How to Register a Business in California: Entity, Filings, and Taxes

To register a business in California, you file formation documents with the Secretary of State and pay a state filing fee of $70 for an LLC or $100 for a corporation. From there, a short sequence of follow-up steps gets you fully operational: designate a registered agent, submit a Statement of Information within 90 days, obtain a federal EIN, plan for the $800 annual franchise tax, and pick up any local permits your city or industry requires. Skip a step and you risk rejected filings, penalties, or a lapse in liability protection.

Choose Your Entity Type First

Your entity type controls which form you file, how you’re taxed, and how much personal liability you carry. Three structures cover most new California businesses:

Limited Liability Company (LLC). Flexible management, pass-through taxation by default, and personal asset protection for members.
Corporation. A formal structure with directors and shareholders that can issue stock. C-corp is the default; S-corp status is elected with the IRS.
Limited Partnership (LP). At least one general partner with unlimited liability and one or more limited partners whose exposure is capped at their investment.

One restriction catches licensed professionals off guard. California prohibits doctors, lawyers, accountants, engineers, and other licensed practitioners from forming a standard LLC; they must form a professional corporation instead.¹ Check your profession’s rules before you settle on a structure.

Clear Your Business Name

California requires your entity name to be distinguishable from every other name already on file with the Secretary of State, including active corporations, foreign entities authorized to do business here, and names under reservation.² If your proposed name is too close to an existing one, your formation documents will be rejected.

Use the free search tool in the Secretary of State’s bizfile Online portal to check availability before you draft anything.³

Clearing a name with the state is not the same as securing trademark rights. A state entity name lets you operate under that name in California; it doesn’t prevent someone else from using a similar brand nationally. Federal trademark registration through the USPTO is a separate process that protects a name at the national level.⁴

File Your Formation Documents

Each entity type has its own form. LLCs file Form LLC-1, the Articles of Organization.⁵ General stock corporations file Form ARTS-GS, the Articles of Incorporation.⁶ Both are available through the bizfile Online portal or by download.

Every formation document asks for a business address, a brief purpose statement confirming your activities are lawful, and the name and address of your registered agent. Most filers use general language for the purpose statement.

Filing fees:

LLC Articles of Organization (Form LLC-1): $70
Corporation Articles of Incorporation (Form ARTS-GS): $100

In-person drop-off adds a non-refundable $15 service fee.⁵ Processing times vary with the Secretary of State’s workload, from a few business days for online filings to several weeks by mail. Once approved, you receive certified copies confirming your entity legally exists.

Designate a Registered Agent

Every California LLC and corporation must appoint an agent for service of process. The agent receives lawsuits and official notices on the business’s behalf.⁷ The agent must be a California resident or a registered corporate agent, and the address on file must be a physical California street address. P.O. boxes are not accepted.⁸

You can name yourself, but your address becomes public record and you must be reachable during business hours. Commercial registered agent services typically run $100 to $300 per year.

File the Statement of Information Within 90 Days

Within 90 days of formation, you must file a Statement of Information reporting your current officers, managers, or members and their addresses. Miss the deadline and your business falls out of good standing, which can block you from filing lawsuits, entering contracts, or obtaining certain permits.

LLCs file Form LLC-12 within 90 days, then every two years. The fee is $20.⁵
Corporations file Form SI-200 within 90 days, then annually. The fee is $25 ($20 filing fee plus a $5 disclosure fee).⁵

Both filings go through the bizfile Online portal.³ Set calendar reminders for both the initial deadline and the recurring cycle.

Put Governance Documents in Place

Formation documents establish your business with the state. Governance documents establish how the business actually runs. They aren’t filed with California, but they matter for keeping your limited liability intact.

LLC operating agreement. Sets ownership percentages, profit and loss splits, management authority, decision procedures, and what happens when a member leaves or the business dissolves. Even single-member LLCs should have one. Without a written agreement, California’s default statutory rules govern your LLC, and those defaults rarely match what owners actually want.
Corporate bylaws. Define director and officer roles, meeting and voting procedures, share issuance and transfer rules, and director removal. Bylaws are legally required for California corporations.

Courts look at whether you followed your own governance procedures when deciding whether to pierce the corporate veil and hold owners personally liable.

Get an EIN and Choose Your Tax Treatment

Every new entity needs a federal Employer Identification Number from the IRS. You’ll use it on tax returns, to open a business bank account, and to hire employees. The application at irs.gov is free and issues the number immediately.

The IRS doesn’t recognize “LLC” as a tax category. By default, a single-member LLC is a disregarded entity, with income and expenses flowing to the owner’s personal return. A multi-member LLC is taxed as a partnership. You can override the default by filing Form 8832 to be taxed as a C-corporation,⁹ or Form 2553 to elect S-corporation treatment, which can reduce self-employment taxes for profitable businesses.¹⁰ S-corp status carries restrictions: no more than 100 shareholders, all of whom must be U.S. individuals, estates, or certain trusts, and only one class of stock.

