To register, incorporate, or organize an LLC in California I must follow these steps:
-First I have to file Articles of Organization (Form LLC-1) before the Secretary of State. Here I name the company and the company's addresses, appoint the Registered Agent, and some other related information.
The registered agent can be a member of the LLC or an individual with an address in the State, a corporation with an address in the State, or a professional Agent.
-Statement of Information (Form LLC-12). I have to file the SOI within 90 days after the AOF approval. Here I report who are the members of my LLC, report the CEO (if any), name the nature of the business. My LLC has to file this Statement each year.
-Draft the Operating Agreement. I don't have to file this Operating Agreement with the SOS but it must be on my records.
-Get the EIN. If my LLC is not considered a partnership, doesn't have employees, won't open a bank account, I might not need to get an EIN.
- Pay $800 Franchise Tax with the California Franchise Tax Board by filling Form 3522 (LLC tax voucher). “The annual LLC tax is due and payable by the 15th day of the 4th month after the beginning of the LLC’s taxable year (fiscal year) or April 15th (calendar year)”. I don't have to pay the Franchise Tax at the moment of incorporation.
- I have to file and pay Form 3536 (Estimated Fee for LLCs) only if my LLC has over $250,000 in gross annual receipts (total revenue).
- Depending on my LLC business type and location, my LLC will need to obtain a license/permit.
*I can organize my LLC myself, or I could hire an Organizer to file these forms on my behalf before the Secretary of State to avoid making mistakes.
*The information contained in the Forms filed with the SOS is public record. If I hire an Organizer and Registered Agent my name won't show on those boxes.
Total Incorporation State Fees and Taxes :
Article of Organization $70.
Statement of Information $20.
Franchise Tax $80.
Registered Agent (if necessary only) -/+ $50.
I would only register my LLC in California if I carry business or hold real estate assets in California, otherwise, I would incorporate it in another State that doesn't tax income, and the "franchise tax" is much lower.
About the author: Jean Franco Fernández Clark. Corporate and International Tax Lawyer from Nicaragua, Central America. Speaks English, Spanish, French, Italian, Russian. 学习普通话
Disclaimer: Nothing in this article shall be considered legal, financial, or tax advice. If you wish to obtain advice you should address a licensed tax consultant or attorney. The publication of this article is for information purposes only and the content in this article comes from personal experiences and it is not by any means a legal or tax advice. Information may not be updated or correct.