📋 Business Formation in California
Forming an LLC in California requires filing Articles of Organization (Form LLC-1) with the California Secretary of State. The state filing fee is $70.
- ✓Choose a unique LLC name that includes "LLC" or "Limited Liability Company"
- ✓File Articles of Organization (Form LLC-1) — $70 fee
- ✓Designate a registered agent with a CA street address
- ✓File initial Statement of Information (Form LLC-12) within 90 days of formation — $20 fee
- ✓Pay the $800 minimum franchise tax by the 15th day of the 4th month after formation
- ✓Draft an Operating Agreement (not required by state but strongly recommended)
- ✓Obtain an EIN from the IRS (required for multi-member LLCs and employees)
- ✓Register with the CA Employment Development Department if you have employees
California LLCs are subject to the CA Franchise Tax Board (FTB). The minimum annual franchise tax is $800, regardless of income. Higher-revenue LLCs pay an additional LLC fee on top of the $800.
📅 Key Filing Deadlines & Fees
California's $800 minimum franchise tax applies every year, starting with your first year. New LLCs formed between January 1–December 31 of a year must pay by April 15 of the following year (after year 1).
| Filing / Requirement | Deadline | Fee |
|---|---|---|
| Articles of Organization | At formation | $70 |
| Initial Statement of Information (LLC-12) | Within 90 days of formation | $20 |
| Biennial Statement of Information | Every 2 years, by anniversary month | $20 |
| Annual Minimum Franchise Tax | April 15 each year | $800 minimum |
| Additional LLC Fee (>$250K gross receipts) | With tax return | $900–$11,790 |
| CA State Income Tax Return (Form 568) | April 15 (or Oct 15 with extension) | Varies |
👥 Employment Law Basics
California is an at-will employment state, meaning either party can terminate the employment relationship at any time — but California has some of the strongest employee protections in the nation.
- ✓Minimum wage: $16/hr statewide (2024); some cities higher (e.g., San Francisco $18.67/hr)
- ✓Meal breaks: 30-min unpaid meal break for shifts over 5 hours; 10-min paid rest break per 4 hours
- ✓Overtime: 1.5x pay for hours over 8/day and 40/week; 2x pay for hours over 12/day
- ✓CFRA/FMLA: California Family Rights Act provides up to 12 weeks of protected leave
- ✓Non-competes: Almost entirely unenforceable in California
- ✓CCPA: Consumer Privacy Act applies to businesses meeting revenue/data thresholds
- ✓Independent contractor test: Strict ABC test under AB5 — most workers presumed employees
📄 Relevant Legal Templates
Free downloadable templates commonly used by California businesses.
LLC Operating Agreement
Required best practice for CA LLCs
Employment Contract
CA-compliant at-will employment agreement
Independent Contractor Agreement
Must satisfy AB5 contractor criteria
NDA Template
Non-disclosure agreement for CA businesses
Service Agreement
Client services contract template
Liability Waiver
Release of liability for CA operations
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Employment Agreement
Generate a California-compliant employment contract
Independent Contractor Agreement
IC agreement designed for California law
Mutual NDA
State-specific confidentiality agreement
LLC Operating Agreement
Required for multi-member LLCs in California
Service Contract
Client services contract for California businesses
NDA Generator
One-way or mutual NDAs for any situation
Partnership Agreement
Business co-ownership agreement
Consulting Agreement
Professional services contract
Promissory Note
Loan or promissory note document
Bill of Sale
Asset transfer documentation
Freelance Contract
Creative or technical freelance project contract
Privacy Policy
Website privacy policy for California visitors
Terms of Service
Website terms and conditions
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❓ Frequently Asked Questions
How much does it cost to form an LLC in California?
The state filing fee is $70 for Articles of Organization, plus $20 for the initial Statement of Information. You must also pay the $800 minimum franchise tax starting in your first year. Total first-year cost is typically $890+ before any professional fees.
What is the California franchise tax and do I have to pay it every year?
Yes. California LLCs must pay a minimum $800 franchise tax every year to the Franchise Tax Board, regardless of income or activity. LLCs with gross receipts over $250,000 pay an additional LLC fee ranging from $900 to $11,790 depending on revenue.
When is the Statement of Information due in California?
The initial Statement of Information (Form LLC-12) is due within 90 days of forming your LLC. After that, it must be filed every two years during the anniversary month of your LLC's formation. The fee is $20 each time.
Can I have a non-compete agreement with employees in California?
Generally no. California Business and Professions Code Section 16600 makes non-compete agreements with employees unenforceable in almost all cases. There are narrow exceptions for business sales and partnership dissolutions.
Do I need a registered agent in California?
Yes. Every California LLC must designate a registered agent (also called agent for service of process) with a physical California street address. This can be an individual or a registered agent service.
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Disclaimer: This page provides general legal information only. Laws change frequently. Always consult a licensed attorney in California for advice specific to your situation.