$890 to form your California LLC
$70 state filing fee · $800/yr franchise tax · $20biennial report. 5-year cost of ownership: $4,130.
By Aissam Baidi · Reviewed against www.sos.ca.gov · Verified 2026-05-28
How much does a California LLC cost in 2026? A California LLC costs $890 in year one ($70 filing fee for the Form LLC-1 (Articles of Organization) plus $800 franchise tax). Ongoing cost is $810/year ($20 biennial report + $800 franchise tax). Five-year total: $4,130. Standard processing takes about 21 business days; expedite for $350 extra. At $890, California runs $735 above the US median of $155 for year-one LLC costs, mostly driven by franchise tax. While the year-one cost is on the higher end, it still makes sense for businesses operating physically in-state, since forming out-of-state would trigger foreign-LLC registration fees that often exceed the savings. Sourced from www.sos.ca.gov, verified 2026-05-28.
California at a glance
- #1Professional, Scientific & Technical Services
- #2Health Care & Social Assistance
- #3Retail Trade
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California vs the rest of the US
Year-1 LLC cost in California is $890. That's $855 more than the cheapest state (Montana). Form there if you can register your business out-of-state.
All figures are year-1 LLC formation cost (state filing fee + first-year report fee + first-year franchise tax). Sourced quarterly from each state's Secretary of State office.
5-year cumulative cost projection
How California's LLC cost compares against the popular "shop another state" alternatives over 5 years of ownership. Steeper line = higher recurring cost.
All 50 states + DC, by 5-year LLC cost
Heat-map of 5-year ownership cost across the US. Click any state to see its full breakdown. Cheapest in green, most expensive in dark red.
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5-year cost = year-1 (state filing + first-year report + first-year franchise tax) + 4 years of ongoing (annual/biennial report + franchise tax). Sourced quarterly from each Secretary of State.
Where would you save the most?
Filing in Montana instead of California could save you about $4,095 over 5 years (99% lower total).
Cross-state filing requires foreign qualification in the state you actually operate from, which adds $50-$300/year in fees plus a registered agent in each jurisdiction. Run the math before deciding.
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California LLC formation, decoded
California charges $800 per year in franchise tax regardless of revenue. Over 5 years, that compounds to $3,200 in addition to your filing and report fees.
Full California LLC cost guide
California LLC Cost: $70 Filing + $800 Franchise Tax (2026)
Forming an LLC in California costs $70 to file with the Secretary of State, plus a $20 Statement of Information within 90 days, then a $800 annual minimum franchise tax to the Franchise Tax Board starting in year one. Total year-one cost: $890. Five-year cost of ownership: $4,070. California is the most expensive state for LLC ownership over time, driven entirely by the $800/yr franchise tax, not the formation fee.
Reviewed by LLC Formation Cost Editorial Team, fact-checked against primary government sources • Last updated 2026-05-28 • 4 primary government sources cited
TL;DR
California LLCs pay $70 to the Secretary of State for the Articles of Organization (Form LLC-1) and $20 for the initial Statement of Information (Form LLC-12) due within 90 days of formation. Year 2 onwards, the Statement of Information is biennial ($20 every 2 years). The big number is the $800 annual minimum franchise tax to the California Franchise Tax Board, payable each year starting year one (the AB 85 first-year exemption that applied to 2021-2023 formations has sunset). LLCs with California-source gross receipts above $250K also owe an additional gross receipts fee on a sliding scale up to $11,790. California processes online filings in 7-10 business days standard; expedite is available at the Sacramento walk-in office for $350-$750. The state requires an operating agreement (Cal. Corp. Code § 17701.10), though it doesn’t have to be filed with the SOS.
