So you’ve found your niche and your ready to take your brand or service to the next level. Your ready to start a legitimate business. You’ve done your research and LLC is the way you want to go to protect your business. A limited liability company makes your business a company. It also limits an owner’s personal liability for business debts and lawsuits and offers flexibility when it comes to ownership, management and taxation of the business.
Before filing my LLC in California I had to decide if I wanted my business to be public or private because in California your business is public record, meaning anyone can find out who owns your business. Since I’m very proud of my business that wasn’t a big issue for me but if your looking to be anonymous stay away from a LLC in California.
How Do I Form an LLC in California?
You have two options use legal zoom a one stop shop or if your brave enough file yourself. Legal zoom takes the guess work out of everything while filing yourself is easy and doable if your know the steps and are prepared to pay the minimum $800 LLC tax. $800 sounds like a lot but you don’t have to pay it right away when filling your LLC. You have until the 15th day of the 4th month after the day you file with the Secretary of State to pay so that means once you finish your LLC it’s go time. Time to get your hustle on to make that money back.
If money is an issue and your just getting off the ground with your business the good news for all my future entrepreneurs is that Gov. Gavin Newsome just passed a bill that states anyone who files an LLC from 2021-2023 the $800 fee is be waived. So I recommend just waiting a few months and further developing your business plan until 2021. This time right now couldn’t be more perfect to level up. I wish I had the opportunity to have my first years fees waived so take advantage of this opportunity because I hear California is the most expensive state to start a business in.
First Step: Name your LLC
Figure our what name you want to operate your business under. You use Business Search to check that your name isn’t already in use. Then, check google to make sure the url is available. You may not be ready for a website just yet but if you feel like eventually that you’ll require one secure your domain name at the same time while filing your LLC so that way it’s yours for future use. Most people don’t know this even I was green to this but people buy up random domain names in hopes they can up charge anyone who is looking to buy it. They literally just sit on it and don’t use it. They just want to make a profit of your need or want for that specific domain name.
Second Step: Choose a Registered Agent
You or any one you know can be your Registered Agent or you can hire a company to act as one. All a registered agent does is make sure that you receive all your legal documents in case a lawsuit is ever brought against you. This is why it should be someone you trust will give you your important documents in a timely manner. I used my mom for mine and my husband has me as his for his business.
Third Step: Register your LLC with the Secretary of State.
You will need to pay two filing fees to form an LLC in California. A $70 fee to file Articles of Organization with The California Secretary of State’s office. It typically takes 3-5 business days for the state to approve your California LLC.
Pay the second fee of $20 to file a statement of information, Form LLC-12. You have to file this within 90 days of forming your LLC.
Fifth Step: Create an Operating Agreement.
There are a bunch of free operating agreement templates online. An operating agreement basically outlines your business and how it will operate. Once you’ve made one follow the agreement.
Sixth Step: Apply for your EIN.
An EIN is a Employer Identification Number also known as a Tax Id used by the IRS to identify businesses and individuals for tax purposes. You can request this for FREE from the IRS. You need an EIN to open up a business bank account, for federal and state tax purposes and to hire employees.
Seventh Step: Open up a bank account for your business.
A business bank account will separate your personal assets from your company’s and make filing your taxes easier.
Eighth Step: Register with the Franchise Tax Board.
Starting a business has many challenges hopefully from ready this post starting a LLC is no longer one of them. The whole process can be intimidating but once you’ve got your LLC you are officially a women owned business. Now you need to start acting like one and signing all important documents on behalf of your LLC.
As a reminder make sure that you stay on top of your taxes because they will charge you a penalty for non payment and late payment. You could even lose your company, it’s name and identity to someone else when it gets suspended by the Franchise Tax Board. The fees associated with the LLC are ongoing and need to be paid every 1 or two years to keep your LLC compliant and in good standing. You’ve worked to hard to build your company you must be protected! Make getting your LLC a priority.
Upgrade your thinking and manifest how large your company will be and how these startup cost will will be peanuts compared to the amount of money you’re about to touch. Stay positive, stay focused and stay consistent your business will flourish. You just need to believe in yourself. The difference between the unsuccessful and the successful is successful people take chances and try even if that means they fail. Don’t be afraid of failure. Eventually you’ll find your rhythm and when you do it’s nothing but up from there.
Sis, stop sleeping on yourself!