Forming and maintaining a California LLC costs at least $870 in the first year. California LLC fees break down into a one-time $70 filing fee paid to the Secretary of State and an $800 annual franchise tax paid to the Franchise Tax Board every year the LLC exists. LLCs with $250,000 or more in California-source income owe an additional tiered fee that climbs to $11,790. A $20 Statement of Information filing, penalties for late payment, and the cost of closing an LLC round out what owners actually spend.
Formation Filing Fee
A domestic California LLC is created by filing Articles of Organization (Form LLC-1) with the Secretary of State. The filing fee is $70, paid once.1California Secretary of State. Business Entities Fee Schedule The articles must include the LLC’s name, principal office address, the initial agent for service of process, and whether the LLC will be manager-managed or member-managed.
Standard processing takes several weeks. If you need the filing done faster, two expedited tiers are available on top of the $70 fee:2Legal Information Institute. Cal Code Regs Tit 2, 21905 – Expedited Filing of Documents
- 24-hour service: $350, processed within one business day of receipt.
- Same-day service: $750, processed by 4:00 p.m. the day the document is received, as long as it arrives by 9:30 a.m.
Most owners don’t need expedited processing. The option exists for contract deadlines or launch dates.
The $800 Annual Franchise Tax
Every LLC organized in California or doing business in the state owes an $800 franchise tax to the Franchise Tax Board each year, regardless of revenue or activity.3Franchise Tax Board. Limited Liability Company The tax keeps accruing until the LLC is formally canceled with the Secretary of State. An inactive LLC does not quietly disappear.
For the first tax year, the $800 is due by the 15th day of the fourth month after you file your Articles of Organization. For an LLC formed on June 18, that first payment would be due October 15. In later years, the $800 is due by the 15th day of the fourth month of the taxable year, which lands on April 15 for calendar-year LLCs.3Franchise Tax Board. Limited Liability Company Payment is made with Form FTB 3522 (LLC Tax Voucher) or electronically through FTB Web Pay.
The brief 2021–2023 waiver of the first-year tax has expired. LLCs formed in 2024 or later owe the full $800 in year one. One narrow out remains: if you cancel the LLC within 12 months of forming it by filing a short-form cancellation (Form LLC-4/8), you won’t owe the $800 for that first tax year.3Franchise Tax Board. Limited Liability Company
Income-Based LLC Fee
LLCs with total California-source income of $250,000 or more owe a second annual fee on top of the $800. It’s a flat amount set by tier, not a percentage:4California Legislative Information. California Revenue and Taxation Code 17942
- $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
Because the fee jumps at each threshold, an LLC with $499,000 in income pays $900 while one at $500,000 pays $2,500. Revenue near a tier boundary deserves attention.
How “Total Income” Is Calculated
“Total income” here is not taxable income or net profit. It means gross income as defined under California tax law, plus cost of goods sold. Adding cost of goods sold back makes the number larger than many owners expect. Revenue and Taxation Code Section 17942 excludes income that has already been subject to this fee when it flows from one LLC to another, so the same dollars aren’t counted twice in tiered LLC structures.4California Legislative Information. California Revenue and Taxation Code 17942
Estimated Payment and the 10% Penalty
The income-based fee isn’t paid with your annual return. You estimate it during the current year and pay by the 15th day of the sixth month, which is June 15 for calendar-year LLCs. The FTB provides Form 3536 for this payment.5Franchise Tax Board. 2025 FTB 3536 Estimated Fee for LLCs
If the estimate falls short, the FTB adds a penalty of 10% of the underpayment. There is a safe harbor: no penalty applies if the estimated payment equals or exceeds the total fee owed for the prior tax year.4California Legislative Information. California Revenue and Taxation Code 17942 When revenue is unpredictable, paying last year’s fee amount by June 15 is the simplest way to stay safe.
Form 568 Annual Return
California LLCs classified as partnerships file Form 568 (Limited Liability Company Return of Income) with the FTB each year, due by the 15th day of the third month after the close of the taxable year — March 15 for calendar-year filers.6Franchise Tax Board. 2025 Instructions for Form 568 Limited Liability Company Tax Booklet This is where the $800 tax, the income-based fee, and the LLC’s income figures are reported. An LLC organized or registered in California must file even if it had no activity or income.
