What are the step-by-step requirements to form a Limited Liability Company (LLC) in California?

To form a California LLC, you must file Articles of Organization with the Secretary of State, create an operating agreement, and fulfill initial and ongoing state filing and tax requirements. Here are the step-by-step instructions. Step 1: Choose a Compliant Name Your LLC name must end with "Limited Liability Company," "LLC," or "L.L.C." and must be distinguishable from other business names on file with the state. You can check for name availability on the California Secretary of State's website before filing. Step 2: Appoint a Registered Agent You must designate a person or company (a "Registered Agent for Service of Process") to accept official legal and tax documents for the LLC. The agent must have a physical street address in California, not a P.O. Box. You can act as your own agent if you meet the requirements. Step 3: File Articles of Organization (Form LLC-1) This is the document that officially creates your LLC. You must file it with the California Secretary of State, either online, by mail, or in person. The form requires your LLC's name, business address, and registered agent information. A state filing fee is required. Step 4: Create an Operating Agreement California law requires LLCs to have an Operating Agreement. This internal document outlines ownership, member duties, and operational rules. It is not filed with the state but should be kept with your company records. Step 5: File a Statement of Information (Form LLC-12) Within 90 days of filing your Articles of Organization, you must file an initial Statement of Information. This form must then be filed every two years. Filing can be done online and requires a separate fee. Failure to file on time can result in penalties. Step 6: Pay the Annual Franchise Tax All LLCs doing business in California must pay an annual $800 minimum franchise tax to the Franchise Tax Board (FTB). The first payment is due by the 15th day of the fourth month after your LLC is formed. Important considerations: After formation, you must also obtain an Employer Identification Number (EIN) from the IRS if you plan to hire employees or have multiple members. You may also need to secure local business licenses or permits depending on your industry and location. Note: Missing deadlines for the Statement of Information or franchise tax payments can lead to significant penalties and the potential suspension of your LLC's status, which prevents it from legally conducting business. This is general information and does not constitute legal advice. For complex situations, consult with a qualified California attorney.