How to Become an LLC in California
As a LLC, business owners have the option to determine how the IRS will tax their business, whether as a corporation, partnership or sole proprietorship. With a limited liability company, business owners in California are allowed to make use of the "LLC" designation after the chosen business name, lending credibility to the organization with potential investors, customers and vendors. Even more importantly, becoming a LLC will assist in the separation and serve in the protection of personal assets from debts and obligations accrued from business activities.
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Things You'll Need
- Computer
- Internet Access
- Printer
- Printer paper
- Pen
- Fax machine
- Major credit card
Instructions
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Select a business name for your LLC and ensure that the name is unique and available for use in the state of California.
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2
Set up and file articles of formation with the California Secretary of State. These can be filled out online at the Secretary of State's website, then printed, signed and faxed back to the Secretary of State. The fee will run the organization $70 to file. Expedited service will incur other fees. The filing fee can be paid online with a major credit card. The filing of the articles of formation establishes the legal existence of the LLC and is effective from the date filed upon approval.
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3
Discuss with an attorney, and then, put together an operating agreement as required by the California Corporation Code 10750.
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File a statement of information with the Secretary of State as required by California Corporation Code 10760. This must be completed within 90 days of filing the articles of organization and then refiled annually. The fee for this particular filing is $25.
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5
File a fictitious name statement, if the LLC intends on using a fictitious name to conduct business. The must be done within 40 days of filing the articles of organization.
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Acquire all local licenses compulsory for your business, including a seller's permit from the State Board of Equalization if your organization will be selling products or goods in California.
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7
Ascertain what taxation and other regulative responsibilities the LLC holds, and deal with all pertinent registrations.
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8
Establish a business banking account, separate from all personal financial activities.
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Tips & Warnings
Upon registration of a new LLC, the State of California does not cross-reference name availability against existing corporations, just LLC registrations. You will want to make sure you check both.
Limited liability companies formed in California are liable for a minimum of $800 state tax payable to the Franchise Tax Board annually.
Approval of filing in California, for a LLC can take up to two months, contingent upon the number of articles submitted and registrations pending before yours.
References
Resources
- Photo Credit California flag image by palmer530 from Fotolia.com