Statement of Information
Every California LLC, domestic or foreign, files a Statement of Information (Form LLC-12) with the Secretary of State. The fee is $20.1California Secretary of State. Business Entities Fee Schedule The initial filing is due within 90 days of formation or registration. After that, LLCs file every two years inside a six-month filing window assigned by the Secretary of State.7California Secretary of State. Statements of Information Filing Tips
The statement updates the public record with the agent for service of process, principal office address, and managers or members. Missing the deadline triggers a $250 penalty.8Franchise Tax Board. Limited Liability Company Collections Information Filing online through the Secretary of State’s bizfile system takes a few minutes.
Out-of-State LLCs Doing Business in California
An LLC formed in another state that conducts ongoing business in California must register as a foreign LLC using Form LLC-5. The filing fee is $70, and you must include a certificate of good standing from the home state issued within the preceding six months.9California Secretary of State. LLC-5 Application to Register a Foreign Limited Liability Company
A registered foreign LLC owes the same ongoing costs as a domestic one: the $800 franchise tax, the income-based fee on California-source income under the same tiers, and the biennial Statement of Information.3Franchise Tax Board. Limited Liability Company Forming in Nevada or Wyoming and then operating in California does not reduce California’s tax burden; it adds the cost of maintaining the LLC in two states.
Agent and Document Costs
Every California LLC must designate an agent for service of process. You can name yourself or any individual with a California street address at no cost. Many owners pay a commercial registered agent service instead; typical annual rates run $100 to $300, with budget options starting around $50 and premium multi-state packages above $500.
Certified copies of filed documents cost $5 for the certification, $1 for the first page, and $0.50 per additional page. In-person requests at the Secretary of State’s office add a $10 special handling fee.1California Secretary of State. Business Entities Fee Schedule
Penalties, Suspension, and Cancellation
Missing deadlines in California gets expensive fast, and the consequences reach past the dollar amounts.
Late Payment Penalties
If the $800 annual tax isn’t paid by its due date, the FTB imposes a penalty starting at 5% of the unpaid amount, plus 0.5% for each additional month the balance is late. The penalty caps at 25% of the unpaid tax, and interest accrues on top.10Franchise Tax Board. FTB Pub 1024 Penalty Reference Chart The 10% underpayment penalty applies separately to a short estimated payment of the income-based fee.4California Legislative Information. California Revenue and Taxation Code 17942
Suspension
When taxes and filings stay delinquent long enough, the FTB suspends the LLC. A suspended LLC cannot legally do business in California, cannot bring an action in court, and cannot defend itself if sued. That courtroom disability is the sharpest edge: if a customer owes you money, you can’t collect; if someone sues the LLC, you can’t respond. The Secretary of State may add its own $250 penalty on a suspended LLC.11Franchise Tax Board. My Business Is Suspended
Reviving a suspended LLC means paying all back taxes and penalties, filing every delinquent return, and submitting an Application for Certificate of Revivor. An LLC suspended for several years owes at least $800 for each year of suspension before penalties and interest are added.
Administrative Cancellation
If an LLC stays suspended for 60 or more consecutive months, the FTB can permanently cancel it. The FTB sends a notice, and if the LLC does not object within 60 days, cancellation becomes final. Even with an objection, the LLC gets only 90 days to clear all outstanding obligations. Once the administrative cancellation goes through, there are no appeal rights.12Franchise Tax Board. Administrative Dissolution/Cancellation
Cost of Closing the LLC
The Secretary of State charges no filing fee for a Certificate of Cancellation or a short-form cancellation.13California Secretary of State. Limited Liability Companies (LLC) – California The real expense is settling with the FTB first. You must file every delinquent return, pay all outstanding taxes, fees, penalties, and interest, and file a final-year return before the cancellation paperwork will be accepted.14Franchise Tax Board. Guide to Dissolve, Surrender, or Cancel a California Business Entity
If the FTB has already suspended the LLC, the Secretary of State will reject the cancellation documents until the entity is revived. Each year an inactive LLC sits unclosed adds at least another $800 to the eventual bill.