The quickest way to form an LLC in California is to hire a professional LLC formation service. These companies specialize in the formation of LLCs and handle all paperwork and filing on your behalf. Their familiarity with the process ensures all aspects will be taken care of and the application will be processed correctly and efficiently.
You can also avail of two premium services offered by the California Secretary of State that will increase the speed of your application – Preclearance & Expedited Filing services. Preclearance allows your application to be reviewed for completeness and correctness before you officially file it. And, expedited filing bumps your paperwork up to the top of the queue.
FASTEST WAY TO FORM LLC CALIFORNIA
Want to form an LLC in California quickly? The fastest way to form an LLC in the state of California is to hire a professional LLC formation service. These ensure all paperwork is completed and filed as efficiently as possible. The Best LLC Formation Companies are highly experienced, easy to use, and save you the time and effort of completing the application yourself.
The California Secretary of State offers two premium services that can be used to speed up the processing of your LLC formation application. These services are Preclearance and Expedited Filing. Both services involve an additional fee and require you to submit your paperwork in person at the state’s Sacramento office.
PRECLEARANCE & EXPEDITED FILING
The California Secretary of State offers preclearance and expedited filing services that allow you to speed up your application process. These services are available only in the State’s Sacramento office. If you need to get your company formed in a hurry – these services will be of interest to you.
Preclearnace allows you to submit a document to the California Secretary of State to determine if it complies with all legal requirements. Preclearnace can only be received by submitting the document in person at the Secretary of State’s Sacramento office. The fee for preclearance varies depending on the time frame specified for a response, see below.
• 10–Day Preclearance Service: $250.00
This service guarantees a preclearance response within 10 business days.
• 5–Day Preclearance Service: $300.00
This service guarantees a preclearance response within 5 business days.
• 72–Hour Preclearance Service: $400.00
This service guarantees a preclearance response within 72 hours.
• 24–Hour Preclearance Service: $500.00
This service guarantees a preclearance response within 24 hours.
EXPEDITED FILING SERVICES
An expedited filing service allows you to receive a guaranteed response to your filing within a pre-determined time frame. To avail of the expedited filing service your documentation must also be submitted in person at the state’s Sacramento office. The fee structure for expedited filing varies depending on the turnaround time needed, see below.
• 24-Hour Filing Service: $350.00
This service guarantees a filing response within 24 hours.
• 4-Hour Filing Service: $500.00
This service guarantees a filing response within 4 hours.
• Same-Day Filing Service: $750.00
This service guarantees a filing response by 4:00 p.m. the same day.
Paperwork must be received by 9:30 am.
HIRE A PROFESSIONAL OR DIY?
Although hiring a professional LLC formation service is your best bet if you want the quickest way to form an LLC in California – it is not your only option. You can choose to process the application yourself or you can hire an attorney or business accountant to file the paperwork on your behalf. Below we look at the pros and cons of each and how they will impact the speed of your application.
1: PROFESSIONAL LLC FORMATION SERVICE
The fastest way to get an LLC formed in California is to hire the services of a professional LLC formation company. These companies specialize in assisting individuals and businesses to form LLCs. The best formation services have ample experience and expertise and are incredibly efficient at processing an application with the California Secretary of State.
If you want to form an LLC quickly and avoid common pitfalls – this is your best option. There are several superb options out there with very reasonable fees. Our advice is to shop around and choose a service that best meets your budget and company needs.
Hiring a professional to process your LLC formation saves time. If you want to form an LLC quickly and efficiently, this is your best option. The formation company understands the landscape and how to navigate the requirements and red tape in getting your company officially sanctioned by the California Secretary of State. It’s definitely one of the quickest way to form an LLC in California.
Hiring a formation service is highly convenient. Once you provided them with all the information they need, you can leave the rest in their capable hands. They will complete your paperwork and file it with the state authority on your behalf. This frees you up to focus on running your business.
These companies are highly experienced. They specialize in forming LLCs. They have the expertise needed to ensure everything runs smoothly. Unless you have a track record of forming companies they will have more experience in the area and can be trusted to get your LLC formed quickly.
Many LLC formation companies offer a range of additional services that you may need. For example – they can act as the LLC registered agent, assist with business licenses and permits, and secure an EIN for the company.
The biggest disadvantage of hiring a formation company is the fee. All these companies charge a fee for their services. However, their fees are much smaller than hiring an attorney or business accountant to assist in the formation process. In fact, the best LLC formation services offer highly competitive fee structures.
