California LLC Cost: $70 Filing + $800 Franchise Tax (2026)
Forming an LLC in California costs $70 to file with the Secretary of State, plus a $20 Statement of Information within 90 days, then a $800 annual minimum franchise tax to the Franchise Tax Board starting in year one. Total year-one cost: $890. Five-year cost of ownership: $4,070. California is the most expensive state for LLC ownership over time, driven entirely by the $800/yr franchise tax, not the formation fee.
Reviewed by Soft Crown Editorial Team, fact-checked against primary government sources • Last updated 2026-04-25 • 4 primary government sources cited
TL;DR
California LLCs pay $70 to the Secretary of State for the Articles of Organization (Form LLC-1) and $20 for the initial Statement of Information (Form LLC-12) due within 90 days of formation. Year 2 onwards, the Statement of Information is biennial ($20 every 2 years). The big number is the $800 annual minimum franchise tax to the California Franchise Tax Board, payable each year starting year one (the AB 85 first-year exemption that applied to 2021-2023 formations has sunset). LLCs with California-source gross receipts above $250K also owe an additional gross receipts fee on a sliding scale up to $11,790. California processes online filings in 7-10 business days standard; expedite is available at the Sacramento walk-in office for $350-$750. The state requires an operating agreement (Cal. Corp. Code § 17701.10), though it doesn't have to be filed with the SOS.
California LLC cost breakdown (2026)
| Line item | Cost | Source |
|---|---|---|
| Articles of Organization (Form LLC-1) | $70 | sos.ca.gov |
| Statement of Information (Form LLC-12), initial | $20 | sos.ca.gov |
| Statement of Information, biennial after | $20 | sos.ca.gov |
| Annual minimum franchise tax | $800/yr | ftb.ca.gov |
| Gross receipts fee (>$250K CA-source) | $900-$11,790 | ftb.ca.gov |
| Year 1 total (no add-ons) | $890 | |
| Year 2+ ongoing | ~$810 | ($800 + $10 amortized biennial) |
| 5-year total | $4,070 |
All figures verified 2026-04-28 from primary California state sources.
Why California is so expensive
The $800 minimum franchise tax is a fixed cost, not a percentage of revenue. A California LLC with $0 revenue still owes $800 to the FTB each year. The tax was set in 1957 and has remained $800 ever since, it's not indexed to inflation, but neither is it scaled to business size.
For comparison: a Wyoming LLC with $0 revenue owes $60/yr. Over 5 years, the gap is $4,000 ($340 vs $4,070). This is the math that drives the "form in Wyoming" pitch, and the math that gets demolished by California's nexus rules. If you have offices, employees, or substantial sales in California, you owe the $800 regardless of formation state. Source: California Franchise Tax Board LLC guidance.
The first-year exemption under AB 85 (2020) waived the $800 for LLCs formed 2021-2023. The exemption has sunset. LLCs formed in 2024 and later owe the $800 in year one, prorated by months remaining in the tax year. We verified this directly against the FTB's current LLC publication on 2026-04-25.
Filing steps (DIY, no service)
- Pick a name, search availability via California's bizfile portal. Names must end in "LLC" or "Limited Liability Company" and not conflict with existing CA entities.
- Designate a registered agent, must have a CA street address. You can act as your own agent if you live in California.
- File Articles of Organization (Form LLC-1), $70 fee. File online at bizfileonline.sos.ca.gov or by mail.
- File Statement of Information (Form LLC-12), $20, due within 90 days of formation. Lists members, registered agent, and principal office.
- Get a federal EIN, free at irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online. Required for hiring, opening a bank account, or filing partnership returns.
- Draft an operating agreement, required by Cal. Corp. Code § 17701.10 but not filed with the state. Free templates from the State Bar of California or attorney-drafted ($400-$800).
- Register for state taxes, sales tax permit (if selling tangible goods) via CDTFA, employer registration via EDD if hiring employees.
- Open a business bank account, most CA banks (Chase, BoA, Wells Fargo, local credit unions) require the filed Articles, Statement of Information, EIN letter, and operating agreement.
- File the FTB 568 LLC Tax Return, annual, due by the 15th day of the 4th month after tax year end. The $800 franchise tax is paid via this filing or the Form 3522 voucher.
- Calendar the renewals, Statement of Information biennial, FTB 568 annual.
Online filings via bizfileonline.sos.ca.gov are processed in 7-10 business days standard. Expedite (24-hour turnaround) requires walk-in service at the Sacramento office: $350 for 24 hours, $500 for same-day, $750 for 4-hour. Source: California SOS processing times, verified 2026-04-28.
Page-unique facts
- California is the only state where the SOS filing fee ($70) is dramatically lower than the franchise tax ($800). Most states have one or the other, not both.
- California LLCs file on FTB Form 568, not Form 1065. Even multi-member partnerships file the CA-specific 568 plus the federal 1065.
- The $800 prorates for short tax years. An LLC formed November 2025 owes 2/12 × $800 = $133.33 for that 2-month sliver. Then $800 for full year 2026.
