Steps in Creating an LLC in California

6 Steps in Creating an LLC in California

Creating an LLC in California is the most efficient way to get your business up and running. This post explains how you can create an LLC in the state of California in six simple steps. 

Step #1 – Naming Your LLC

Choosing a name for your company is the most important step in creating an LLC. Just make sure the name you are considering is not in use already by another entity. You can conduct a name search on the State of California’s official website. 

Furthermore, you must ensure to comply with California’s naming Code of Regulations, which are:

  • The name must include “limited liability company” or its abbreviation, i.e., L.L.C. LLC, Ltd, Limited, Company, or Co. 
  • You cannot use words that resemble government agency names such as FBI, State Department, or Treasury.
  • Words such as Attorney, Bank, and University may need additional paperwork. You may also need to have a licensed professional such as a lawyer or a doctor to be a part of the LLC. 

Step #2 – Choosing a Registered Agent 

You must appoint a registered agent in California for the service of process for an LLC. This can be a person or a business entity responsible for receiving important legal documents, tax forms, official government correspondences, legal notices, etc. 

Step #3 – Filling Articles of Organization for LLC in California

To register your LLC in California, you must file an Article of Organization – Form LLC-1 at the Secretary of State office. You can do it in person, online, or via mail. This is when you will also determine whether you want the LLC to be manager-managed or member-managed. 

You will have to pay $70 when filing for Articles of Organization by mail or online, and it is a non-refundable fee. 

Step# 4- Filing Your Initial Statement of Information

Creating an LLC in California requires you to file a Form LLC-12 – Initial Statement of Information. You must submit this form within 90 days of formation. You can submit it online, by mail, or in person.   

The fee for filing for the Initial Statement of Information is $20, and it is non-refundable. 

Step #5 – Creating Your LLC’s Operating Agreement

An operating document is a must to create an LLC in California. This is a legal document that outlines LLC’s ownership and operating protocols. The most important purpose of creating a detailed operating agreement is to ensure that all the business owners, stakeholders, and employees are on the same page. This will help reduce any chances of future misunderstandings or conflicts. 

Step #6- Getting Your LLC EIN

EIN or Employer Identification Number is a 9-digit number assigned to you by the Internal Revenue Service (IRS). Think of it as your business’s social security number to help identify your business for taxation. An EIN will help you open a business bank account, hire employees and file your state and federal taxes. 

You can receive an EIN free of cost through a simple process. However, obtaining an EIN is a must before you can convert a company to an LLC. Once you have the EIN, you can start conducting business as an LLC in the state. Just make sure to reply to any correspondence by the Secretary of State to ensure a swift process of creating an LLC in California.

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