Many California new business filing fees have recently been lowered to $0 (free). This development is welcome news to entrepreneurial hopefuls, but what does it really mean?
Below, we’ll break down everything you need to know about the 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.
What CA formation documents are now $0 (free) to file?
Most California new business formation documents are now free to file, including:
- Articles of Organization (LLC)
- Articles of Incorporation (Corporation)
- Application to Register (Foreign LLC)
- Statement and Designation by Foreign Corporation
- Certificate of Limited Partnership
- Application for Registration (Foreign Limited Partnership)
Note: There are still two formation documents that cost $70 to file. They include the Application to Register a Limited Liability Partnership (LLP) and a Statement of Partnership Authority (general partnership).
What other California forms are free to file?
There are a few additional forms that were already free to file before California lowered the cost of formation documents. Forms that were previously free to file in California (and still are) include:
- Resignation of Agent for Service of Process (all business entity types)
- Termination documents (all business entity types)
- Certificate of Dissolution
- Certificate of Cancellation
- Short Form Cancellation Certificate
- Statement of Dissolution (General Partnership)
- Corporate Disclosure Statement (Corporation and Foreign Corporation)
- Certificate of Election – Stock (Corporation)
- Certificate of Surrender (Foreign Corporation)
- Certificate of Cancellation of Foreign Name Registration (Foreign Corporation)
- Alternative Security Provision (Limited Liability Partnership)
- Supplement to Statement by Foreign Lending Institution
Learn more about the full costs to start a California LLC.
Statement of Information
While CA formation documents are now $0, you will still need to pay a fee to file your Statement of Information. A Statement of Information is commonly known as an annual report or biennial report in other states.
This document must be filed by all LLCs, corporations, and nonprofits registered in the state of California. The filing is due within 90 days of registering your new business. If your business is an LLC or nonprofit, it must then be filed every two years thereafter. If your business is a corporation, it must be filed every year.
The filing fee for an LLC or nonprofit’s California Statement of Information is $20. The filing fee for a California corporation’s Statement of Information is $25.
Note: We can help you file your CA Statement of Information.
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 the limited liability company (LLC), corporation, and limited partnership.
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 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 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 cost, 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.
Limited Partnership
Limited partnerships can also be formed for less thanks to California’s new $0 Application for Registration. A limited partnership is a business formed by at least two people. One partner is considered the “general partner,” and oversees business operations. The other partners are known as “limited partners,” and their responsibilities don’t involve business management.
In this structure, the general partner holds unlimited liability for the business’s debt. The other partners have liability equal to their investment in the company.
Two of the benefits of limited partnerships include limited liability (for the other partners), and full business control for the general partner.
This entity type may work better for certain industries than others, such as family businesses or real estate investors. Learn more about limited partnerships.
Start your new California business (we can help)
Interested in starting an LLC? Use our comprehensive guide to forming an LLC in CA. We walk you through the entire process, step-by-step (with lots of helpful hints along the way). We’ve also got a helpful guide on how to form a corporation in California.
If the process of navigating the rules to form a business still seems daunting, don’t sweat it. We’re here so that you never have to go it alone.
We can handle everything from formation to compliance for you, so you can focus on actually running your business.
Looking for a sign that it’s time to stop fantasizing about being your own boss and actually launch your dream business? The new $0 filing fee means there’s never been a better time to start a business in California than right now. Let us help you get started today!
Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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