How to Start an LLC in California in 2026 (Step-by-Step)

Hey, my name is Dan and in this video I'll show you exactly how to start an LLC in California. I'll walk you through every single step so that you feel confident you aren't making mistakes along the way. By the end of this video, you'll have clear expectations of what you need to do at each step, what's required from you, and what your California LLC formation will cost. To make the whole process as straightforward and as easy as possible, we're going to use a registered agent service to handle the filing. It's the service that I would use if I were starting a California LLC today and you'll see exactly why it's a great option when we get to that step. But let's start with step one, choosing your LLC name. Your LLC name needs to be unique in the state of California. That means no other active business registered in California can have that same name or something too similar to it. If you submit a name that's already taken or too close to an existing one, your file can be rejected and the state filing fee is non-refundable, so it's worth checking on this before you do anything else. California also has a few naming rules that you need to follow. The most important one is that your name has to end with an approved designator. That means you need to include limited liability company or an abbreviation like LLC or limited liability co. at the end of your name. Most people just go with LLC and that's perfectly fine. You'll also want to avoid words that suggest your business is a government agency or financial institution, things like agency, commission, bureau, bank, or trust. If you include restricted words like these, your filing can be rejected. Once you have a name in mind, you need to check that it's actually available. In California, you can do this through the California Secretary of State website. The official tool is called BizFile online and I'll put the link in the description. It's completely free to use, just type in your desired name into the search and check that nothing comes up that's too similar or the same. If you see a close match, you want to pick a different name before moving forward. While you're at it, do a quick brand check. Search for your business as a domain name, and check the major social media platforms, too. It's fine if the exact match isn't available everywhere. You can usually add a small variation to the social handles, but you want to make sure that the name works for your brand before you lock it in. Finally, do a quick trademark search. You can do that on the USPTO, or the United States Patent and Trademark Office database, and search your name there. You don't need a trademark to form an LLC, but if someone else has already trademarked a similar name, you could run into legal issues down the road. I'll link that USPTO search tool in the description. It only takes a few minutes, and it's worth doing before you commit to a name. Once you have your name sorted, it's time for step two, choosing a registered agent. A registered agent is a person or company that receives official mail on behalf of your LLC. That includes things like legal notices, government letters, and service of process, which is the formal if you were ever sued. Every LLC in California is required to have a registered agent. In California, your registered agent needs to have a physical street address in the state. A PO box won't work, and they need to be available during normal business hours to receive documents. You have a couple of options here. You can be your own registered agent, which is free, but the trade-off is that your name and home address can become part of the public record, and you have to personally be available during business hours to receive documents. It'll also take more time and effort to file. The other option is to use a registered agent service, which handles all of this for you. For most people, using a service just makes more sense. It keeps your personal address off of public records. You don't have to worry about being home to receive any documents, and it keeps everything organized in one place. It's also not very expensive, usually well worth handling everything correctly so that you don't have to worry about it. The service that I recommend is Northwest Registered Agent. Their basic package is $39. It includes the first year of registered agent service free, and they use their own California address. So, your home address stays off public records. Their support is US-based. They scan your mail digitally, and they'll remind you of deadlines that are coming up. Step three is to file your formation paperwork. This is the step that actually creates your LLC in the state of California, and I'll walk you through that now, step by step, using Northwest Registered Agent. To join me on this page, and to get the best available deal with Northwest, go to the link on the screen, or get here by clicking the link that you can find in the description below. Once you're on this page, select California as your state, >> [music] >> and then click get started. If you're not quite ready to start the filing yet, that's completely fine. Just follow along, and you can come back to the link whenever you're ready. When you land on the order tab, you'll see everything that's included with your formation service. You get one year of registered agent service for free, a free business address and mail scanning, a free domain, website, email, and phone line, free brand protection, and renewal alerts and filing service enrollment. Northwest calls the domain, website, email, and phone line their business identity features. They're free forever at the starting level, and if you need to, you can upgrade to get paid versions as your business grows. The entity type is already set to LLC, which is what we're forming today. You'll see options for corporation and nonprofit, but those don't apply here, so just leave LLC selected. And the jurisdiction is already set to California. You'll see the California filing fee here, $90 for standard processing. That's the state fee, not a Northwest charge. You would pay that regardless of how you file. Even if you wanted to be your own registered agent and handle everything yourself, you're still paying this fee to the state of California. Standard processing takes around 3 days, which is pretty quick. But if you need it faster, there's also an expedited option that processes in 1 day for $440. The Northwest basic package is $39, which you can see on the right side of