How to Start an LLC in California for Free

Looking to launch a California LLC without spending a dime? Spoiler alert: You can't, but you can slash some of the costs. Read on to learn more.

At one point, you could actually start an LLC in California for free. But that's not the case anymore.

While you can't skirt mandatory filing fees these days, you can still keep your overall formation costs surprisingly low.

Form Your LLC at $0 + State Filing Fees

Form your business at $0, just pay the state filing fees, with the Basic package. The Basic package includes:

• Articles of organization
• Name check service
• Digital welcome packet
• Initial phone consultations with specialists about business insurance and taxes

Form Your LLC

Start Your LLC for $0 - Just Pay State Fees

• Check business name availability
• LLC formation processing within 14 business days
• Invoicing and bookkeeping (30-day trial)
• Business coaching program (includes tax, compliance and marketing)

Get Deal

Starter - $0 + State Filing Fees

• Includes 1 optional free year of Worry-Free Compliance that renews at $199/year
• Standard filing speed
• 100% accuracy guaranteed
• Other services are available with additional costs

Learn More

How much is the LLC fee in California?

There's a mandatory $70 fee to file the Articles of Organization of your Limited Liability Company with the Secretary of State of California. Plus, you have to shell out $20 for the Statement of Information, which is due within 90 days of forming your LLC.

Besides these basic LLC filing fees, there could be other potential expenses. However, there are ways to minimize costs throughout the process. Read on to learn how.

DIY LLC Formation

California LLC fees can be overwhelming—and costly! But with strategic planning (and a little elbow grease), you can limit baseline costs to a minimum of $90.

Since most paperwork and processes can quickly run you up to hundreds, if not thousands, of dollars, see which ones you can work around to reduce expenses.

Verify your LLC Name's availability

Head straight to the California Secretary of State's Business Search to check if the name you have in mind is taken—for free.

If you can submit the filing paperwork quickly, you don't even need to pay the $10 name reservation fee. Your LLC name is automatically locked upon approval of the Articles of Organization filing. This can save time and money while ensuring your chosen name is secured.

Be your own registered agent

California requires LLCs to have a registered agent. This is a person or entity designated to receive legal documents or state notices on behalf of your LLC.

You can eliminate recurring registered agent fees (which typically range from $50 to $300 annually) by serving as your own agent.

Keep in mind you'll need to be available during business hours at a physical California address to ensure you don't miss important documents or legal notices.

File your Articles of Organization Directly With the State

You can file your Articles of Organization yourself through the California Secretary of State website. You'll need to pay the $70 filing fee with your submission. Standard online filing processing for California usually takes 8 business days.

Tip: Give yourself a 3-4 week buffer, especially if filing during the peak months of December through February. Better yet, wait until the post-tax season if you can (May through summer), when processing times are typically faster.

By planning ahead, you can avoid costly expedited processing fees. They start at $350 for 24-hour filing (excluding weekends and holidays) and significantly increase for faster turnarounds.

File your Statement of Information on time

In California, the Statement of Information contains the LLC's up-to-date name, contact details, members/managers, type of business, CEO (if applicable), and registered agent.

It's due within 90 days of your LLC formation and costs $20. But you still get an additional 60-day grace period before getting charged a $250 late fee. Avoid that unnecessary expense by filing on time.

Draft your Operating Agreement

California requires all LLCs to have an Operating Agreement, but you don't have to file it with the state—you've just got to have one.

Your operating agreement doesn't have to be complex; a one-pager works fine. Especially if you're a single-member LLC. No need for fancy clauses unless you're scaling big.

You can just draft it using free templates available online instead of hiring a lawyer, which could easily cost $1,000 or more for a custom version.

What if you could get help for free? Keep reading.

Free California LLC Formation Service

Several online LLC services offer free LLC formation in California. While you’ll still need to pay the required state filing fee, these companies waive their own preparation fees. This helps you launch your business without extra costs.

It's a convenient option if you want to save time, avoid paperwork mistakes, and get peace of mind.

