Form a California LLC
LegalZoom is your best resource to start your limited liability company online today. We provide a user-friendly service with hefty customer support to help you create an LLC in three easy steps. Protect your business and personal assets and organize your business with the help of experienced business formation experts.
When you form your California LLC with LegalZoom, we prepare and file your articles of organization with the California Secretary of State. We also conduct a name search for your California LLC, to assist you in the preparation of your operating agreement and provide other customized services corresponding to your needs. Once your articles of organization have been successfully filed, your California LLC has been formed and begins its existence as a corporate entity.
LegalZoom LLC Overview
Registering an LLC Name: Choosing a business name is one of the first steps in the process of forming your California Limited Liability Company. The name that you choose:
Must contain, as the last words of the name, the words "limited liability company" or the abbreviation "LLC" or "L.L.C." as the last words in the name of the limited liability company. The words "limited" and "company" maybe abbreviated to "Ltd." and "Co.," respectively.
May contain the name of one or more members.
Must be distinguishable (not the same as or deceptively similar to) the name of any California Limited Liability Company or foreign LLC reserved or registered.
Must not contain the words "bank," "trust," "trustee,""incorporated," "inc.," corporation," or "corp.," or "insurer" or "insurance company" or any other words suggesting that it is in the business of issuing policies of insurance and assuming insurance risks.
LegalZoom allows you to choose up to 3 names, in order of preference. We will conduct a name check for your California Limited Liability Company before filing to see which names are available.
How to Register: Once you have chosen an available name, LegalZoom can help you register your name with the state.
Articles of Organization: In any California LLC formation, the articles of organization must be filed with the Secretary of State. State law requires that certain information be included in your articles of organization of your California LLC formation. This information must include:
The LLC name
The following statement: "The purpose of the limited liability company is to engage in any lawful act or activity for which a limited liability company may be organized under the Beverly-Killea Limited Liability Company Act".
The name and address of the initial registered agent for service of process on the LLC unless a corporate agent is designated, in which case only the name of the agent shall be set forth.
A statement as to whether the LLC is to be managed by one or more managers and or by its members.
Filing: Your LLC is considered organized once the articles of organization are delivered to the California Secretary of State, and the articles are deemed to be compliance with state requirements. One certified copy of the articles of organization will be issued, and the other certified copy will be returned to the organizer or members.
Additionally, a California LLC formation generally requires inclusion and/or consideration of the following:
Organizers: One or more persons may form a LLC. They need not be members of the LLC.
Minimum Number of Organizers: One or more.
Eligibility: An organizer may be an individual, partnership, limited partnership, trust, estate, association, corporation, limited liability company, or other entity, whether domestic or foreign.
Operating Agreement: Although not required, LLC members may adopt an operating agreement for the company, which may also be amended and repealed as allowed by the agreement or applicable law. The articles of organization may contain restrictions or prohibitions on the power of the members to adopt, amend, or repeal an operating agreement. If there is more than one member, any operating agreement shall initially be agreed to, in writing, by all of the members.
Membership: A limited liability company must have one or more members. Requirements:
Minimum Number of Members: One or more.
Eligibility Requirements: A natural person or an entity
Procedure for Membership: The member may acquire an interest in the LLC directly from the limited liability company at formation and, after formation, at the time provided in and upon compliance with the articles of organization or the operating agreement or, if not provided, only upon the vote of a majority in interest of the members, excluding the vote of the person acquiring the membership interest, and only when the person becomes a party to the operating agreement.
Resident Agent In California
LegalZoom can also provide your business with a registered agent in California. Every California LLC must have a registered agent in California-- the person or office designated to receive official state correspondence and notice if the company is "served" with a lawsuit.
Registered Office: The registered office may be a place of its business.
California Secretary of State
Once a California LLC has been created, the California Secretary of State will require that certain recurring responsibilities and duties be fulfilled. The most important of these are explained below. For further information, contact the California Secretary of State.
Annual Report: Each limited liability company shall provide an annual report to the California Secretary of State regarding its financial condition to its members.
Records: Each limited liability company shall keep following records open to inspection at its office:
A current list of the full name and last known business or residence address of each member and of each holder of an economic interest in the limited liability company set forth in alphabetical order, together with the contribution and the share in profits and losses of each member and holder of an economic interest
If manager-managed, a current list of the full name and business or residence address of each manager.
A copy of the articles of organization and all amendments thereto, together with any powers of attorney pursuant to which the articles of organization or any amendments thereto were executed
Copies of the limited liability company's federal, state, and local income tax or information returns and reports, if any, for the six most recent taxable years
A copy of the LLC's operating agreement, if in writing, and any amendments thereto, together with any powers of attorney pursuant to which any written operating agreement or any amendments thereto were executed.
Copies of the financial statements of the limited liability company, if any, for the six most recent fiscal years.
The books and records of the limited liability company as they relate to the internal affairs of the limited liability company for at least the current and past four fiscal years.
Acts Triggering Dissolution: Unless otherwise provided in the articles or a written operating agreement, a limited liability company is dissolved upon the happening of any one of the following events:
At the time specified in the articles of organization, if any, or upon the happening of the events, if any, specified in the articles of organization or a written operating agreement.
By the vote of a majority in interest of the members, or a greater percentage of the voting interests of members as may be specified in the articles of organization or a written operating agreement
Entry of a judicial order
An LLC can offer certain tax advantages over a corporation, including the availability of more deductions. Additionally, an LLC is not required to be a separate tax entity like a corporation; instead, it can be a "pass-through entity," so that the LLC owners report business losses or profits on their personal tax returns, like a partnership.
State Taxes: State taxes are variable depending on taxable income. Please note that California LLCs are subject to an annual minimum franchise tax of $800 per year. The first payment must be made within 3 months of forming your LLC.
Federal Income Tax: Unless you elect to tax the limited liability company as a corporation, the IRS treats single-member LLCs as sole proprietorships for tax purposes. This means the LLC itself does not pay taxes and does not have to file a tax return. Unless you elect to tax the limited Liability company as a corporation, the IRS treats multi-owned LLCs as partnerships for tax purposes. This means that LLC owners each pay taxes on their lawful share of the profits on their personal income tax returns, not the LLC itself. If you desire, by filing IRS Form 8832, you may elect corporate taxation if you regularly need to keep a substantial amount of profits in your LLC.
Federal Tax Identification Number: Your LLC may need to obtain a federal tax identification number (also known as an employment identification number/ EIN), which is similar to an individual's social security number. Generally, you will not need a separate EIN number for your LLC as long as you are the sole owner and the LLC has no employees. However, if you are not the sole owner of the LLC or if the LLC has employees, your LLC will need a separate EIN number to open a bank account and for certain tax filing requirements LegalZoom can prepare your Federal Tax ID Application if you have not already done so.
Filings must be made with the California Secretary of State in which the LLC was organized, along with the appropriate state filing fee. When appropriate, one check must accompany the document, payable to the California Secretary of State, covering all charges for the Secretary of State.