Forming a California Limited Liability Company

Picture of California DIY Corporation kit bundleIf you are forming a California limited liability company and need only basic help preparing the articles of LLC formation, the instructions below take you through the process step-by-step.

If you’d like a little more information than that, including deeper discussion of the advantages and drawbacks of a California LLC, sample forms, coverage of the procedures for getting an EIN for banking/tax purposes, and sample LLC operating agreements, you can purchase our kit (priced at $34.95) using the button below.

Purchase and Download View Cart

Before you buy the kit, though, check out these steps…

1. Check if the LLC name you want is available

Your first step in setting up an LLC is to check if the name you want to use is even available. You can do this in either of two ways: If you just want to quickly get a rough idea as to whether your desired name is available, you can use the California business search form at:

http://kepler.sos.ca.gov/

By entering the name you want to use in the search form, you’ll be able to see if there’s another business already using the name that you want. You can’t use a name, by the way, that’s the same or deceptively similar to another existing LLC’s name.

If you want to be more cautious, you can pay $10 and have the Secretary of State’s office check on the name’s availability and, if available, reserve the name for you. Refer to the name available web page at:

http://www.sos.ca.gov/business/be/name-availability.htm#reserving

for more information about checking these services.

Note: You may need to copy and then paste the above URL and those referenced in the paragraphs that follow into your web browser’s address box. The California Secretary of State’s website sometimes works a little clunkily.

2. Download Form LLC-1 from the California Secretary of State’s web site, and then print this form

The URL, or web page address, is as shown below. The LLC Articles of Organization are the first link in the list.

http://www.sos.ca.gov/business/be/forms.htm#llc

Alternatively, you may also be able to grab the form you need from this website address:

http://www.sos.ca.gov/business/llc/forms/llc-1.pdf

3. Identify the name you want to use for your new LLC

After you download and print the LLC-1 form (see Figure 1), you are ready to fill the form out.

To start, enter your business or investment name into box 1 of the LLC-1 form.  The name must include one of the phrases or acronyms, “Limited Liability Company,” “Ltd. Liability Co.,” “LLC,” or “L.L.C.” For example, all of the following names should be acceptable:

  • California Limited Liability Company
  • California Ltd. Liability Co.
  • California LLC
  • California L.L.C.

Tip: You should be able to name your LLC something close to what you want or need. Note, however, that California does have a handful of rules. A limited liability company name may not falsely imply governmental affiliation. LLC names must use the English alphabet or Arabic numerals (0, 1, 2, 3, 4, 5, 6, 7, 8, 9) or a combination of these characters, but no symbols except for the ampersand symbol (&) which can be used in place of the word “AND”. And, finally, note that the name of a limited liability company cannot include the words “bank,” “trust,” “trustee,” “incorporated,” “Inc.,” “corporation,” “corp.,” “insurer,” “insurance company” or any words suggesting that it is in the business of issuing policies of insurance and assuming insurance risks.

4. Give your name and address

California wants to know the name and contact information for a real person within the state of California that the state can contact if it has questions or concerns about an LLC’s operation. You can pay someone else to be this registered agent, but it is really easiest and cheapest to just be your own registered agent.

Accordingly, enter your address into box 3 and your name and California address into box 4.

5. Indicate how your LLC will be managed

LLCs can be managed either by all of their owners, called “members,” or they can be managed by only one or some of their members, who are in this case called “managers” or “manager-members.” To indicate how your LLC will be managed, mark the appropriate checkbox in box 5: One Manager, More Than One Manager, or All Limited Liability Company Members.

Note: If you have multiple members or managers, you will absolutely want to have an attorney draft an operating agreement. This operating agreement should describe who the manager is or who the managers are if you are setting up a manager-managed LLC. If you are a single-member LLC, you should probably also have an operating agreement because having an operating agreement and honoring its terms improves your liability protection. We have included a sample operating agreement with the kit.

6. Sign and date the Articles of Organization

Sign the articles of organization document at the bottom of the page. Note that you need to both sign the document and print your name.

7. Mail in the application

After you complete the Articles of Organization form, mail the completed form and a check for $70 to:

Secretary of State
Business Entities
P.O. Box 944228
Sacramento CA 94244-2280

Processing lead times vary, but in general, it takes several weeks to get your LLC certificate back from the Secretary of State’s office. (You can look up the date for which they are processing documents received from the Secretary of State’s web site at http://www.sos.ca.gov/business/be/processing-times.htm.)