Form Your LLC at $0 + State Filing Fees

Form your business at $0, just pay the state filing fees, with the Basic package. The Basic package includes:

• Articles of organization
• Name check service
• Digital welcome packet
• Initial phone consultations with specialists about business insurance and taxes

Form Your LLC

Start Your LLC for $0 - Just Pay State Fees

• Check business name availability
• LLC formation processing within 14 business days
• Invoicing and bookkeeping (30-day trial)
• Business coaching program (includes tax, compliance and marketing)

Get Deal

Starter - $0 + State Filing Fees

• Includes 1 optional free year of Worry-Free Compliance that renews at $199/year
• Standard filing speed
• 100% accuracy guaranteed
• Other services are available with additional costs

Learn More

ZenBusiness

ZenBusiness has a free Starter plan that cover the basic filing of your California LLC formation documents.

Besides checking your LLC name and submitting the Articles of Organization, ZenBusiness offers a safety net with its 100% accuracy guarantee. This gives you extra protection against costly filing errors.

By selecting a free plan and handling some steps yourself, you can take advantage of ZenBusiness' professional support while keeping your total costs low.

Tailor Brands

Tailor Brands offers a Lite plan that includes a generous set of LLC formation services for free, which include:

• Professional preparation and filing of your Articles of Organization
  
• 30-day complimentary trial for invoicing and bookkeeping services
  
• Free business coaching program

With these services, Tailor Brands Lite can provide a solid foundation for your new LLC without the premium price.

Inc Authority

Inc Authority is another LLC formation service with a free plan that's genuinely useful. It stands out with one year of complimentary registered agent services.

This comes in handy during that crucial first year. It lets you focus on building your business without worrying about missing important mail or legal notices.

The free package also includes valuable extras, such as:

• Digital storage for your startup documents
  
• Tax planning consultation to optimize your financial structure
  
• Business credit and funding analysis to support your growth strategy

Still have questions about California LLCs? Check out some of the answers by clicking the dropdowns in next section.

Other Steps After Forming a California LLC

Once the California Secretary of State approves your Articles of Organization, there are more things to do to get your business up and running while staying compliant with state rules.

Some LLC services, like ZenBusiness and Tailor Brands, offer add-ons or packages to help you manage an LLC in California. These will cost more annually, but the idea is to let other people do smaller tasks so you can focus on growing your business.

Alternatively, take note of the additional steps below that you need to do after forming an LLC in California.

1. Get an EIN
   An EIN, or Employer Identification Number, is a unique nine-digit number issued by the IRS to identify a business for tax purposes—kind of like a Social Security number, but for your company.

   You'll need an EIN if you plan to:
   

   • Hire employees
     
   • Open a business bank account
     
   • File federal or state business taxes
     
   • Apply for certain licenses or permits
     
   • Operate as a multi-member LLC or corporation
   Getting an EIN is free and easy. You can apply online through the IRS website, and in most cases, you'll get it immediately after submitting your application.

2. Draft an operating agreement
   California is one of five states that require businesses to create an operating agreement.^[3] You don't have to file it with the state, but a copy must be kept in the office where your LLC's records are.

   There are a lot of things an operating agreement can do for your California LLC and its members or managers. For example, it can dictate the roles and responsibilities of each member, how the LLC will be run, and how the profits and losses of the LLC will be distributed to each member.^[4]

   If you haven't created this before forming your LLC, draft one using the free templates found online or get an LLC formation package that includes a custom operating agreement.

   More than anything, an operating agreement is one of the best ways to set rules that work for your LLC instead of following California's default regulations—which may not always turn out in favor of your LLC.

3. Secure all necessary permits and licenses
   California has no general statewide license. However, chances are you will need at least one type. For example, a seller's permit if your LLC sells a physical product that is subject to sales tax. You can register online for a seller's permit for free.

   You can check out various government sites to make a list of all the permits and licenses applicable to your LLC. Alternatively, hire a California LLC service to do the work for you at an affordable price.

