If you are looking to start a business in California, you may want to consider operating as a limited liability company (LLC). This guide will walk you through the entire process of setting up your LLC in California. We will cover everything from naming your company to filing taxes. Keep reading for all the information you need to get your business off the ground!
First, you need to choose a name for your LLC. The name must include the phrase limited liability company or LLC, and it must be distinguishable from any existing corporations, LLPs, or other entities registered in California. Additionally, the business cannot use words that imply government approval (e.g., FBI) or are restricted by law. Do a name search with the California Secretary of State to make sure your desired name is available. Generic names are acceptable such as “Auto Business LLC,” but you may run the risk of having the same name as some out-of-state LLC, which can cause a delay in obtaining an EIN number or cause confusion among vendors, customers, or anyone you do business with. Once you have chosen a name, you will need to register it with the California Secretary of State.
Next, you must file Articles of Organization with the state. This document outlines important details about your LLC. The articles include the LLC’s name, purpose of the LLC, address of its principal office, an agent for service of process, and the names of members or managers. It also includes information about how the LLC will be managed (member-managed or manager-managed) and other relevant details.
Once you have filed your Articles of Organization, you are legally recognized as an
After filing the Articles of Organization, you will need to create an Operating Agreement. This document outlines the ownership, management, and operational details of your LLC. It should include information such as profit and loss sharing, decision-making rights, fiduciary duties, capital contributions, dissolution procedures, and more. An attorney can help you write this agreement to ensure that it complies with California law.
You also need to obtain a business license before you can legally operate your LLC in California. Depending on the type of business and city, you might need to obtain additional licenses as well. Check with your local government office for more information.
In addition, be sure to check with the Internal Revenue Service (IRS) to ensure that you have all of your tax documents in order. You may need to obtain an Employer Identification Number (EIN) and apply for any necessary federal or state tax permits.
Finally, you should consider opening a business bank account. This will help keep your personal finances and business finances separate, and it will make filing taxes easier. Also mixing personal and business money can pierce the corporate veil, meaning that you may not be able to protect your personal assets in the event of a lawsuit.