How Simple Is it to setup an LLC in California?

You might be wondering how simple it is to set up an LLC in California – well the short answer is it’s quite easy and simple to form an LLC as almost all of the paperwork can be filed online from your own home. TRUiC has just the guide on how to quickly, cost efficiently and easily set up your LLC in California while always adhering to state guidelines and laws. Below is an attempt to offer a more detailed account of the process of forming an LLC in California in order to always be compliant with state laws and take full advantage of the benefits that an LLC can offer your business.

 

Forming an LLC in California – Simple and Straightforward Guide

 

The process of setting up an LLC in California is simple, doesn’t have to cost a lot, and has substantial tax benefits. An LLC compared to a corporation is a much more simple business entity that provides limited liability protection to its members. Forming an LLC is an easy and fairly inexpensive process depending on if you will be setting it up on your own or using a professional formation service. Also there are no complex procedures needed to run an LLC, and there are quite a few tax benefits as the members avoid double taxation which is found in more complex business structures.

 

Name your LLC

 

The first step in the process is to find a Name for your LLC, apart from finding a name that suits your business you need to make sure that your name is available by checking with the California Secretary of State’s website. If your name is available you just need to register it online for free and you are all set. It might be a good idea to obtain a domain name of the same name when you form your LLC even if you won’t be creating a website for your business right away.

Appoint a Registered Agent

California requires you to appoint a registered agent which can be a professional service that is authorized as a registered agent in California or you can also do it yourself. A registered agent is in charge of receiving and filing your legal documents and needs to help keep your company active. A failure to stay compliant with your annual reporting requirements can result in problems and even the dissolution of the LLC. So it is important to keep documents up to date with the state which will help keep the LLC running smoothly.

 

California Articles of Organization

 

The articles of organization gives information about your LLC such as the names of the initial members and your address in the state of California where your LLC is located where you can officially accept documents. The cost is $70 and needs to be filed with the Secretary of State.

Initial Statement of Information

 

California law requires all LLCs to file with the Secretary of State a form LLC-12 every two years. Filing can be done online, in person or by mail and the process is quite easy and time efficient.

Operating Agreement

 

Its a document between the members of the LLC, how the LLC is going to operate, how profits are going to be distributed, what happens if new members are added, defining the roles of each member etc. By clearing defining and adhering to the terms of the Operating Agreement then you will be covered from any legal disputes that might arise.

 

Create an EIN

 

An EIN or Employer Identification Number is required by California State law and is basically the social security number of your LLC. You need to file one in order to open a bank account for your company and legally hire employees and are easily filed online or through the mail without any extra cost.

 

Lastly, you should keep in mind that in the State of California there is an Annual franchise tax of $800 if your LLCs annual revenue is less than 250k and a franchise fee of more than $800 if your annual revenue is higher than 250k.

 

That’s it you’re all set, you have formed your very own LLC.