How much does it cost to start a business in California?

Doing it yourself, expect about $870 in year one — that's the California LLC filing fee and the unavoidable state charges. With a registered agent service and a paid operating agreement it's closer to $1170. Here's every line item, and what you can skip. California's $800 minimum annual franchise tax applies to almost every LLC, even with no income.

Year one (DIY)
~$870
Year one (with help)
~$1170
Ongoing / year
~$935
EIN
free
  1. California LLC filing fee — $70

    The one required government charge to create the LLC — filing the Articles of Organization with California. Processing is 8 business days online. File directly with the state; a "filing service" just adds a markup on top of this.

    California — file directly

  2. Registered agent — $0–$150/yr

    $0 if you're your own agent (you need a physical California street address and to be around during business hours). A service runs about $100–$150/year and keeps your home address off the public record.

  3. EIN (federal tax ID) — $0

    Free from the IRS in about 10 minutes online. Anyone charging you for an EIN is reselling a free government service.

    IRS — apply free

  4. Operating agreement — $0–$100

    Free with a solid template (you keep it, you don't file it). A lawyer or a formation upsell charges $100+ for the same single-member document.

  5. Franchise tax (minimum $800/yr) — $800/yr

    California's $800 minimum annual franchise tax to the FTB applies to almost every LLC, even with no income. It's separate from the biennial Statement of Information and the first payment is due by the 15th day of the 4th month after formation.

    Official site

  6. Ongoing California report — $20 / biennial

    A biennial filing — Statement of Information; plus $800 minimum annual franchise tax to the FTB. Miss it and the state can administratively dissolve your LLC.

    California — report

  7. Local business license — $0–$150

    Many cities and counties require a general business or occupational license (often $50–$150/year); some have none. This is separate from the state and depends on where you operate.

    California — licensing

  8. Business bank account — $0–$15/mo

    Plenty of banks and credit unions offer free small-business checking. Keep business and personal money fully separate — it's what makes the LLC's liability shield hold up.

Get this as a personalized plan

FirstBearing turns this into a step-by-step roadmap for your exact business and city — with the right forms, the official links, and one next step every day. $99/month, cancel anytime.

Build my plan

Frequently asked

What's the cheapest way to start a business in California?

Register as a sole proprietor (no state filing, $0) and get a free EIN. The trade-off is no liability protection — your personal assets are exposed. The cheapest way to get that protection is a DIY LLC: about $870 in year one, filing directly with the state and acting as your own registered agent.

How much is an LLC in California?

The state charges $70 to file. After that, budget roughly $935/year ongoing — the California report plus a registered agent if you keep one. An EIN and operating agreement can both be $0.

Do I have to pay LegalZoom or a filing service?

No. Every required step — the state filing, the EIN, the operating agreement — you can do yourself for the government fee alone. Filing services bundle a markup onto the same $$70 state fee. FirstBearing gives you the filled-in forms and the official links so you file direct.

What ongoing costs should I expect in California?

About $935/year: California's report fee, a registered agent renewal if you use a service (~$125), and any local business license. That's before taxes on what you actually earn.

Is there a fee to get an EIN in California?

No. The EIN comes from the IRS, not the state, and it's free. Apply directly at IRS.gov — never pay a third-party site for one.

Official sources

Fees and timelines are commonly-cited figures last reviewed 2025-06 and can change — always confirm on the official site. This is educational information, not legal or tax advice.

Related

AI-generated guidance is for educational purposes only and is not legal, tax, or investment advice. Disclosures · Trust center