LLC-12) with the Secretary of State. The fee is $20.¹ The first one is due within 90 days of formation, and after that the statement is refiled every two years during a six-month window tied to the LLC’s formation month.⁵

Missing the deadline is expensive relative to the filing itself: the Franchise Tax Board can impose a $250 penalty, and continued noncompliance can lead to suspension or forfeiture of the LLC’s powers in the state.³

Registered Agent: Free or $100 to $300

California requires every LLC to designate an Agent for Service of Process, a person or entity with a physical California street address who is available during business hours to accept legal documents.⁶ You can serve as your own agent, or name someone else, at no cost. Commercial registered agent services generally charge $100 to $300 per year.⁷ Owners who do not want a home address appearing in public records often pay for a service for that reason alone.

EIN and Operating Agreement

A federal Employer Identification Number from the IRS is free. You apply online and the number is issued immediately; the IRS warns against third-party sites that charge for this. The LLC has to be formed with the state first.⁸⁹

California also requires LLCs to have an operating agreement among the members, but it is not filed with the state and carries no filing fee.⁶ A single-member LLC can draft one from a template at essentially no cost. An attorney-prepared agreement typically runs from several hundred to a few thousand dollars.

Optional and Situational Costs

Name Reservation

If you want to hold a name before filing your Articles of Organization, you can reserve it for 60 days. The fee is $10 by mail or $20 for in-person drop-off, and consecutive reservations are not allowed; at least one day must pass between windows.¹⁰

Fictitious Business Name (DBA)

If your LLC will operate under a name different from its registered name, you file a fictitious business name statement with the county clerk where the business is based. County filing fees generally run from about $26 to $100.¹¹¹² You then have to publish the DBA in an adjudicated newspaper of general circulation once a week for four consecutive weeks, starting within 30 days of filing, and file the affidavit of publication with the county clerk within 30 days after the last publication. Publication costs vary by newspaper.

Seller’s Permit

An LLC that sells or leases tangible personal property subject to California sales tax needs a seller’s permit from the California Department of Tax and Fee Administration. The permit is free, though the CDTFA may require a security deposit against future tax liabilities. The seller’s permit does not replace a local business license.¹³

Local Business Licenses

Most California cities and counties require a local business license or tax certificate. Basic city licenses typically cost $25 to $400 per year, with industry-specific permits often higher. Many jurisdictions calculate the fee from gross receipts or employee count rather than charging a flat rate. California’s CalGold Permit Assistance Tool can identify what applies to a given location and business type.

Amending the Articles

Changing information in the Articles of Organization, such as the LLC’s name or management structure, requires filing an Amendment (Form LLC-2) for $30.¹⁴

What It Costs if You Fall Behind

Late payment of the $800 franchise tax carries a 5 percent penalty on the unpaid amount plus 0.5 percent for each month unpaid, capped at 25 percent, with interest accruing from the original due date. Filing Form 568, the LLC’s annual return, late draws its own 5 percent per month penalty on tax or fee due, also capped at 25 percent.¹⁵

If an LLC falls far enough behind, the Franchise Tax Board or Secretary of State can suspend it, which strips its legal power to conduct business in California. Reviving a suspended LLC requires filing all past-due returns, paying every outstanding tax, fee, penalty, and interest charge, and submitting an Application for Certificate of Revivor (Form FTB 3557 LLC). The back $800 taxes alone accumulate for every year since registration, operating or not. A suspension caused by a missing Statement of Information can add a $250 penalty on top.¹⁶

Closing the LLC

When you are done, you file a Certificate of Cancellation (Form LLC-4/7) with the Secretary of State. There is no filing fee for the form itself.¹⁷ The LLC still has to file a final return with the Franchise Tax Board and pay any outstanding taxes, fees, and penalties before the state treats it as fully closed.³ A certified copy of the cancellation costs an additional $5. Until that final step, the $800 franchise tax keeps running.

Quick Reference

Articles of Organization (Form LLC-1): $70, one-time
Statement of Information (Form LLC-12): $20, initial then every two years
Annual franchise tax: $800, every year
Income-based LLC fee: $900 to $11,790, only if California income exceeds $250,000
Registered agent: free if self-designated, $100 to $300 per year commercially
EIN: free from the IRS
Name reservation: $10 by mail, $20 in person (optional)
Amendment (Form LLC-2): $30 as needed
Certificate of Cancellation: no fee
Local business licenses: varies, commonly $25 to $400 per year

1
California Secretary of State. Business Entities Fee Schedule
2
California Secretary of State. Preclearance and Expedited Filing Services
3
California Franchise Tax Board. Limited Liability Company
4
California Franchise Tax Board. Limited Liability Company Filing Information
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California Secretary of State. Statements of Information
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California Secretary of State. Types of Business Entities
7
Forbes. Best California Registered Agent Services
8
Internal Revenue Service. Get an Employer Identification Number
9
Internal Revenue Service. Employer Identification Number
10
California Secretary of State. Name Reservation Request Form
11
California Office of the Small Business Advocate. Set Up Your Business in California
12
Santa Monica Daily Press. Publish Fictitious Business Name
13
California Department of Tax and Fee Administration. Seller’s Permit FAQ
14
California Secretary of State. Certificate of Amendment – LLC (Form LLC-2)
15
California Franchise Tax Board. Penalty Reference Chart
16
California Franchise Tax Board. My Business Is Suspended
17
California Secretary of State. Certificate of Cancellation (Form LLC-4/7)