Forming an LLC in California costs at least $890 in state fees during your first year: $70 to file the Articles of Organization, $20 for the initial Statement of Information, and $800 for the annual franchise tax. Everything beyond that depends on how much your LLC earns, whether you hire help, and what your city requires.
What You Pay the State in Year One
Three state fees are unavoidable.
The $70 filing fee goes to the Secretary of State when you submit Form LLC-1, the Articles of Organization.1California Secretary of State. Business Entities Fee Schedule You can file online through bizfileOnline or by mail. Your LLC exists the moment the filing is accepted.2California Legislative Information. California Corporations Code 17702.01
The $20 Statement of Information is due within 90 days of formation.3California Legislative Information. California Corporations Code 17702.09 It reports your principal office address and the names of your managers or managing members. After the first one, you refile every two years during a six-month window tied to your formation month. Miss the deadline and the Secretary of State can suspend your LLC. Set a calendar reminder.
The $800 annual franchise tax goes to the Franchise Tax Board, and every California LLC owes it whether or not the business makes any money.4California Franchise Tax Board. Limited Liability Company A dormant LLC with zero revenue still owes it as long as it stays on the Secretary of State’s records.5California Legislative Information. California Revenue and Taxation Code 17941 Your first payment is due by the 15th day of the fourth month after formation. File on January 10 and your first $800 is due by May 15. Payments after year one are due April 15.
The temporary first-year waiver that applied to LLCs formed between 2021 and 2023 expired on January 1, 2024. LLCs formed in 2026 owe the full $800 in their first year.
The Extra Fee if You Earn More Than $250,000
On top of the $800 franchise tax, LLCs with $250,000 or more in California-source income pay an additional annual fee on a sliding scale:6California Legislative Information. California Revenue and Taxation Code 17942
- $250,000 to $499,999: $900
- $500,000 to $999,999: $2,500
- $1 million to $4,999,999: $6,000
- $5 million or more: $11,790
This fee is calculated on gross income from California sources, not profit. A business that grosses $600,000 and nets almost nothing still owes $2,500. Plan for it based on revenue, not take-home.
Things That Are Free (Don’t Pay for Them)
An Employer Identification Number is free from the IRS. The online application takes about ten minutes and issues your EIN immediately. The IRS specifically warns against third-party sites that charge for it.7Internal Revenue Service. Get an Employer Identification Number
Beneficial Ownership Information reporting under the Corporate Transparency Act is not currently required for domestic LLCs. As of March 2025, FinCEN exempted all domestically formed entities and is not enforcing penalties against U.S. citizens or domestic companies.8FinCEN. Beneficial Ownership Information Reporting If a service tries to charge you to file a BOI report for a California LLC, you can skip it. The rules could change, so check fincen.gov before you assume nothing has shifted.
Optional Costs
Registered Agent
California requires every LLC to name an agent for service of process with a physical street address in the state.2California Legislative Information. California Corporations Code 17702.01 You can list yourself at your own address for free. Commercial services run roughly $49 to $300 per year and are worth considering if you want your home address off the public record or need someone reliably available during business hours.
Name Reservation
You can reserve a name with the Secretary of State for $10, which holds it for 60 days.9California Secretary of State. Name Reservation Request Form You can list up to three names in order of preference. This is optional; you can also check availability and file your Articles the same day.
Attorneys and Accountants
California attorneys who handle LLC formations typically charge $800 to $2,500, which usually covers a custom operating agreement, advice on tax elections like S-corp status, and the filing itself. A single-member LLC with simple finances usually doesn’t need legal help to file, but a carefully drafted operating agreement is worth paying for if you have multiple members or complicated profit-sharing.
Small-business accountants generally charge $300 to $900 a year for ongoing tax prep and bookkeeping. Accounting software may be enough in the early days.
What You’ll Pay Every Year After That
Recurring state costs settle into a predictable pattern: the $800 franchise tax every year, the $20 Statement of Information every two years, the income-based LLC fee if your California revenue clears $250,000, and your registered agent service if you use one.
Most California cities and counties also require a local business license. Fees vary widely by location and industry. Some cities charge a flat annual amount; others calculate it from gross receipts. Expect anywhere from $50 to several hundred dollars a year, and check with your city clerk before you start doing business, since operating without the right local permits can bring fines.
Business insurance isn’t legally required for every LLC, but general liability coverage is standard. California premiums tend to run above the national average, and your actual cost will depend on your industry and headcount.