Creating your own company takes guts. You will have to be ready to face challenges and handle responsibilities. One of the first things you will have to think about is the structure of your business entity. If you are starting your business in California, you may have heard of the limited liability company (LLC) and have probably considered this structure. An LLC has a lot of advantages, especially when it comes to limiting personal liability. Given its hybrid nature that combines the advantages of other business structures, it is no wonder why more business owners choose it.
What To Do
Forming an LLC requires you to follow the laws in the state where you want to organize your company. Most states have pretty much the same basic requirements. However, you should research and find out what your state requires to ensure that you comply with the regulations.
If you are thinking of organizing your business in California, you need to file California Articles of Organization with the Secretary of State. To do this, you should use Form LLC-1. You can download it through their website and submit it by mail or in person.
If you opt to send it by mail, use the following mailing address:
California Secretary of State
If you decide to hand-deliver it to their office, use the following address:
Secretary of State
1500 11th Street
Sacramento, CA 95814
The filing comes with a $70 fee, which is non-refundable. If the Secretary of State office rejects your form, you cannot get the payment back. But you are able to resubmit the form and they will apply the fees paid to the new request. If you decide to submit in person, you have to pay another $15 fee. This is a non refundable fee and will need to be paid again upon resubmission. Additionally, you can get a certified copy for $5. LLCs that choose to send the form by mail will have to include a check or money order.
What You Need To File For California Articles Of Organization
There are steps you should follow to register your LLC in California successfully. Follow each of them and make sure you provide all the necessary information.
LLCs should submit a proposed name. However, choosing a name does not automatically mean that it is final. The Secretary of State will decide if the name you have chosen is acceptable. Your proposed name should be different from other active LLCs registered in California. You can do a business entity search to check if the name you want is available.
To avoid rejection, you should ensure that you follow the naming rules that the California state law has laid out. Your LLC name should include any of the following:
- Limited Liability Company
- Ltd Liability Company
- Ltd Liability Co.
Additionally, there are words that you cannot include in your company name.
- Insurance Company
- Any term that suggests your company issues insurance policies
You have to list the physical and mailing addresses of your company. California does not require you to have an address within the state. However, you should make sure that you include the office address where you keep the company’s business records even if it is in another state. The business address cannot be a P.O. Box, however, you can use a P.O. Box as the company’s mailing address.
All California LLC’s are required to designate a registered agent, which can either be an individual or a company. If you decide on having a registered corporate agent, make sure it is qualified. The agent will be the point of contact for all legal correspondence between your LLC and the state. Thus, you should also make sure that the registered agent has a physical address that keeps regular business hours.
California allows you to choose how you will manage your company. The state allows LLCs to either be manager-managed or member-managed. The California Articles of Organization form has three options – a manager, multiple managers, and all LLC members. Select the management structure you will use.
- If you choose to have one or more individuals to be managers, then your LLC will be manager-managed. The manager/s will have the authority to manage the LLC. The individual can be a member or externally contracted.
- If you want to leave the management of the LLC to one or more members, then your company is member-managed. If you choose this, each member will play an active role in managing the operations of the business.
Some states require LLCs to include a specific statement of purpose. However, California is one of those that accept general business purpose. The state’s law has already filled in this portion for you. You cannot change the statutory purpose statement written on the form. If you want to have a detailed business purpose, you can opt to include it on your operating agreement.
The signatory of the form should be the organizer of the business. This person is the one who files and prepares the Articles of Organization. You can choose a member of your LLC or hire an outside party.
How Long It Takes
When it comes to filing, you should also be patient. The Secretary of State allows you to check the current processing time on their website. Thus, you can monitor when you can expect them to finish. However, their timeline can change depending on the volume. Generally, you will have to wait for around one month.
Their Sacramento office offers three processing options – within four hours for $500, same day for $750, and 24 hours for $350. Only precleared and approved filings can qualify for the four-hour processing. Check the California Secretary of State’s website for the preclearance service.
Things You Need To Remember
- Your responsibility does not end once you have filed the Articles of Organization. Your LLC should submit an Initial Statement of Information using Form LLC-12 with the Secretary of State within 90 days upon filing.
- Write legibly using either black or blue ink.
- If you need to make changes to your California Articles of Organization, file an amendment. The state provides a form that LLCs can use if they wish to change the company name, management type, or business address.
The process of starting your own business in California can be overwhelming. However, DoMyLLC can help you get through every step without a hassle.
Business Filing Section