Cost to Form a California LLC (2026 Breakdown)
California has one of the lowest formation fees ($70) but one of the highest ongoing costs ($800 annual franchise tax) of any US state. Understanding the full cost picture is essential before forming. For the full process, see our CA LLC guide.
Formation Costs (One-Time)
| Item | Cost | Notes |
|---|---|---|
| Articles of Organization (LLC-1) | $70 | Filed with Secretary of State |
| Statement of Information (LLC-12) | $20 | Due within 90 days of formation |
| Name reservation (optional) | $10 | 60 days |
| Certified copy (optional) | $5 | Official stamped copy |
| Counter/walk-in fee (optional) | $15 | Same-day processing in Sacramento/LA |
Minimum to form: $90 ($70 Articles + $20 SOI)
Ongoing Annual Costs
| Item | Cost | Frequency |
|---|---|---|
| Annual franchise tax (FTB) | $800 | Every year (minimum, regardless of revenue) |
| LLC fee (if CA income >$250K) | $900-$11,790 | Annual (on top of franchise tax) |
| Statement of Information (LLC-12) | $20 | Every 2 years |
| CA state income tax (members) | 1%-13.3% | Annual |
| Agent for service of process | $99/year (our service) | Annual |
The $800 Franchise Tax — Critical Details
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Get StartedWho owes it: Every LLC doing business in California, registered in California, or organized in California. No exceptions based on revenue, profit, or activity level.
First-year exemption: The first-year franchise tax exemption under AB 85 applied to LLCs formed in 2021-2023. For LLCs formed in 2024 or later, the $800 franchise tax is owed starting in the first taxable year (due by the 15th day of the 4th month after formation).
When it is due:
- First payment: by the 15th day of the 4th month after formation (if not exempt)
- Annual payment: by April 15 of each year (or the 15th day of the 4th month of your fiscal year)
- Filed with Form 3522 (LLC Tax Voucher) to the Franchise Tax Board
What happens if you do not pay: FTB assesses penalties and interest. After extended non-payment, the FTB can suspend your LLC (lose the right to transact business in CA, cannot sue in CA courts).
The LLC Fee (Additional, Revenue-Based)
On TOP of the $800 franchise tax, LLCs with California-source gross income exceeding $250,000 owe an additional fee:
| CA-Source Total Income | LLC Fee |
|---|---|
| $250,000 - $499,999 | $900 |
| $500,000 - $999,999 | $2,500 |
| $1,000,000 - $4,999,999 | $6,000 |
| $5,000,000+ | $11,790 |
Based on total income (gross revenue), NOT net profit. A business with $1M in revenue and $50K in profit still owes $6,000.
Total Cost: California vs. Other States
| State | Year 1 | Year 2+ Annual |
|---|---|---|
| California | $890+ ($70 + $800 franchise tax) | $920+ ($800 + SOI + agent) |
| Texas | $399 | $99 |
| Florida | $263 | $139 |
| Wyoming | $160 | $60 |
| New York | $550-$2,250 | $134+ |
| Delaware | $189 | $399 |
California analysis: Cheapest to form ($70) but most expensive annually ($800 minimum). Over 5 years: CA costs $4,000+ minimum vs. TX at $700. This is why many people consider forming in other states — but if you operate in CA, you owe the $800 regardless of where you form.
FAQ
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Get StartedCan I avoid the $800 by forming in another state?
Only if you truly have no California presence. If you "do business" in CA (office, employees, customers, property), you must register as a foreign LLC — which also triggers the $800 franchise tax. There is no escape if you operate in California.
Is the first-year exemption automatic?
The first-year exemption under AB 85 applied to LLCs formed in 2021, 2022, or 2023. For LLCs formed in 2024 or later, the $800 franchise tax is due in the first year (by the 15th day of the 4th month after formation). There is currently no first-year exemption for new formations.
Does the $800 apply even if my LLC loses money?
Yes. The franchise tax is a minimum tax, not based on profit. Even with $0 revenue and $50K in losses, you owe $800. This is one of the most criticized aspects of California's LLC taxation.
How do I stop the $800 from accruing?
Formally dissolve your LLC by: (1) filing Certificate of Dissolution with the SOS, and (2) filing final tax returns with the FTB and obtaining tax clearance. Simply letting your LLC lapse or going dormant does NOT stop the $800 from accruing — you must formally cancel.