California LLC cost breakdown (2026)
| Line item | Cost | Source |
|---|---|---|
| Articles of Organization (Form LLC-1) | $70 | sos.ca.gov |
| Statement of Information (Form LLC-12), initial | $20 | sos.ca.gov |
| Statement of Information, biennial after | $20 | sos.ca.gov |
| Annual minimum franchise tax | $800/yr | ftb.ca.gov |
| Gross receipts fee (>$250K CA-source) | $900-$11,790 | ftb.ca.gov |
| Year 1 total (no add-ons) | $890 | |
| Year 2+ ongoing | ~$810 | ($800 + $10 amortized biennial) |
| 5-year total | $4,070 |
All figures verified 2026-05-28 from primary California state sources.
Why California is so expensive
The $800 minimum franchise tax is a fixed cost, not a percentage of revenue. A California LLC with $0 revenue still owes $800 to the FTB each year. The tax was set in 1957 and has remained $800 ever since, it’s not indexed to inflation, but neither is it scaled to business size.
For comparison: a Wyoming LLC with $0 revenue owes $60/yr. Over 5 years, the gap is $4,000 ($340 vs $4,070). This is the math that drives the “form in Wyoming” pitch, and the math that gets demolished by California’s nexus rules. If you have offices, employees, or substantial sales in California, you owe the $800 regardless of formation state. Source: California Franchise Tax Board LLC guidance.
The first-year exemption under AB 85 (2020) waived the $800 for LLCs formed 2021-2023. The exemption has sunset. LLCs formed in 2024 and later owe the $800 in year one, prorated by months remaining in the tax year. We verified this directly against the FTB’s current LLC publication on 2026-04-25.
Filing steps (DIY, no service)
- Pick a name, search availability via California’s bizfile portal. Names must end in “LLC” or “Limited Liability Company” and not conflict with existing CA entities.
- Designate a registered agent, must have a CA street address. You can act as your own agent if you live in California.
- File Articles of Organization (Form LLC-1), $70 fee. File online at bizfileonline.sos.ca.gov or by mail.
- File Statement of Information (Form LLC-12), $20, due within 90 days of formation. Lists members, registered agent, and principal office.
- Get a federal EIN, free at irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online. Required for hiring, opening a bank account, or filing partnership returns.
- Draft an operating agreement, required by Cal. Corp. Code § 17701.10 but not filed with the state. Free templates from the State Bar of California or attorney-drafted ($400-$800).
- Register for state taxes, sales tax permit (if selling tangible goods) via CDTFA, employer registration via EDD if hiring employees.
- Open a business bank account, most CA banks (Chase, BoA, Wells Fargo, local credit unions) require the filed Articles, Statement of Information, EIN letter, and operating agreement.
- File the FTB 568 LLC Tax Return, annual, due by the 15th day of the 4th month after tax year end. The $800 franchise tax is paid via this filing or the Form 3522 voucher.
- Calendar the renewals, Statement of Information biennial, FTB 568 annual.
Online filings via bizfileonline.sos.ca.gov are processed in 7-10 business days standard. Expedite (24-hour turnaround) requires walk-in service at the Sacramento office: $350 for 24 hours, $500 for same-day, $750 for 4-hour. Source: California SOS processing times, verified 2026-05-28.
Page-unique facts
- California is the only state where the SOS filing fee ($70) is dramatically lower than the franchise tax ($800). Most states have one or the other, not both.
- California LLCs file on FTB Form 568, not Form 1065. Even multi-member partnerships file the CA-specific 568 plus the federal 1065.
- The $800 prorates for short tax years. An LLC formed November 2025 owes 2/12 × $800 = $133.33 for that 2-month sliver. Then $800 for full year 2026.
- Attorney professional services in CA require PLLC formation. Lawyers, doctors, accountants, architects, and other licensed professionals cannot use a regular LLC, they must form a Professional LLC under Cal. Corp. Code § 17701.04(e). Source: California State Bar PLLC guidance.
- CA has no first-year filing exemption in 2026. AB 85’s first-year $800 waiver covered 2021-2023 formations. Confirmed sunset; 2026-formed LLCs owe $800 in year 1.
FAQ
Is the California $800 franchise tax mandatory?
