How to Start an LLC in California

Starting an LLC in California is certainly no small feat. It s a complex multi-step procedure that takes a lot of dedication to detail and an abundance of perseverance. In order to keep things simple, going through your paperwork as quickly as possible will focus on your first priority – the Limited Liability Company, or simply an LLC. Once you understand exactly what an LLC is and why it may be right for your particular needs, the next logical step is to learn how to start an LLC in California.

• One important thing to understand about how to start an LLC in California is that you have to choose the name. Unlike most other states, starting a business as an LLC in California requires you to select a business name with a specific purpose. You can’t pick any name your like, so make sure to choose one that is easy to remember and easy for others to use as well. There are a few other considerations to think about here. One important thing to note is that all business names require a business name availability.
• The next step to take when learning how to start an LLC in California is to select a unique business structure. The types of businesses you can start vary, but there are a few options that are more common than others. For instance, most businesses are incorporated as a sole proprietorship, which makes complete tax and financial privacy and protection for the owners. Another popular option for a startup is to incorporate as a corporation, which has greater advantages when it comes to asset protection and privacy rights. A limited liability corporation also has the advantage of making more economic and efficient use of available tax brackets, but it requires greater legal name availability and complexity in the formation process.
• When you have chosen the structure you will use for your business, you must decide on how to incorporate. One option is to select a qualified individual to serve as the Secretary of the LLC – which costs no fee. You will then file a California Limited Liability Company tax return. You must pay the fees required by the Secretary of the LLC, which is generally due by the end of the month in which you file. If your LLC has one single member, this process is much simpler, as only that single member will be responsible for paying the Secretary of the LLC’s filing fees.
• Once you have paid the necessary fees and filed all of the necessary paperwork, you will be asked to create your unique business identification number (EIN). The state government will assign you a California Identification Number, which is also called a business license. This identification number should be provided to the IRS when filing your personal federal tax return. Filing a separate federal income tax return, however, requires a social security number.

The next thing you need to know is who will be paying your California payroll taxes. The majority of small businesses will be operated by one person, although there are some exceptions. If you elect to hire a partner or employees, they will not be required to file a form with the California Franchise Tax Board, (although they may be required to register) unless you elect to include their Social Security Number on the EIN. This is also true if your business consists of a rental facility. If the majority of your business is conducted by one person, each employee will be required to complete and sign an EIN and pay their own payroll taxes.