HANDS OFF APPROACH
When you hand the LLC formation process over to a professional service – you adopt a hands-off approach. You become detached from the intricacies of application and the questions being asked by the Secretary of State.
2: DO IT YOURSELF
You can form an LLC in California yourself without hiring the services of a formation company. However, if you are unfamiliar with the process it can be a daunting and time-consuming process. The California Secretary of State’s website provides detailed information on the steps you need to follow and the legal implications of each stage. While a DIY approach is cost-effective, it is also time-consuming. And, if you want to form an LLC quickly in California, it is not a recommended option.
By adopting a DIY approach you will not have to pay any fees to a formation service or other professional. This is an attractive option for small start-up businesses. However, you need to weigh it up against your need to have the LLC formed quickly.
Processing the application yourself is empowering. It gives you full control over the process. A DIY approach can feel empowering and rewarding. You are the master of your own ship.
RISK OF ERRORS
A DIY approach to completing and submitting your paperwork comes with an increased risk of error. Unless you have experience in the area of forming companies – the chances are you will encounter a difficulty. Like anything in life, if you want something done well, hire a professional.
Processing an LLC formation application is a slow and time-consuming process. Especially if you are inexperienced with the steps involved. While a DIY approach will save money, it certainly won’t save on time and is not the quickest way to form an LLC in California.
3: HIRE AN ATTORNEY OR ACCOUNTANT
You can hire an attorney or accountant to help you form an LLC quickly in California. However, there is no requirement to hire either. They may be able to assist in the completion of and filing of paperwork. And, they can advise on the legal and financial aspects of running your business. Let’s take a look at the pros and cons of hiring an attorney or accountant to help you form an LLC.
STREAMLINE THE APPLICATION
If you are unfamiliar with the LLC filing process hiring a professional such as an attorney or accountant will streamline the process. This will speed up the formation process and help you get your paperwork filed with the State Secretary more quickly.
PEACE OF MIND
When you hire a professional to advise you on how to form an LLC – you have peace of mind that the company is being formed correctly and efficiently. Who better to help you navigate the process than an industry professional?
COST OF SERVICE
Hiring an attorney or accountant doesn’t come cheap. On Avergae they cost significantly more than engaging the services of an LLC formation company. If you own a small business or are operating on a restricted budget – this is an expensive option.
When you hire a professional to process an LLC formation on your behalf you relinquish control of the project to a third party. You become removed from the application process and are detached from communications and submissions with the California Secretary of State.
STEPS TO FORMING AN LLC IN CALIFORNIA
Forming an LLC in California can be broken down into 10 easy steps. You’ll have to pay a $20 Statement of Information Filing Fee and a $70 Articles of Organisation Fee when you submit your documentation. It typically takes 5 business days for state authorities to review your paperwork once it has been received. For a more detailed guide check out How to Form an LLC in California.
1: Choose a Company Name
Choose a unique name that cannot be easily confused with an existing company. You can reserve a name for 60 days by paying a $10 fee
2: Appoint a Registered Agent
You must appoint a registered agent for the company. This can be an individual or a business that agrees to receive official correspondence on behalf of the company.
3: Member vs Manager Management
Define the management structure of the company. It can be either member-managed or manager-managed.
4: Complete Articles of Organization
Complete the California Articles of Organization document. This captures everything the state needs to know about your company. Once complete, submit it to the California Secretary of State.
5: LLC Formation Certificate
Once your LLC has been officially sanctioned you will receive a California LLC formation certificate.
6: Statement of Information
An LLC must file an Initial Statement of Information within 90 days of formation. The statement must then be filed every 2 years after the initial filing.
7: Operating Agreement
Create an LLC Operating Agreement. This is an internal document that defines how the company will be managed. It also defines how profits and losses will be divided between members.
Obtain an Employer Identification Number. This is needed for tax reporting and is assigned by the IRS.
9: California Franchise Tax
An $800 annual franchise tax applies to all California LLCs regardless of whether they make a profit or a loss.
10: Additional Requirements
Ensure you comply with any additional requirements that apply to the operation of your LLC, for example Business Licenses, Sales Tax, and Employer Tax.
This article “Quickest Way to Form an LLC in California” was written by staff member Erik Chambers.
ABOUT THE AUTHOR
Erik is a 30-year industry veteran with a wealth of experience in cross-functional areas ranging from business consulting to business education. He has worked in the private sector where he has advised start-up enterprises on early formation, capital acquisition, and tax issues.
While he specializes in business formation he has also held roles in several academic institutions where he teaches organizational decision-making, business strategy, and operations management. Erik is a graduate of the McCombs School of Business at the University of Texas at Austin.