Storyhand Studio

Starting a business by state

How to start a business in California

California has more steps and higher yearly costs than most states, so it pays to know them before you file. The big one: every California LLC owes an $800 annual tax to the state, even in a year it makes nothing. Here's the order to do it in.

Fees and rules checked in October 2026. States change them, so confirm on the official site before you file.

1. Pick your business structure

Sole proprietor: no state filing to exist and no $800 LLC tax, but you are personally on the hook for business debts.

LLC: file Articles of Organization (Form LLC-1) with the California Secretary of State through its bizfile Online system. The filing fee is $70. Then, according to the Franchise Tax Board, every LLC doing business or organized in California pays an $800 annual tax until it's canceled, plus an extra LLC fee once income passes $250,000.

Because of the $800 tax, talk to an accountant before you form an LLC in California.

2. File your Statement of Information

California LLCs file a Statement of Information with the Secretary of State within 90 days of forming, then every two years. The fee is $20. It lists your address and managers, and it's easy to forget.

3. Check your name and file a fictitious business name

Search the Secretary of State's records for your name. If you'll use a name other than your legal name or your LLC's exact name, file a fictitious business name statement with the county clerk where your business is based. California also requires you to publish it in a local newspaper, so plan for that step.

4. Get your tax IDs and seller's permit

5. Get your city or county business license

Most California cities require a business license or business tax certificate, even for home businesses. Check your city's website, or your county if you're outside city limits. Licensed trades like contractors, cosmetologists and barbers also need a state license.

6. Open a business bank account

Bring your EIN, your filed Articles of Organization, and your fictitious business name statement if you use one.

Make it look like a real business

The paperwork makes you legal. It doesn't bring customers. Once you're registered in California, people still need to find you and trust you: a name and logo they remember, a website, a business email and a Google Business Profile. Then a plan for your first customers.

Questions

How much does it cost to start an LLC in California?

The Articles of Organization fee is $70 and the Statement of Information is $20. Every California LLC also owes an $800 annual tax to the Franchise Tax Board.

Do I have to pay the $800 California LLC tax?

Yes. According to the Franchise Tax Board, every LLC doing business or organized in California pays the $800 annual tax until it's canceled, even if it makes no money.

Do I need a business license in California?

Most cities and counties require a local business license or tax certificate, and many trades need a state license.

Where do I file a DBA in California?

With the county clerk where your business is based, as a fictitious business name statement, then you publish it in a local newspaper.

Keep reading