California has dropped its filing fees for starting a new limited liability company (LLC) and many other business entities until June 30, 2023. Previously, entrepreneurs would have to pay $70 to file their Articles of Organization, but now they can form a California LLC for free ($0).
To encourage business growth, the California legislature has waived formation fees for domestic and foreign LLCs, corporations, and limited partnerships. That means it’s a great time to launch your California dream business.
Below, we’ll break down everything you need to know about how to form an LLC in California for free and the other new California business filing fees. We’ll explore which filings are $0, the types of business entities you can now form for less, and anything that’s changed with regard to starting a new business in the Golden State.
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What business types now cost less to form in California?
Thanks to the new $0 filing fees for California formation documents, three specific and popular business types can now be formed in the state for less money. They include limited liability companies (LLCs), corporations, and limited partnerships.
LLC
Now that California Articles of Organization are $0 to file, you can form an LLC in the Golden State for less money than before. Just a few benefits of starting an LLC include:
- Separation of personal assets and liabilities from those of your business
- Flexible organizational and management options
- Avoiding double taxation
- No ownership or profit restrictions
- Less red tape to stay compliant than in a corporation
This business entity type is a popular choice for entrepreneurs who want a flexible and simple structure. Learn more about LLCs.
Corporation
You can also form a corporation in California for less money now that the Articles of Incorporation are $0 to file. A few of the benefits of corporations include:
- Limited liability protection (if someone sues a corporation, they generally can’t go after the personal assets of its shareholders)
- The ability to issue shares of stock
- An unlimited number of investors
- Unlimited classes of shares
- The ability to go public
Some of the drawbacks of corporations include higher costs, double taxation, and the fact that business losses are not tax-deductible. This structure is often chosen by entrepreneurs who want to raise money for their business concept and sell shares to investors. Learn more about corporations.