   ZenBusiness offers a Business License Report that identifies the licenses, permits, and registrations you need at the federal, state, county, and local levels for your business. Just submit details like your LLC's location, industry, and activities, and then you'll get a report typically within 1 to 3 days after ordering. The report includes application forms, estimated fees, and where to file them.

4. Open a business bank account
   The whole point of an LLC is to create a legal boundary between you and your business. If you mix personal and business finances—like using one bank account for both—a court could decide that your LLC isn't a real, separate entity.

   Also, having a separate business bank account keeps your income and expenses organized. It makes:
   

   • Filing taxes cleaner
     
   • Tracking deductions easier
     
   • Working with an accountant far less messy

   Trying to untangle business transactions from a personal bank account is a headache you don't want. Check out some of the best business bank accounts for California LLCs.

5. Create a business website
   It's very common for even brick and mortar LLCs to have a business website. You can use it for all sorts of things, from marketing to selling your products or services. In fact, over 2.5 million businesses in California sell through web-based stores in 2023.^[5]
   Tailor Brands' elite LLC formation package comes with a custom website/eCommerce store, free year of website domain, business logo, and even a social media post maker tool.

6. Purchase business insurance
   In a highly litigious state like California, you need business insurance to protect your company and yourself from financial risks that your LLC status alone can't fully shield you from.

   Also, some types of insurance are required by law, like workers' compensation for California LLCs that have at least one employee.

   Do due diligence before selecting an insurance provider.
   When shopping around for business insurance, consider the specific risks your LLC faces. Prioritize getting the right coverage for your specific needs and get quotes from multiple providers.

Why Should I Form an LLC in California?

The primary benefit of an LLC is personal asset protection. If your business in California gets sued or goes into debt, your personal assets are usually protected. That's a big deal because other business entity structures typically don't offer this.

In a high-risk legal environment like California, that protection alone can make the LLC structure well worth it. After all, the Golden State is still one of the most lawsuit-heavy states in the country. In 2023–24, over 4.8 million cases were filed with the Superior Courts alone.^[6]

That sheer volume of legal activity means even one unhappy customer, contract dispute, or workplace incident could turn into a costly court case. Forming an LLC creates a legal wall between your business and your personal life—so your home, savings, and other personal assets aren't automatically on the line.

FAQS

• How do I avoid the $800 tax in California LLC?

  While you can't escape California's annual tax, you can delay it by filing your LLC with 15 days or less left during a taxable year.

  So if you file on Dec. 17, 2025 and don't conduct any business through Dec. 31, 2025—you won't have to pay $800 for that year. Your first payment would then be due on April 15, 2026.

• What's the biggest benefit of an LLC?

  The biggest benefit of an LLC is protecting your personal assets. This legal structure creates a clear separation between your personal and business finances. It effectively shields your personal home, car, or investments from business debts and lawsuits.

  An LLC's liability protection is only effective if you keep your business and personal finances separate. Open a dedicated business bank account to avoid commingling funds.
  
  

• Does an LLC expire in California?

  In general, LLCs in California stay active indefinitely unless you choose to close it. But if you don't file your annual compliance report, you can lose your good standing and the state can even dissolve your LLC.

  Once dissolved, you can’t legally operate anymore, and your LLC name becomes available for others to claim.
  

• How long does it take to get an LLC in California?

  The California Secretary of State usually processes online filings of LLC formation documents within 8 business days, though this may vary depending on submission volume. You can check out real-time processing updates here.

• Do I have to pay taxes for an LLC in California if it has no income?

  Unfortunately, yes. California charges an annual franchise tax of $800/yr regardless of your LLC's revenue.^[7]

Bottom Line

Starting a California LLC for free isn't possible at this time. But if you're willing to take the DIY route or take advantage of free LLC formation plans, the savings can be substantial.

Ultimately, these cost-saving strategies allow you to preserve capital for critical business operations while still establishing legal protection for your entrepreneurial venture.

References