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The following article was published in our article directory on August 27, 2012.
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Requirements for Forming a California LLC

Article Category: Legal

Author Name: John Pena

The LLC or limited liability company is one of the common types of business which are usually established in the state of California. This is no wonder though since there are a couple of benefits for forming a California LLC.

For one, this is way cheaper compared to filing for a corporation. Second, the owner and members of an LLC do not have personal liability for the debts of the company. That means in the event that the company is drowning in huge debts, most if not all of them will not be shouldered by the members and owner.

Pass-through taxation is another benefit. In essence, this means that the LLC is not required to pay the taxes for the profits incurred unless the latter are passed on to the individual owners of the company.

But before you become all too giddy about these benefits, you should also take note of the fact California incorporation to an LLC is not entirely a piece of cake. There are certain prerequisites that you have to provide.

1. Company name

For one, you should provide a unique name for your LLC. That means no other registered company should have identical name to that of your company. You can check this with the Secretary of State of California. You can go to their office personally. Or you can also check online in the office website.

If you have verified that the name is available but you still cannot file for actual registration, then you can just have that name reserved for a certain fee.

2. Articles of Incorporation

Another requirement for a California LLC is the Articles of Incorporation. This should provide the necessary details about the company. This includes the name, purpose, description, vision, registered agent for the service of process, type of business and a statement on the form of management of the company.

3. Operating Agreement

You will also have to come up with and file an Operating Agreement. This discusses the details regarding the rights and duties of the members and owner, distribution process for the income and profit of the LLC, record keeping of the finances of the company, obligations of the management, voting rights of the members and owner and provisions for the amendment or dissolution of the LLC.

4. Statement of Information

The Statement of Information should be filed within the next 90 days after the Articles of Incorporation has been submitted. This should include details like the names of the managers with the corresponding contact numbers, description of the main activity of the business, contact information for the registered agent and the office of the company.

5. Taxes and other fees

Finally, a California LLC should pay the necessary fees and taxes for the incorporation process. So far, the rate for the Articles of Incorporation is less than a hundred dollars. At least $800 must also be paid to the Franchise Tax Board on a annually.

Keywords: california llc, california incorporation

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