To form a single-member LLC in California, you file Articles of Organization (Form LLC-1) with the Secretary of State for a $70 fee, file a Statement of Information (Form LLC-12) within 90 days for $20, appoint a registered agent with a California street address, and begin paying the $800 annual franchise tax to the Franchise Tax Board. The formation itself is a short filing. The ongoing obligations are what deserve your attention before you start.
Check First That You’re Allowed to Use an LLC
California prohibits LLCs from providing professional services that require a state-issued license, certification, or registration. Doctors, lawyers, accountants, architects, and engineers, among others, cannot operate through an LLC in California and must instead form a professional corporation under the Moscone-Knox Professional Corporation Act. If you formed an LLC for your licensed practice in another state, that structure will not work here.
Pick a Name the Secretary of State Will Accept
Your LLC name must include “Limited Liability Company” or an accepted abbreviation such as LLC, L.L.C., or Ltd. Liability Co.1California Legislative Information. California Code CORP 17701.08 It cannot include words like “bank,” “trust,” “incorporated,” “corporation,” “insurer,” or “insurance company.” The Secretary of State also has to be able to distinguish your name from every other LLC, corporation, and reserved name on file, so search the Secretary of State’s online business database before you commit. A rejected filing wastes time and the filing fee.
If you plan to operate under a different name from the one you register, file a fictitious business name statement (a DBA) with the county clerk where your principal office sits. County fees typically run between $26 and $40.
Appoint a Registered Agent
Every California LLC must maintain an agent for service of process at all times.2California Legislative Information. California Corporations Code 17701.13 The agent receives lawsuits, subpoenas, and official state notices for your business. It must be either a California resident with a physical street address in the state or a registered corporate agent authorized to do business here. You can act as your own agent if you have a permanent California address, but that address becomes public record.
File the Articles of Organization
The Articles of Organization (Form LLC-1) is the document that officially creates your LLC. The fastest route is the California bizfile Online portal at bizfileOnline.sos.ca.gov; you can also submit by mail or in person at the Secretary of State’s office.3California Secretary of State. Starting a Business – Entity Types The filing fee is $70. Once accepted, you receive a file-stamped copy confirming the LLC exists.
The form asks for your LLC name, the registered agent’s name and address, your principal business address, and whether the LLC will be member-managed or manager-managed. For a single-member LLC that you run yourself, member-managed is the straightforward choice. Manager-managed makes more sense when someone other than the owner handles operations.
File the Statement of Information Within 90 Days
Within 90 days of forming your LLC, you must file a Statement of Information (Form LLC-12).4California Legislative Information. California Corporations Code 17702.09 It costs $20 and gives the state your current business address, agent information, member or manager names, and the general type of business you conduct. After the initial filing, you refile every two years during your applicable filing period.
Missing this deadline triggers a $250 penalty. Continued noncompliance can lead the Franchise Tax Board to suspend or forfeit your LLC. A suspended LLC cannot legally conduct business, sell property, defend itself in court, or even close itself down until the suspension is resolved. The biennial filing is one of the easiest obligations to forget and one of the most disruptive to miss.
Write an Operating Agreement Even Though You’re the Only Member
California law gives operating agreements broad authority over how an LLC functions, including the relationships between members and the company, management rights, and business activities.5California Legislative Information. California Corporations Code CORP 17701.10 Without a written agreement, the state’s default rules fill in the gaps.
For a single-member LLC, the agreement does something more important than setting internal rules: it proves to a court that you treated the business as a separate entity. If someone sues your LLC and argues that you and the business are really the same thing (a legal theory called “piercing the veil”), a well-drafted operating agreement is evidence that you maintained the separation. Without one, a court is more likely to conclude the LLC was a formality and hold you personally liable. The agreement should cover how profits are distributed, how decisions get documented, what happens if you become incapacitated, and the process for dissolving the business.
Get an EIN and Any Local Licenses
Apply to the IRS for an Employer Identification Number for your LLC.6Internal Revenue Service. Employer Identification Number The application is free, the online form issues the number immediately, and banks will require it to open a business account. Using the EIN instead of your Social Security number on business paperwork also limits identity-theft exposure.
Most California cities and counties require a separate business license or tax certificate to operate within their jurisdiction, even after you register with the state. Fees vary by locality and business type, and a city license does not satisfy state or county requirements, so check with every agency that covers where you work.
