Forming an LLC in California
Forming an LLC in Alabama in 7 easy steps
- Start by picking out a suitable name for your LLC. When forming an LLC in California you can not use words that imply that your LLC issues insurance policies or assume insurance risks, e.g. “insurance company” or “insurer”. The words “bank”, “trust” and “trustee” are also prohibited. You must also refrain from trademark violations and from using a name that is already used by another LLC. LLC’s formed in California must add an LLC identifier to their name, e.g. “LLC”, “Ltd Liability Co” or “Limited Company”.
- You are not required by California state law to hire an attorney when forming an LLC and many business owners successfully form LLC’s on their own. It is however a good idea to hire an attorney to check your Operating Agreement, since a poorly written Operating Agreement can lead to tax problems in the future.
- Visit the California State filing office and file the Articles of Organization. The minimum state filing fee in California is $70.00. (For 40 business days.) Please note that your also have to pay an $800 Franchise Tax when forming an LLC in Californa.
- Arrange an Organizational Meeting where the members of the LLC formally adopt the Operating Agreement.
- The next step is to obtain a Federal Employer Identification Number (FEIN).
- Arrange a company bank account for your LLC.
- Apply for any necessary permits and business licenses. Remember that you might need to apply for several permits and licenses if you plan on doing business in more than one city/county.
Maintaining an LLC in California
Most states require LLC´s to hand in annual reports, but the state of California only requires a report to be handed in every second year. The report is called “Statement of Information”. The report fee is $25.
In California, a newly formed LLC must pay an $800 Franchise Tax, and then continue to pay $800 per year.
