Forming a California LLC is a one-time event. Keeping it in good standing is a recurring job — and the obligations do not arrive on one convenient date or from one agency. The Franchise Tax Board wants its annual tax and, for larger LLCs, an income-based LLC fee. The Secretary of State wants a Statement of Information every two years. Your city wants a business license. Miss enough of it and the state can suspend your LLC, voiding its ability to sue, defend itself, or enforce its contracts. Here is the full checklist.
The $800 annual franchise tax
With narrow statutory exceptions, every LLC taxed as a partnership or disregarded entity that is organized, registered, or doing business in California owes an annual tax of $800 under Revenue and Taxation Code § 17941 — regardless of income, activity, or profitability. LLCs taxed as corporations instead pay under California's corporate tax rules. A dormant LLC that earned nothing still owes the applicable tax. The tax is due by the 15th day of the fourth month of the taxable year (April 15 for calendar-year LLCs), paid with FTB Form 3522. The obligation continues every year until you formally cancel the LLC with the Secretary of State; simply abandoning the entity leaves the meter running, with penalties and interest stacking on top.
The gross-receipts LLC fee
Separate from the $800 tax, Revenue and Taxation Code § 17942 imposes an additional fee on LLCs subject to that tax with total income derived from or attributable to California of $250,000 or more. The fee is tiered: $900 (income of $250,000 to $499,999), $2,500 ($500,000 to $999,999), $6,000 ($1,000,000 to $4,999,999), and $11,790 ($5,000,000 or more). Two traps here. First, the fee is based on total income attributable to California, not net profit — operating expenses generally do not reduce the fee base. Second, the fee must be estimated and prepaid by the 15th day of the sixth month of the current taxable year (Form 3536), with a potential underpayment penalty if the amount paid is too low. LLCs taxed as partnerships or disregarded entities also file an annual return, Form 568, reconciling the tax and fee.
The biennial Statement of Information (Form LLC-12)
Under Corporations Code § 17702.09, every California LLC must file a Statement of Information with the Secretary of State within 90 days of formation and every two years afterward, during the calendar month of formation (or the five preceding months). The filing updates the LLC's addresses, manager or member information, and — critically — its agent for service of process. The fee is modest ($20), but the consequences of skipping it are not: a $250 penalty and, eventually, suspension. If any of the reported information changes between cycles, you can and should file an updated statement; a stale agent address means you may never learn you have been sued until after a default judgment.
Registered agent, licenses, and local obligations
Several recurring items live outside the FTB and Secretary of State:
- Agent for service of process. The LLC must continuously maintain one — an adult California resident or a registered corporate agent. If you use a commercial agent service, keep the subscription current; a lapsed agent is a compliance failure.
- City and county business licenses. Most California cities require a business license or business tax certificate, renewed annually, for each location. Operating unlicensed can mean back taxes and penalties.
- Industry permits. Seller's permits (CDTFA), professional licenses, health permits, and similar authorizations carry their own renewal calendars.
- Employer obligations. If the LLC has employees, payroll tax filings with the EDD, workers' compensation coverage, and required workplace postings are ongoing duties.
- Fictitious business name. A DBA registration expires five years from filing and must be renewed with the county.
Internal housekeeping: the part everyone skips
California does not require LLCs to hold annual meetings the way corporations must, unless the operating agreement says so. But internal discipline still matters. Keep the operating agreement current as members, managers, or capital arrangements change; document significant decisions in written consents; maintain the required records (member lists, tax returns, financial statements) for inspection; and keep LLC finances strictly separate from personal accounts. Courts deciding whether to disregard an LLC's liability shield look hard at whether the owners themselves respected the entity. An LLC that exists only on its formation paperwork is an LLC whose protection may not hold when it matters.
What happens if you fall behind — and how to fix it
Miss the tax filings and the FTB can suspend the LLC; miss the Statement of Information and the Secretary of State can do the same. A suspended LLC cannot legally do business, cannot bring a lawsuit or defend one on the merits, may lose its name to a newcomer, and its contracts made in California during suspension are voidable by the other party. Revival is possible — file the missing returns, pay the taxes, penalties, and interest, and apply for a certificate of revivor — but it takes time you may not have when a deadline or dispute is pressing. The better path is a compliance calendar built once and followed. Our business formation practice sets up California LLCs with the full compliance picture mapped from day one, and helps existing LLCs catch up and stay current.
Talk to a California business attorney
Whether you are forming a new LLC or untangling one that has fallen out of good standing, we can map every deadline and get the entity where it needs to be. Schedule a free consultation or call (949) 418-2113.
This article is attorney advertising and provides general information only. It is not legal advice and does not create an attorney–client relationship. The law changes, and this article reflects the law as of its publication date. Every situation is different — contact us to discuss how the law applies to your exact circumstances. See our full disclaimer.
