California LLC structure and cost: an $800 floor, and a fee that ignores whether you made money

Every California LLC owes $800 a year. Not every profitable one. Every one, including the LLC that lost money, the one that did nothing, and the one formed in Wyoming that happens to do business here. Then, above $250,000 of California revenue, a second fee stacks on top of the $800, and that fee is charged on gross receipts rather than profit.

Run the arithmetic and the design becomes clear. A California LLC with $3 million of revenue owes the $800 minimum plus a $6,000 fee, so $6,800 to the Franchise Tax Board before a dollar of income tax on any profit it made. A business with $5 million of revenue and no profit at all owes $12,590. California taxes a low-margin business as if it were a prosperous one.

California’s second LLC fee runs on revenue, so a business with no profit can owe $12,590.

Where the entity actually lives

A California LLC has a birthplace and a residence, and in California the residence decides almost everything. The doctrine is on the where your LLC lives page.

California charges the $800 to any LLC organized here, registered here, or doing business here, which closes the out-of-state escape.

The minimum tax under Rev. and Tax. Code § 17941 reaches every LLC organized in California, registered in California, or doing business in California. That third category is the one that catches people, and California reads it broadly: a member running the company from a California home, a single California employee, or sales into the state above the Franchise Tax Board’s threshold can each be enough. Form in Wyoming, operate from San Diego, and you have a Wyoming filing fee, a Wyoming registered agent, a California registration obligation, and the same $800. The protection page explains why the legal protection does not travel either.

The two-layer tax

The structure is simpler than its reputation and more expensive than it looks.

The $800 is a floor, not a bill, and it is owed every year the LLC exists regardless of income or activity.

Layer one is the $800 minimum franchise tax, owed annually whether the company profits, loses, or sits idle, and it stops only when the LLC is formally dissolved and cancelled. Layer two, under Rev. and Tax. Code § 17942, applies once California-source total income reaches $250,000: $900 from $250,000 to $499,999, $2,500 from $500,000 to $999,999, $6,000 from $1,000,000 to $4,999,999, and $11,790 at $5,000,000 and above. Both layers apply together.

Two features of that second fee deserve stating outright. It is measured on gross receipts, not on margin, so it does not care whether the business made money. And the brackets have not been adjusted for inflation in many years, so ordinary revenue growth pushes companies into higher tiers over time without any change in real income. For a high-revenue, thin-margin operation, a low-tax state can be worth real money, provided the business is genuinely capable of moving, which is the test the nexus rules above impose.

Series LLCs cost more here, not less

The series structure is sold as a way to hold many assets cheaply. California is where that pitch breaks.

California will not let you form a series LLC, and it charges $800 for every foreign series doing business here.

California does not authorize domestic series. It recognizes foreign ones, and the Franchise Tax Board treats each series doing business in California as its own LLC owing its own $800. Five series operating in California owe $4,000 a year before earning a dollar, which deletes the one-cheap-filing rationale for anyone California can reach. The series LLC page covers what the internal walls are worth generally; in California the cost case is usually gone before the legal question matters.

Moving property into an entity

This is the most expensive structuring question in California, and it is the one where a general answer would do more harm than good.

Moving California real estate into an entity raises two separate taxes, and neither has a single statewide answer.

The first is documentary transfer tax, imposed at the county level and, in some cities, supplemented by local measures that reach several percent on high-value transfers. Rates and city surcharges vary widely, and this page does not carry figures for them.

The second is larger and is the one that ends deals. Transferring real property into an entity can trigger a change-in-ownership reassessment for property tax purposes, which resets the assessed value that Proposition 13 has been holding down, sometimes for decades. The general principle is that a transfer into an entity is excluded from reassessment where the proportional ownership interests stay identical, and that a later change in control of the entity can trigger reassessment on its own. The mechanics of both tests are technical, they turn on details of the ownership chart, and they are not confirmed here.

The honest instruction, which is worth more than a number: before moving California real property into any entity, get the reassessment analysis from a California property tax specialist or the county assessor, and price the documentary transfer tax for the specific county and city. A structure that is sound everywhere else in this site’s material can be the single most expensive thing you do in California if the reassessment question is answered after the deed records rather than before.

Privacy

There is none worth planning around.

California’s Statement of Information puts your managers or members on the public record.

The Statement of Information discloses the people running the company, and it is public. California is not a privacy jurisdiction, and no filing choice inside California changes that. The anonymous LLC page covers the general limits of the states where privacy is real.

The bottom line

Every California LLC owes an $800 minimum franchise tax annually, whether it profits, loses, or does nothing.

The tax reaches LLCs organized, registered, or doing business in California, so forming in another state does not avoid it.

Above $250,000 of California revenue a second fee applies, from $900 to $11,790, charged on gross receipts rather than profit.

An LLC with $3 million of revenue owes $6,800 before income tax, and a $5 million business with no profit still owes $12,590.

California will not form a series LLC and charges $800 for each foreign series doing business here.

Moving real property into an entity raises documentary transfer tax and Proposition 13 reassessment questions that must be answered before the deed records.

What this page does not cover

This page is about what the entity costs and what it can be. How creditors reach you, including reverse veil piercing, is on the protection page. What the statute lets your operating agreement do is on the governance page. The filing fees, the payment deadlines, and the two dates that can cost $800 are on the filing page.

Last verified July 2026.