Yes, for any LLC doing business in California, including foreign LLCs (formed in another state) with California nexus. The $800 is a minimum; LLCs with CA-source gross receipts above $250,000 also owe an additional gross receipts fee on a sliding scale ($900 at $250K, ramping to $11,790 at $5M+). Source: California Franchise Tax Board LLC guidance, verified 2026-05-28.
Can I avoid California’s $800 by forming in Wyoming?
No, if you operate in California. The CA franchise tax applies to any LLC “doing business” in California, generally meaning offices, employees, or substantial sales. A Wyoming-formed LLC with CA nexus owes both: $60/yr in Wyoming + $800/yr in California + a CA foreign qualification fee ($70). The math gets worse, not better. Source: California Revenue and Taxation Code § 23101 (doing business definition).
How long does California LLC formation take?
Standard online filing via bizfileonline.sos.ca.gov: 7-10 business days. Walk-in expedite at the Sacramento office: 24-hour ($350), same-day ($500), 4-hour ($750). Mail filings: 4-6 weeks. Source: California SOS processing times, verified 2026-05-28.
Do I need to file a Statement of Information for my California LLC?
Yes. The initial Statement of Information (Form LLC-12) is due within 90 days of formation. After the initial filing, the SOI is biennial, every 2 years, for $20 each. Missing the SOI deadline triggers a $250 penalty and eventually administrative suspension by the FTB. Source: sos.ca.gov Form LLC-12 page.
Does the $800 franchise tax apply if my California LLC made $0?
Yes. The $800 minimum franchise tax is a flat floor, not a percentage of revenue or profit. A California LLC with zero gross receipts in its first full tax year still owes $800 to the Franchise Tax Board. The historic AB 85 first-year exemption (signed 2020 under Governor Newsom, applicable only to LLCs formed in 2021, 2022, or 2023) sunset on December 31, 2023. LLCs formed in 2024 and after pay $800 prorated by months active in year one, then $800 every subsequent year. Source: ftb.ca.gov LLC FTB 568 booklet, verified 2026-05-28.
Will forming a Wyoming LLC let me dodge the California $800?
No, if you live, work, or have customers in California. Cal. RTC § 23101 defines “doing business” broadly: a single California-resident manager, a California office, or more than $711,538 in California-source sales (2026 threshold) all create nexus. A Wyoming LLC operating in California must register as a foreign LLC ($70), pay the $800 California franchise tax, AND keep paying Wyoming’s $60 annual report, three layers of cost instead of one. The IRS confirms LLC residency follows nexus, not formation state. See the IRS California Small Business Resources page for federal cross-reference.
State quirk: AB 85, the franchise tax exemption that nearly was
California’s $800 minimum franchise tax has a notable historical footnote. Assembly Bill 85 (2020) waived the $800 in year one for LLCs, LPs, and LLPs formed during 2021-2023, intended as pandemic-era relief for new businesses. The exemption sunset on December 31, 2023 and was not extended despite three legislative attempts in 2024-2025. California is also unusual in pairing one of the cheapest formation fees in the country ($70) with the most expensive recurring franchise floor ($800), a structural quirk dating to the 1957 Bank and Corporation Tax Law that has never been indexed to inflation. See California Department of Tax and Fee Administration for cross-agency context.
Common mistake in California
The most expensive California LLC mistake is forgetting that the $800 minimum franchise tax kicks in immediately in year one even when the LLC has $0 revenue, no operations, and no bank account yet. Many founders form in November expecting to “start fresh in January” and discover an $800 bill (prorated to ~$133 for two months) plus a $250 SOI penalty if Form LLC-12 wasn’t filed within 90 days.
Sources
- California Secretary of State Business Entities Forms, last verified 2026-05-28
- California Franchise Tax Board LLC guidance, last verified 2026-05-28
- California SOS Processing Times, last verified 2026-05-28
- California Revenue and Taxation Code § 23101, last verified 2026-05-28
- IRS California Small Business and Self-Employed Resources, last verified 2026-05-28
- IRS Publication 3402, Taxation of Limited Liability Companies, last verified 2026-05-28
About the author
Aissam Baidi is the founder and researcher behind llcformationcost.com. He verifies California LLC fees directly from sos.ca.gov and ftb.ca.gov on a quarterly cycle. Connect on LinkedIn.