The right choice depends on your income, how you plan to pay yourself, and your growth plans. This is a good place to talk to a tax professional.

Plan for the $800 Franchise Tax and LLC Fees

California imposes an annual minimum franchise tax of $800 on most LLCs and corporations.¹¹¹² It’s owed whether or not you earn revenue and continues every year until you formally dissolve or cancel with the Secretary of State.

Corporations incorporated on or after January 1, 2020 are exempt from the $800 minimum in their first taxable year.¹² The comparable first-year exemption for LLCs expired on January 1, 2024, so an LLC formed in 2026 owes the full $800 in year one.¹¹ The one exception: if you file a short-form cancellation within one year of organizing, the first-year tax is waived.

LLCs also owe an additional gross receipts fee once total California income exceeds $250,000:¹¹

$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

The fee is based on total California income, not profit, so high-revenue, low-margin LLCs can face a large bill. The LLC gross receipts fee is due by the 15th day of the 6th month of the current tax year; the $800 franchise tax is due by the 15th day of the 4th month.¹¹

Register as an Employer Before Your First Hire

Three registrations are mandatory before your first employee starts.

Register with California’s Employment Development Department to set up your employer payroll tax accounts. The EDD handles state income tax withholding, Unemployment Insurance, Employment Training Tax, and State Disability Insurance. You can register through the EDD’s e-Services portal.

Carry workers’ compensation insurance. California requires every employer with one or more employees to have coverage; there is no small-business exemption. Failing to have coverage is a criminal misdemeanor punishable by a fine of up to $10,000, up to one year in county jail, or both, and the state can issue a stop order shutting down your use of employee labor until you obtain coverage.¹³

Complete Form I-9 for every new hire. Federal law requires the form within three business days of the start date, and you must retain it for either three years after hire or one year after employment ends, whichever is later.¹⁴

Pick Up Seller’s Permits, Local Licenses, and DBAs

State registration creates your legal entity. It doesn’t authorize you to conduct business in a specific city or industry.

If you sell or lease tangible personal property in California, you need a seller’s permit from the California Department of Tax and Fee Administration. This applies to retailers and wholesalers and to individuals, corporations, partnerships, and LLCs.¹⁵ The permit is free, but you may need to post a security deposit based on estimated sales volume.

Most cities and counties require a business tax certificate, sometimes called a business license, before you open. Fees vary by jurisdiction. Local zoning ordinances also dictate where certain businesses can operate; a home-based consulting firm faces different rules than a restaurant or auto repair shop. Check with your city or county clerk’s office before signing a lease.

If you operate under a name different from the one on your Secretary of State filing, file a Fictitious Business Name statement at the county level. If your LLC is registered as “Pacific Coast Ventures LLC” but you do business as “Sunset Surf Shop,” the trade name needs its own filing.¹⁶ File with the county clerk where your business is located, then publish the statement in a local newspaper within 30 days. County filing fees generally run $10 to $50, and newspaper publication adds around $50. The statement expires after five years and must be renewed if you’re still using the name.

If Your Business Was Formed in Another State

Out-of-state businesses don’t re-incorporate in California. Instead, file for foreign qualification to register your existing entity to operate here. Foreign LLCs file Form LLC-5 ($70); foreign corporations file a Statement and Designation ($100).⁵ You still need a California registered agent, and you’re still subject to the $800 annual franchise tax and Statement of Information requirements.

One federal filing does not apply to most California businesses. As of March 2025, domestic companies are exempt from FinCEN’s Beneficial Ownership Information reporting under an interim final rule that removed them from the Corporate Transparency Act’s reporting scope.¹⁷ Foreign-owned entities registered to do business in the U.S. still face a 30-day filing deadline after registration; check current FinCEN rules if that applies to you, since the area is still evolving.

1
California Legislative Information. California Corporations Code 17701.04
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California Legislative Information. California Corporations Code 201
3
California Secretary of State. Online Business Services
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USPTO. How Trademarks and Trade Names Differ
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California Secretary of State. Business Entities Fee Schedule
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California Secretary of State. ARTS-GS Articles of Incorporation of a General Stock Corporation
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California Legislative Information. California Corporations Code 17701.13
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New York Codes, Rules and Regulations. 16 CCR 2326.3
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Internal Revenue Service. Form 8832 Entity Classification Election
10
Internal Revenue Service. Limited Liability Company (LLC)
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Franchise Tax Board. Limited Liability Company
12
Franchise Tax Board. Corporations
13
California Department of Industrial Relations. DWC FAQs for Employers
14
USCIS. I-9 Central
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CDTFA. Obtaining a Seller’s Permit
16
New York Codes, Rules and Regulations. 10 CCR 1781 – Fictitious Firm Names
17
Federal Register. Beneficial Ownership Information Reporting Requirement Revision and Deadline Extension