One compliance item you can set aside: the Corporate Transparency Act’s Beneficial Ownership Information report. In March 2025, FinCEN issued an interim final rule removing BOI reporting requirements for entities created in the United States.7Financial Crimes Enforcement Network. FinCEN Removes Beneficial Ownership Reporting Requirements for U.S. Companies and U.S. Persons A California single-member LLC formed by a U.S. person currently has no BOI filing obligation, though the rule is only interim.
What You’ll Owe Every Year
The $800 Franchise Tax
California imposes an $800 annual franchise tax on every LLC registered in the state, regardless of whether the business earned any money or did anything during the year.8California Legislative Information. California Revenue and Taxation Code 17941 It’s due by the 15th day of the fourth month of the taxable year, which is April 15 for calendar-year filers. The tax keeps accruing every year until you formally cancel the LLC with the Secretary of State; stopping operations does not end the obligation.
A first-year waiver existed for LLCs formed between January 1, 2021 and January 1, 2024 under Assembly Bill 85, but that exemption has expired.9California Legislative Information. California Revenue and Taxation Code RTC 17941 An LLC formed in 2026 owes the full $800 in its first year, due by the 15th day of the fourth month after formation.
The Income-Based LLC Fee
On top of the $800 tax, California charges an additional fee once your LLC’s total California-source income reaches $250,000:10California 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
Estimate and prepay this fee by the 15th day of the sixth month of your taxable year (June 15 for calendar-year filers). Underestimating triggers penalties with interest, so round up when your revenue is anywhere near a threshold.
California Form 568
Even though the IRS treats a single-member LLC as a disregarded entity, California still requires you to file Form 568 (Limited Liability Company Return of Income) every year.11Franchise Tax Board. Limited Liability Company For a single-member LLC owned by an individual, the return is due by the 15th day of the fourth month after the close of your tax year (April 15 for calendar-year filers).12Franchise Tax Board. Due Dates: Businesses Form 568 reports the LLC’s income and confirms payment of the $800 franchise tax and any applicable LLC fee. You must file it in every year the LLC exists, including zero-revenue years.
How the IRS Treats Your LLC
The IRS treats a single-member LLC as a disregarded entity by default, so the business files no separate federal return.13Internal Revenue Service. Single Member Limited Liability Companies Income and expenses flow through to your personal return on Schedule C, and the profit is taxed at your individual income tax rates.
Because the IRS views you as a sole proprietor for tax purposes, your LLC’s net earnings are subject to self-employment tax. The combined rate is 15.3% on net earnings up to $184,500 in 2026 (12.4% Social Security plus 2.9% Medicare), and the 2.9% Medicare portion continues above that cap.14Social Security Administration. Contribution and Benefit Base An additional 0.9% Medicare surtax applies when net self-employment income exceeds $200,000 ($250,000 for married filing jointly). You can deduct half of the self-employment tax on your personal return.
Electing S-Corporation Status
When profits grow large enough that self-employment tax hurts, electing S-corporation status can help. You pay yourself a reasonable salary (subject to payroll taxes) and take remaining profit as distributions that escape the 15.3% self-employment tax. The arithmetic only favors you once profit meaningfully exceeds a reasonable salary for your work, and payroll processing costs can swallow the savings for smaller operations.
File IRS Form 2553 no more than two months and 15 days after the start of the tax year you want the election to begin (March 15 for a calendar year), or any time during the preceding year.15Internal Revenue Service. Instructions for Form 2553 California automatically honors a federal S-corp election without a separate state filing.16Taxes. S Corporations An S-corp election brings new obligations: payroll for yourself, quarterly payroll tax returns, and federal Form 1120-S. California also charges a 1.5% tax on S-corporation net income (minimum $800), so the franchise tax does not go away.
Closing the LLC Later
If you decide to close the business, stopping operations is not enough. The $800 annual franchise tax keeps accruing until you formally cancel the LLC.8California Legislative Information. California Revenue and Taxation Code 17941 Cancellation runs through the Secretary of State using Form LLC-4/7 (and, where required, a preceding Form LLC-3 dissolution), or Form LLC-4/8 if the LLC was formed within the last 12 months, never did business, and has no debts.17California Secretary of State. Certificate of Dissolution, Certificate of Cancellation, Short Form Cancellation Certificate None of the cancellation forms carry a filing fee. You also file a final Form 568 with the Franchise Tax Board and check the “Final Return” box.11Franchise Tax Board. Limited Liability Company Until both the Secretary of State cancellation and the final tax return are complete, the state treats the LLC as active and the $800 keeps running.