Not legal advice. Estimates based on publicly available data from each state’s Secretary of State office. Consult a licensed attorney in your jurisdiction.
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Pre-answered for the questions founders ask first. Tap one to read the full answer, or write your own.
What's the actual filing fee in California?
California charges $70 to file the Form LLC-1 (Articles of Organization) with www.sos.ca.gov. Expedited service is available for an additional $350, reducing turnaround to about 1 business days vs. the standard ~21.
Does California have a franchise tax?
Yes. California levies a $800/year franchise tax on LLCs regardless of revenue. Year-one is also $800. Over 5 years that compounds to roughly $4,000 in franchise tax alone.
What's the annual report situation in California?
California requires a biennial report at $20. That cadence is every two years, so the amortized cost is roughly $10/year.
Do I need a registered agent in California?
Yes. Every California LLC must designate a registered agent with a physical California street address (no P.O. boxes), available during business hours to accept legal mail. You can serve as your own agent for free if you live in California, but most founders use a commercial service ($100-150/year) to keep their home address off the public record.
Should I form my LLC in California?
Form in California if you operate primarily in California. Out-of-state formation (Delaware, Wyoming, etc.) requires foreign-LLC qualification in your home state, doubling fees. The exception is highly venture-funded startups raising priced rounds, where Delaware is investor-expected.
California-specific Operating Agreement preview
Five substantive sections with California-specific clauses (filing form, franchise tax, publication requirements, governing law). Use as a starting point with your attorney, or upgrade for the full 12-section document.
OPERATING AGREEMENT OF [COMPANY NAME], LLC
Article I. Formation
This Operating Agreement is entered into as of [date], by and among the undersigned members of [Company Name], a Limited Liability Company organized under the California Limited Liability Company Act. The Company was formed by filing the Form LLC-1 (Articles of Organization) with the California Secretary of State on [filing date]. The Company's principal office is located at [address], California.
Article II. Members & Membership Interests
The members of the Company are listed on Exhibit A. Each member's capital contribution and percentage interest are set forth therein. Members may be admitted only by [unanimous / majority] consent of existing members. California law does not mandate a written operating agreement, but the parties agree that this writing governs.
Article III. Management
The Company shall be [member-managed / manager-managed]. California default rules apply to any matter not addressed here. The Company shall set aside reserves for the annual California franchise tax of $800. The Company shall timely file the biennial report ($20) with the California Secretary of State to maintain good standing.
Article IV. Distributions & Allocations
Profits, losses, and distributions shall be allocated among members in proportion to their percentage interests, except as otherwise agreed in writing. Distributions shall be made [quarterly / annually / at the discretion of the [members / managers]]. The Company shall maintain capital accounts in accordance with Treas. Reg. § 1.704-1(b).
Article V. Dissolution & California-Specific Provisions
The Company shall dissolve upon [vote of majority members / occurrence of specific events]. Upon dissolution, the Company shall wind up its affairs and distribute remaining assets in accordance with California law. This agreement is governed by California law and any disputes shall be resolved in [forum].
7 more sections in the full document
Tax matters, indemnification, transfer restrictions, dissolution mechanics, signature pages, exhibits A & B (member roster + capital contributions), and amendment procedures. Plus state-specific signature-line text per $California convention.
Not legal advice. This template is a starting point for discussion with a licensed California attorney. Operating Agreements should be reviewed by counsel for your specific situation.
California LLC cost vs popular alternatives
A common decision is whether to form in your home state or an out-of-state filing state (Delaware, Wyoming, New Mexico). Out-of-state formation usually requires foreign-LLC registration in your home state too, adding both filing costs.
| State | First-year cost | Annual renewal | Franchise tax | Processing days | Publication required |
|---|---|---|---|---|---|
| California | $890 | $810 | $800/yr | 21 days | - |
| New Mexico | $50 | $0 | - | 14 days | - |
| Wyoming | $160 | $60 | - | 14 days | - |
| Delaware | $390 | $300 | - | 14 days | - |
| Texas | $300 | $0 | - | 7 days | - |
Fees verified 2026-05-28 from each state's Secretary of State.
