Setting up a Limited Liability Corporation (LLC)

Limited Liability Corporation setup in the State of California

Online legal services like Nolo or Legal Zoom will charge you upwards of $70 to setup your LLC and that does not include the fees paid to the California Secretary of State. Although you may get an Operating Agreement out of the process you'll just be signing up for a process that will take weeks when you can have the basic framework in just a couple of days.

First, you need to understand why you are setting up an LLC. It may be for liability reasons, it may be because you have one or more partners, it may be for tax reasons, but whatever it is be sure you understand the pros and cons of an LLC.

Below are seven steps to creating your LLC. Please note that the links are to pages where you can make your actual submissions with the appropiate agencies. These pages also have a lot of information you should review to ensure you setup your business properly.

Step 1: Choose a business name and type.

Step 2: Register your LLC with the Secretary of State.

Step 3: File a Statement of Information.

Step 4: Apply for an EIN.

Step 5: Create an Operating Agreement (see file below).

Step 6: Open a bank account.

Step 7: Register with the Franchise Tax Board.

If you plan on selling retail or wholesale you may need a California's sellers permit. Click here for the California Department of Tax and Fee Administration website for information and links.