Business owners can limit personal liability by creating separate legal entities for their companies. Many small business owners appreciate the asset protection, tax advantages and minimal operational requirements of a limited liability company.
These are the steps to establish an LLC in California.
Choose a distinctive LLC name
The name of an LLC must be unique among California businesses. Companies should search the state business registration database to make sure they have a name that distinguishes them from the competition. It is also smart to check the availability of a domain name before officially naming an LLC.
Name a registered agent
The business must choose a California resident or professional firm registered to do business in the state for this role. The registered agent agrees to receive service of process and other official documents on the LLC’s behalf. A business owner or employee can serve as the company’s registered agent.
Submit the required documents
The LLC operating agreement is a legal document that describes the membership stakes, responsibilities and roles of LLC owners, legally known as members. It should also detail the operating procedures of the company, such as the process for resolving disagreements.
Along with the operating agreement, an LLC application must include Articles of Incorporation, submitted to the Secretary of State either in person, online or through the mail. This form carries a $70 fee.
After California accepts an LLC application, the newly established company has 90 days to submit its Initial Statement of Information on state Form LLC-12. The LLC must adhere to all state requirements to remain active and avoid dissolution.