Frequently asked questions about California LLCs
How much does it cost to form an LLC in California in 2026?
California charges $70 to file the Form LLC-1 (Articles of Organization). An ongoing biennial report fee of $20 keeps the LLC in good standing. Plus a $800 franchise tax annually. Verified 2026-05-28 from www.sos.ca.gov.
Does California require an annual report?
Yes. California requires a biennial report at $20.
What is the processing time in California?
Standard processing in California takes about 21 business days. Expedited processing is available for an additional $350, reducing turnaround to about 1 business days.
Does California have a publication requirement?
No. California does not require LLC formation to be published in newspapers.
Why does California cost $800 every year for an LLC?
California levies an $800 annual minimum franchise tax on every LLC, due whether the LLC has revenue or not. It is collected by the Franchise Tax Board (not the Secretary of State) and applies in year one through every year the LLC exists. The first-year exemption created by AB 85 (which waived the $800 in 2021-2023) expired January 1, 2024, so every California LLC formed in 2026 owes the $800 in year one. This is the single biggest reason California ranks among the most expensive LLC states despite a modest $70 filing fee.
Can I avoid California's $800 LLC tax by forming in Delaware or Nevada?
Generally no. If you live in California, work from California, or earn income from California customers, the Franchise Tax Board treats your out-of-state LLC as "doing business in California" under R&TC § 23101 and you owe the $800 plus a $20 Statement of Information fee anyway. You also still pay the home-state filing fee for the foreign LLC registration in California ($70). Forming in another state only avoids California tax if you genuinely have zero California nexus, which is rare for residents.
Is the $20 Statement of Information annual or biennial in California?
Biennial. The first Statement of Information is due within 90 days of formation, and then every 2 years thereafter. The fee is $20 each filing. California is one of only a handful of states with a biennial (rather than annual) information-report cycle, which slightly reduces the recurring filing burden compared to states like Florida or Nevada.
How much does it actually cost to form a California LLC in year one?
For a single-member California LLC formed in 2026 with no add-ons: $70 LLC-1 filing fee + $800 minimum franchise tax + $20 Statement of Information = $890 in year one. Add a registered-agent service ($100-$300/yr) if you need one, an EIN service ($79-$99 if you do not file directly with the IRS for free), and operating-agreement drafting ($0 with a template, $400-$1,500 with an attorney). Most California LLCs end up around $890-$1,200 in year one all-in.
Does California require a publication notice for LLCs?
No. California does not require LLC formation to be published in newspapers. This is a New York / Arizona / Nebraska requirement, not a California one. The only mandatory California filings are the LLC-1 (Articles of Organization), the Statement of Information within 90 days, and the $800 franchise-tax payment.
How long does it take the California SOS to approve an LLC?
Standard online filings through bizfile.sos.ca.gov take approximately 8 business days as of 2026 verification. Paper-mail filings take 4-6 weeks. Expedited 24-hour processing is available for an additional $350, and same-day expedite for $750. The standard queue lengthens during quarter-end periods (March, June, September, December), expect 50-100% longer turnaround in those windows.
Do I need a California business license in addition to the LLC?
Yes, but it is separate from forming the LLC. California LLCs must obtain a city or county business license (typically $50-$300/yr depending on city), a Seller's Permit if collecting sales tax (free from CDTFA), and any industry-specific licenses. The LLC-1 filing only creates the legal entity, it does not authorize you to operate. San Francisco, Los Angeles, and San Diego all require additional gross-receipts taxes for LLCs above certain revenue thresholds.
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Open the AI advisorNot legal advice. Estimates based on publicly available data from each state's Secretary of State office. Consult a licensed attorney in your jurisdiction.