California LLC Formation Package and Operating Agreement
A California LLC is inexpensive to file and expensive to keep. The Secretary of State charges $70 for the articles of organization, but every LLC owes an annual tax to the Franchise Tax Board whether or not it earns anything. As amended in 2026, the statute sets that tax at $400 for an LLC's first taxable year in 2027 through 2029, subject to a budget condition.
What California law does to this document
Formation by filing articles
An LLC is formed when the Secretary of State files its articles of organization on the Secretary's prescribed form. The articles must state the name, the street address of the initial principal office, the agent for service of process and whether the LLC is manager-managed. The statutory filing fee is $70.
Cal. Corp. Code § 17702.01; Cal. Gov. Code § 12190(b)Name and agent for service of process
The name must contain "limited liability company," "LLC" or "L.L.C." It may not include words such as "bank," "trust," "corporation" or "inc.," or words suggesting an insurance business. The LLC must continuously maintain an agent for service of process in California. The agent is either an individual who resides in the state or a corporation registered with the Secretary of State to act as agent.
Cal. Corp. Code §§ 17701.08, 17701.13Statement of Information
Every LLC must file a Statement of Information with the Secretary of State within 90 days after its articles are filed and every two years after that. The statutory fee is $20. There is no fee to file a change between the regular filings.
Cal. Corp. Code § 17702.09; Cal. Gov. Code § 12190(k)-(l)The annual LLC tax
An LLC that is organized in California or doing business here owes an annual tax equal to the minimum franchise tax, which is $800. It is due by the 15th day of the fourth month of the taxable year and continues until the LLC files a certificate of cancellation. The first-year exemption covered only LLCs organized from January 1, 2021 through December 31, 2023. As amended in 2026, section 17941(g)(2) sets the tax at $400 for an LLC's first taxable year, for taxable years beginning on or after January 1, 2027 and before January 1, 2030, and subdivision (g) states that it operates only in a taxable year for which a budget measure funds the Franchise Tax Board to administer it.
Cal. Rev. & Tax. Code §§ 17941(a)-(c), (g), 23153(d)The LLC fee on California income
On top of the annual tax, an LLC pays a fee based on total income from California sources. The fee is $900 at $250,000 of income, $2,500 at $500,000, $6,000 at $1,000,000 and $11,790 at $5,000,000 or more. Total income for this purpose starts from gross income, not net profit.
Cal. Rev. & Tax. Code § 17942The operating agreement
California recognizes an operating agreement that is oral, in a record or implied, and a sole member can have one. A written agreement is still the practical way to prove its terms. The agreement governs relations among members and managers, but it cannot eliminate the duty of loyalty, the duty of care or the obligation of good faith and fair dealing except as the statute allows.
Cal. Corp. Code §§ 17701.02(s), 17701.10Where people go wrong in California
- Forming a California LLC late in the year without accounting for an annual tax that is owed for each taxable year or part of a year.
- Missing the first Statement of Information, which is due within 90 days after the articles are filed.
- Filing the generator's Articles of Organization as drafted, when Corporations Code section 17702.01 requires articles on the Secretary of State's prescribed form, so the details have to be carried over to that form (Form LLC-1).
How the generator works
Articles of Organization plus a full Operating Agreement, adaptable to single-member or multi-member and member-managed or manager-managed. Answer a short interview and the draft assembles as you go, with California already set as the governing state. Download it as PDF or Word. No fee. No account.