Question

What is the total cost to form a Limited Liability Company (LLC) in California, including all state fees and additional services such as a registered agent or business license?

Answer 1

The total cost to form a Limited Liability Company (LLC) in California can vary based on several factors, including state fees, optional services, and other local requirements. Here’s a breakdown of the typical costs you might incur:

### 1. **State Fees:**
- **Articles of Organization (Form LLC-1):** $70 (one-time filing fee).
- **Statement of Information (Form LLC-12):** $20 (required within 90 days of filing LLC-1 and then every two years).

### 2. **Annual Franchise Tax:**
- **Minimum Franchise Tax:** $800 (due annually, even if the LLC is not actively conducting business).

### 3. **Registered Agent Services:**
If you choose to hire a registered agent (which is optional but often recommended), the cost can vary:
- **Registered Agent Services:** $100 to $300 annually, depending on the provider.

### 4. **Business Licenses and Permits:**
- The cost varies widely depending on your location and industry. City or county business licenses range from $50 to several hundred dollars. Check with your local jurisdiction for specific requirements.

### 5. **Operating Agreement:**
While not legally required, it is advisable to have an operating agreement. If you hire an attorney for this, it can cost between $100 to $1,000, depending on complexity.

### 6. **Other Costs:**
- **Employer Identification Number (EIN):** Free if obtained directly from the IRS, but some service providers may charge a fee for assistance.
- **Publication Fees:** Not applicable in California.
- **Professional Services:** Legal or accounting fees can add to your costs, depending on your specific needs.

### **Estimated Total:**
Considering the mandatory state fees and some common optional services, a rough estimate for the first year could range from about **$1,000 to $1,500** or more, depending on:
- Franchise taxes
- Registered agent fees
- Business license fees
- Professional services.

### **Annual Costs After Formation:**
- **Minimum Franchise Tax:** $800 (annually).
- **Registered Agent Services:** $100 to $300 (annually).
- **Business License Renewal Fees:** Varies by locality.

### **Conclusion:**
Overall, the total up-front costs for forming an LLC in California can start around **$1,000** and may exceed **$1,500** in the first year, with recurring annual costs mainly from the franchise tax and any ongoing service fees. It's always best to consult with a professional for specific advice tailored to your situation.