California LLC Cost Guide: What It Costs to Start and Run Your Business
The $70 filing fee is just the beginning. Here's a full breakdown of California LLC costs — formation, franchise tax, annual filings, and ongoing compliance — so you can plan ahead.
Bizee Editorial Staff
Editorial Team
California LLC cost snapshot
Filing fee: $70 (Articles of Organization, Form LLC-1)
Processing time: Standard: 5–7 business days online; expedited options available
State agency: California Secretary of State (bizfileonline.sos.ca.gov)
Annual report due: Statement of Information (Form LLC-12): within 90 days of formation, then biennially — $20 filing fee
State tax rate: $800 minimum annual franchise tax (California Franchise Tax Board); additional LLC fee applies if gross receipts exceed $250,000
Formation costs: what you pay upfront
Forming an LLC in California starts with a $70 state filing fee for your Articles of Organization (Form LLC-1), filed with the California Secretary of State. That's the only mandatory upfront cost to get your LLC on record. Within 90 days of formation, you'll also need to file your initial Statement of Information (Form LLC-12) for $20.
Most people focus on the $70 and stop there — but the Statement of Information deadline catches a lot of new LLC owners off guard. Miss the 90-day window and you're looking at a $250 penalty.
- Articles of Organization (Form LLC-1): $70 state fee
- Statement of Information (Form LLC-12): $20, due within 90 days of formation
- Expedited filing: additional fee depending on processing tier selected
Ongoing costs: what you pay every year
Every California LLC owes an $800 annual franchise tax to the Franchise Tax Board — no matter how much (or how little) the business earns. For calendar-year LLCs, the first payment is due within 3 months and 15 days of formation. After that, it's due by April 15 each year.
If your LLC's total California gross receipts hit $250,000 or more in a year, an additional LLC fee applies on top of the $800 minimum. The fee scales with gross receipts and is reported on Form 568. This is the cost that surprises most growing businesses — plan for it before you hit that threshold.
Beyond the franchise tax, you'll file a biennial Statement of Information every 2 years for $20. Many cities and counties also require a local business license — fees vary by jurisdiction and are often based on gross receipts or business type.
- Annual franchise tax: $800 minimum, due by April 15 each year (first payment due within 3 months and 15 days of formation)
- Additional LLC fee: applies when California gross receipts reach $250,000 or more — reported on Form 568
- Biennial Statement of Information (Form LLC-12): $20 every 2 years
- Local business license: varies by city and county — check with your local jurisdiction
Optional but worth it: costs that save you time
Some costs aren't required by the state but are worth budgeting for — especially if you want to protect your business and keep compliance off your plate. A registered agent is technically optional if you have a California street address and can be available during business hours, but most LLC owners use a service to keep their personal address off public records.
An operating agreement isn't filed with the state and costs nothing to create, but it's the document that defines how your LLC runs — ownership splits, decision-making, and what happens if a member leaves. Skipping it doesn't save money; it creates problems later that cost more to fix.
- Registered agent service: typically $100–$300 per year — keeps your personal address off public filings
- Operating agreement: no state fee — free to draft yourself or through a formation platform
- Employer Identification Number (EIN): free to apply for directly at irs.gov
- Business bank account: no state fee — fees vary by bank, with many offering free business checking
The cheapest way to form an LLC in California
The cheapest way to form an LLC in California is to file directly with the California Secretary of State at bizfileonline.sos.ca.gov and pay the $70 state fee yourself. You handle the paperwork, track the deadlines, and manage the filings. That's the floor.
One mistake that costs more than it saves: forming your LLC in another state — Wyoming or Delaware, for example — while doing business in California. California still requires you to register as a foreign LLC and pay the $800 franchise tax. You end up paying fees in two states instead of one.
If you want the $70 state fee covered and your first year of registered agent service included, Bizee handles the filing for $0 + state fee. You get the formation done without tracking down the forms yourself, and the registered agent requirement is handled from day one.
FAQ
The minimum upfront cost is $90: $70 for the Articles of Organization and $20 for the initial Statement of Information, which is due within 90 days of formation. You'll also owe the $800 annual franchise tax within 3 months and 15 days of your formation date, so most first-year budgets run at least $890 before any optional services.
It depends on when your LLC was formed. California previously offered a first-year franchise tax exemption for LLCs formed between January 1, 2021 and December 31, 2023. That exemption has expired. LLCs formed now owe the $800 franchise tax for their first year, due within 3 months and 15 days of the formation date. A tax professional can help you figure out your specific payment schedule.
Pay the $800 annual franchise tax using Form 3522 (LLC Tax Voucher), filed with the California Franchise Tax Board. You can pay online through the FTB's Web Pay system at ftb.ca.gov. The first payment is due within 3 months and 15 days of your LLC's formation date. After that, it's due by April 15 each year for calendar-year LLCs.
It depends on your total California gross receipts for the year. LLCs with gross receipts under $250,000 owe only the $800 minimum franchise tax. Once gross receipts hit $250,000, an additional LLC fee applies — it scales up from there and is reported on Form 568. If your business is growing toward that threshold, budget for this fee before you hit it.
The cheapest path is filing directly with the California Secretary of State through BizFile Online and paying the $70 state fee yourself. That's the floor. Avoid forming in another state to save money — if you're doing business in California, you'll still owe the $800 franchise tax and a foreign registration fee, which means you're paying fees in 2 states instead of 1.
Yes. Every California LLC must maintain a registered agent with a physical street address in California who is available during normal business hours. You can serve as your own registered agent if you have a California street address. Most LLC owners use a registered agent service — typically $100–$300 per year — to keep their personal address off public state filings.
The Statement of Information (Form LLC-12) is a required filing with the California Secretary of State that updates your LLC's address, registered agent, and member information. Your first filing is due within 90 days of forming your LLC. After that, you file it every 2 years within 4 months of your LLC's anniversary month. The filing fee is $20.
No. California charges a $70 state filing fee for the Articles of Organization — there's no way to waive it. Some formation platforms, including Bizee, charge $0 for their own service and pass through only the state fee, so you're not paying extra for help with the filing. But the $70 goes to the state regardless of how you file.
