Form an LLC in California

A California LLC offers a level of liability protection that is similar to a corporation, but it is taxed differently. Domestic LLCs may be managed by one or more managers or can be managed by one or more of the members, as well. When starting an LLC, it is important to remember that an operating agreement among the members related to the affairs of the LLC and how business will be conducted is a requirement by the state. When we form an LLC in California, we are not required to file the operating agreement with the Secretary of State, but we must file the Articles of Organization. The operating agreement must be kept on file at the office of the LLC.

Q: How long does it take to form an LLC in California?
A: The California Secretary of State has notified us that it is taking them longer to form an LLC than it has in the past. This change is due to the budget crisis in California and a resulting reduction in the size of the staff in the Secretary of State office. As a result, we are now adding a Rush Fee to all California LLC orders to keep the turnaround time low. With the new change, we are able to provide approved LLCs in approximately one week.

Q: I am starting an LLC for the first time. What are the rules related to naming my LLC?
A: Choosing a name is truly the first step in starting an LLC and is one of the most important. The name you select:

• must contain, as the last words of the name, the words “limited liability company” or one of the following abbreviations: “LLC” or “L.L.C.”. The words limited and company may be abbreviated to “Ltd.” and “Co.”
• may contain the name of one or more of the members
• must clearly be distinguishable from the name of any other LLC registered in California

Must not contain the words any words that suggest it is in the business of issuing policies of insurance and assuming insurance risks, such as “bank”, “trust”, “trustee”, “incorporated”, “inc”, “corporation”, “insurer”, “insurance company”, etc.

EZonlineFiling.com allows you to select 3 names in order of preference when you place your order and we are available to assist you with your name selection, to make certain your online LLC filing goes smoothly.

Q: What is an Operating Agreement and can I set up an LLC without one?
A: An Operating Agreement is a formal document which spells out a wide variety of rules and regulations related to the governance of the LLC. This can cover everything from ownership percentages to rules on restrictions and/or prohibitions on the power of any or all members. California requires that you adopt an Operating Agreement when starting an LLC.

Q: Once I set up an LLC, am I finished or are there other things I need to do?
A: California requires that certain recurring responsibilities be met. Here are some of the most important.

• An annual report is due to the Secretary of State each year.
• Every LLC must keep accurate records and those records must be available for inspection.
• There is a minimum annual state franchise tax of $800 per year.