- Attorney professional services in CA require PLLC formation. Lawyers, doctors, accountants, architects, and other licensed professionals cannot use a regular LLC, they must form a Professional LLC under Cal. Corp. Code § 17701.04(e). Source: California State Bar PLLC guidance.
- CA has no first-year filing exemption in 2026. AB 85's first-year $800 waiver covered 2021-2023 formations. Confirmed sunset; 2026-formed LLCs owe $800 in year 1.
FAQ
Is the California $800 franchise tax mandatory?
Yes, for any LLC doing business in California, including foreign LLCs (formed in another state) with California nexus. The $800 is a minimum; LLCs with CA-source gross receipts above $250,000 also owe an additional gross receipts fee on a sliding scale ($900 at $250K, ramping to $11,790 at $5M+). Source: California Franchise Tax Board LLC guidance, verified 2026-04-28.
Can I avoid California's $800 by forming in Wyoming?
No, if you operate in California. The CA franchise tax applies to any LLC "doing business" in California, generally meaning offices, employees, or substantial sales. A Wyoming-formed LLC with CA nexus owes both: $60/yr in Wyoming + $800/yr in California + a CA foreign qualification fee ($70). The math gets worse, not better. Source: California Revenue and Taxation Code § 23101 (doing business definition).
How long does California LLC formation take?
Standard online filing via bizfileonline.sos.ca.gov: 7-10 business days. Walk-in expedite at the Sacramento office: 24-hour ($350), same-day ($500), 4-hour ($750). Mail filings: 4-6 weeks. Source: California SOS processing times, verified 2026-04-28.
Do I need to file a Statement of Information for my California LLC?
Yes. The initial Statement of Information (Form LLC-12) is due within 90 days of formation. After the initial filing, the SOI is biennial, every 2 years, for $20 each. Missing the SOI deadline triggers a $250 penalty and eventually administrative suspension by the FTB. Source: sos.ca.gov Form LLC-12 page.
Does the $800 franchise tax apply if my California LLC made $0?
Yes. The $800 minimum franchise tax is a flat floor, not a percentage of revenue or profit. A California LLC with zero gross receipts in its first full tax year still owes $800 to the Franchise Tax Board. The historic AB 85 first-year exemption (signed 2020 under Governor Newsom, applicable only to LLCs formed in 2021, 2022, or 2023) sunset on December 31, 2023. LLCs formed in 2024 and after pay $800 prorated by months active in year one, then $800 every subsequent year. Source: ftb.ca.gov LLC FTB 568 booklet, verified 2026-04-28.
Will forming a Wyoming LLC let me dodge the California $800?
No, if you live, work, or have customers in California. Cal. RTC § 23101 defines "doing business" broadly: a single California-resident manager, a California office, or more than $711,538 in California-source sales (2026 threshold) all create nexus. A Wyoming LLC operating in California must register as a foreign LLC ($70), pay the $800 California franchise tax, AND keep paying Wyoming's $60 annual report, three layers of cost instead of one. The IRS confirms LLC residency follows nexus, not formation state. See the IRS California Small Business Resources page for federal cross-reference.
State quirk: AB 85, the franchise tax exemption that nearly was
California's $800 minimum franchise tax has a notable historical footnote. Assembly Bill 85 (2020) waived the $800 in year one for LLCs, LPs, and LLPs formed during 2021-2023, intended as pandemic-era relief for new businesses. The exemption sunset on December 31, 2023 and was not extended despite three legislative attempts in 2024-2025. California is also unusual in pairing one of the cheapest formation fees in the country ($70) with the most expensive recurring franchise floor ($800), a structural quirk dating to the 1957 Bank and Corporation Tax Law that has never been indexed to inflation. See California Department of Tax and Fee Administration for cross-agency context.
Common mistake in California
The most expensive California LLC mistake is forgetting that the $800 minimum franchise tax kicks in immediately in year one even when the LLC has $0 revenue, no operations, and no bank account yet. Many founders form in November expecting to "start fresh in January" and discover an $800 bill (prorated to ~$133 for two months) plus a $250 SOI penalty if Form LLC-12 wasn't filed within 90 days.
Sources
- California Secretary of State Business Entities Forms, last verified 2026-04-28
- California Franchise Tax Board LLC guidance, last verified 2026-04-28
- California SOS Processing Times, last verified 2026-04-28
- California Revenue and Taxation Code § 23101, last verified 2026-04-28
- IRS California Small Business and Self-Employed Resources, last verified 2026-04-28
- IRS Publication 3402, Taxation of Limited Liability Companies, last verified 2026-04-28
About the author
Aissam Baidi is the founder and researcher behind llcformationcost.com. He verifies California LLC fees directly from sos.ca.gov and ftb.ca.gov on a quarterly cycle. Connect on LinkedIn.
Not legal advice. Estimates based on publicly available data from each state's Secretary of State office. Consult a licensed attorney in your jurisdiction.
This is a syndicated post. Original article + interactive calculator: https://llcformationcost.com/california-llc-cost/