the screen. That's their flat service fee on top of the state fee. You can see the rest of your included items here, and when you're ready, click continue. Now we're on the company tab. This is where you enter your company name. Go ahead and enter your LLC name in the company name field. You'll notice there's a separate designated drop-down right next to it. The most common one is already selected, so I would go with that. Below that, you'll see a preview showing exactly how your business name will appear on state records. If your name isn't available, Northwest will guide you through some options. I'll be using Business Tutorial Academy LLC. Once you're done, click continue. Now we're on the business details tab. You'll see a business purpose field here. Just enter a short description of what your LLC does. One or two sentences is all you need. Keep it simple and straightforward. For example, I'll use something like creation and publication of educational content, tutorials, and online courses for business and entrepreneurship. For both the physical address and the mailing address, you'll see that these are already set to Northwest's registered agent address. And that's exactly what we want. This is one of the real benefits of using Northwest. If you click the blue question marks, they explain using their address keeps your personal information off public records. I would recommend keeping both of these to our registered agent address. Next, if you have a business attorney, you can switch this to yes, and then enter your attorney's email. If you don't, just leave this as no. Once you're done, click continue. That brings you to the account tab. This is where you'll create your login for Northwest. Enter your your name, then your last name, and then your phone number. Northwest uses that for two-factor authentication, and that helps keep your account secure. Then enter your email address and create a strong password. Make sure it's something secure that you haven't used elsewhere, and save it somewhere safe. Click continue when you're done. Next is the management tab. Here you'll choose your management type. Member managed is already selected, and for most people, that's the right choice. If you click the tool tip, it explains the difference. Member managed means the owners make all the decisions themselves. Manager managed is for situations where the owner is not involved in day-to-day operations, and wants to hire a manager to make business decisions. If you're not sure, leave this on member managed. Below that, you'll see member one. Enter your first name and last name here. The address is set to Northwest's registered agent address, which is what we want. If your LLC has more than one owner, click add member, and then enter member two details the same way we've done before. When you're done, click continue. Next, you're on the recommended tab, and this is actually where we handle step four of setting up your LLC, getting your employer identification number, or EIN. You'll see tax ID as the first option here. That's your EIN. Your EIN is basically your business's social security number. You'll need it to open a business bank account, file your taxes, and hire employees if you ever need to. For $50, Northwest will handle all the IRS paperwork for you, and your EIN will show up directly in your Northwest account once it's ready. If you prefer to save the $50, you can get your EIN directly from the IRS for free at irs.gov. Just keep in mind that you'll have to wait until your California LLC is officially approved before you can apply yourself. If you want to keep things moving and have Northwest handle it, the $50 is worth it. I have done this myself in the past, but for my next LLC, I plan to include it here. Otherwise, skip this and apply on the IRS website once your approval comes through. The next option is the S Corp election with the IRS. This doesn't mean you're forming a corporation. You're still forming an LLC. This is purely a tax election that changes how the IRS taxes your business. If you're not sure whether this makes sense for you, skip it for now. You can always make this election later, and it's really a conversation to have with a CPA once your business is up and running. We'll come back to this in step seven. Next is premium mail service. This is different from your registered agent service. It's for all of your regular business mail. If you want a unique business address in a real commercial building, and you'd like Northwest to handle all of your incoming mail, this is the option for you. It's not something everyone needs, especially if you already have a good mail setup, but it's worth knowing that it's available. Toggle it on to explore the options, and leave it off if you don't need it. I've linked their California mail forwarding page in the description below with more details. If you want to protect your brand name or logo, Northwest offers a trademark filing service for $599. It's not required to form your LLC, but if you're building a real brand, it's worth considering. You can skip this today and come back to it later. The last option is DBA trade name filing, also called doing business as. This lets your LLC operate publicly under a different name than your legal LLC name. If your brand name and your LLC name are the same, you don't need this. If you want to do business under a different name without setting up an entirely new business, you can add it here. One thing that's unique to California, if you enable it and then click the tooltip next to local jurisdiction, you'll see that California requires the jurisdiction to match the principal business address on file with the Secretary of State. Since we're using Northwest's business address, that puts us in Sacramento County, which is what we would want to select here. Northwest's fee for the DBA is $125, and Sacramento County adds an $80 processing fee, bringing the total for this filing up to 205. If you use a different county, keep in mind that each county sets its own processing fee. So, your total here may differ. If you don't need a DBA, just leave this off and skip it. And if you're not sure about any of these right now, don't worry. As you can see in the good to know section at the bottom, you can add or cancel any of these services later from within your account. When you're ready, click continue. Now you're on the payment tab. Enter your payment details and billing address. Then before you submit, take a look at the order summary on the right side of the screen. You'll see