Name Your Company
The first step in starting an LLC in California is to select a name for your LLC. The name you select must end with the words “Limited Liability Company” or the abbreviation LLC or L.L.C. There are also some restrictions on words in your name. You can’t use words like bank, trust, incorporated, inc., insurer, insurance company or words that imply your company is in the insurance industry. Keep in mind that an LLC formation in California is not possible for a professional service company (any profession that requires a license). You will need to check the state business name database to make sure your company’s name is not the same as or similar to an existing business. If you aren’t sure if the name is too similar you can ask the state by sending the state a California LLC name availability inquiry. You can pay to reserve a name for two months by using a name reservation form.
Choose Your Registered Agent
Once you’ve chosen a name and are ready to file your LLC, the next step is to select a registered agent. The registered agent is the person you designate to receive legal service for your LLC California. The agent must live in California. You can choose an individual (a member of the LLC is fine) or you can hire a business that is set up to perform this service.
Choose a Management Type
When you form an LLC in California, you must determine how it will be managed. The members (owners) of the LLC could be the managers or you can select an individual or company outside of your LLC to professionally manage it for you.
File Articles of Organization
When learning how to file an LLC in California, the next step is to complete your articles of organization. Fill out the form completely, being certain to include the company’s name, registered agent, address, management type, and signature of the person signing the form. There is a filing fee that must be paid. If you’re in a hurry, expedited filing is available.
Although California does not require you to file an operating agreement, it makes sense to create one. This creates the rules your LLC will follow in doing business and further make it clear that you are running an LLC and not a sole proprietorship, protecting your personal liability.
Statement of Information
After you’ve filed your articles of organization, there is one more filing you need to do to form an LLC in California. Within 90 days of filing your articles, you need to file a Statement of Information. You will need to file this form every two years moving forward.
If your LLC has more than one member or if you plan to be taxed as a corporation, be sure to get an EIN, a federal tax number. Be sure to pay taxes to the California Franchise Tax Board if you are not being taxed as a corporation.
If you create a new LLC and do your LLC filing California it is called a domestic LLC. However, you can create an LLC in another state and then register in California if you intend to do business in the state. This is called a foreign LLC. To register a foreign LLC, you must get a certificate from the state where it is registered that it the LLC is in good standing (contact the department of state in that state). Then file an application to register your LLC with California and pay a fee.
An LLC can be a good way to organize your business in California. Following all the steps necessary to legally register it will get your business off to a good start.
If you want help filing an LLC in California, LegalZoom is here for you. Just answer a few questions in our online questionnaire and we help you fill out and file the paperwork with the state.