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
- EIN: free from the IRS.
- Seller's permit: if you sell or lease goods, get one from the California Department of Tax and Fee Administration.
- Employer account: if you hire, register with the Employment Development Department.
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.