the Northwest Basic Package, the California state filing fee, and any of the add-ons that you've selected. Make sure everything looks right, and then click submit order. After your payment goes through, you'll be taken into your Northwest account. From there, you can track the status of your filing and see an estimated completion date. California standard processing typically takes around 3 days. So, keep an eye on your email from Northwest for updates. Once you've filed for your EIN and submitted your order, let's move on to step five, creating your operating agreement. California actually requires LLC to have one. The good news is that you don't need to file it with the state. You just need to have it on hand with your business records. Even though it's required, it's also genuinely useful. Without one, California default rules can govern your LLC. Rules that might not match how you want to run your business. A written operating agreement puts ownership, decision-making, and profit distribution all in writing. It also helps protect your liability status if your LLC is ever challenged in court, even if you're the only member. It's worth having. Northwest provides free operating agreement templates inside of your account. I'll also link one down in the description below. Download it, fill in your details, sign it, and keep it with your business records. You don't file it with the state. It's just an internal document for your LLC. Next is step six, opening a business bank account. Once you have your operating agreement ready, you'll have everything you need to open one. Most banks will ask for your EIN and your operating agreement when you apply. So, it's good to have both before you go. The goal is simple. Keep your business money completely separate from your personal money. Once your LLC is active, all business income should go into your business account and all business expenses should come out of it. One of the main benefits of an LLC is that your personal assets are protected if something goes wrong with the business. But, if your personal and your business money are mixed together, that protection can go away. A court can decide that your LLC isn't truly a separate entity and your personal assets, like your home, your car, your savings, could all be at risk. Keep things separate from day one. You'll also need your EIN from step four before you can open a business bank account. Banks require it to verify your business. Once your account is open, use a business debit or credit card for all of those business purchases. Save your receipts as you go and set up a basic bookkeeping routine. Even a simple spreadsheet works to start. Review it once a month and you'll have clean records that make tax time much easier. I've also linked my recommended business bank account in the description down below. Take a look and see if it's the right fit for your business. The last step is step seven, keeping your LLC in good standing. Forming the LLC is just the beginning. There are ongoing obligations that you need to stay on top of and it helps to know what's coming in year one and beyond so that you aren't surprised. This is also where Northwest Registered Agent can really pay off. Let me walk you through what California requires. California requires all LLCs to pay an $800 annual franchise tax every single year. Unlike some states, this isn't based on your revenue. Every LLC pays it regardless of how much money your business makes, even if it's nothing at all. The first payment is due on the 15th day of the fourth month after your LLC is formed. So, if you form your LLC in January, your first payment is due in April, which can come up fast. And if your LLC makes over $250,000 a year, California also charges an additional fee on top of that 800, starting at 900 and scaling up from there, depending on your income level. California also requires you to file a statement of information within 90 days of your LLC being approved. The filing fee is $20, and if you miss the window, California adds a $250 late fee automatically. After that initial filing, you'll need to file it again every 2 years to keep your information up to date. Northwest will send you reminders ahead of these deadlines, and if you stay enrolled in their compliance service, they can handle the filings for you. And before we wrap up, I want to give you a couple of recommendations on the professional side. I'm not a lawyer, and I'm not an accountant. What I'm sharing here is information specific to California, but not legal or tax advice. Your situation might be different, so please treat this video as a great starting point, but not a substitute for professional guidance if you need it. With that said, I do recommend connecting with a local business attorney at some point, especially for two things. First, depending on what your business does and where it operates in California, you may need specific licenses or permits at the local, state, or federal level. A business attorney can help you figure out exactly what applies to your situation. Second, if you want extra confidence in your operating agreement, especially if you have multiple members, having an attorney review it is a smart move. The Northwest template is a solid starting point, but a lawyer can make sure that it holds up if it's ever tested. On the tax side, I'd recommend finding a CPA or tax advisor early on, even if your business is just getting started. One of the things that they can help you think through is whether that S Corp election actually makes sense down the road. Once your income reaches a certain level, this election can reduce your self-employment tax burden, but it also comes with additional responsibilities like payroll, stricter bookkeeping, and more reporting. It's not the right move for everyone, and the timing can matter. This is a conversation that you should have with a professional rather than a decision that you should make on your own. A CPA can also help you set up quarterly estimated tax payments. That way, you're not hit with a surprise bill at the end of the year, and they can get you started with a bookkeeping system that keeps everything clean as your business grows. And that's everything you need to know about starting an LLC in California. If you've only followed along so far, and now you're ready to get started, remember to use the link in the description to get the best available price with Northwest Registered Agent. Thanks for watching, congrats on starting your business, and I'll see you in the next video.