How to start a business in California in 2026: every filing, every fee, and what 6,400+ California businesses ask

The short answer

The pages that rank for this search are filing services, law firms and a Reddit thread. They list the forms. None says what a California business earns once it is running, or what an existing one costs to buy instead. This guide adds that from the Main Street Index, BigIdeasDB’s census of 84,900+ businesses-for-sale listings, of which 6,400+ are in California. Every figure from it is an asking price or a seller-stated number, never a closed sale.

“Get an accountant early or the taxes will eat you alive.”r/Entrepreneur, on starting a business in California

California start-up filings at a glance

Ten registrations cover most new California businesses, and only three of them are state-level fees you cannot avoid as an LLC: $70 to file, $20 for the Statement of Information and $800 of annual tax (California Secretary of State and Franchise Tax Board, October 6, 2026). The rest depend on your name, your products, your city and whether you hire.

Sole proprietor, LLC or corporation: let the $800 decide year one

California charges the three common structures very differently in their first year: a sole proprietor pays no entity tax, a corporation is exempt from the $800 minimum in its first taxable year, and an LLC pays $800 from day one (Franchise Tax Board LLC and corporation pages, October 6, 2026). That is the opposite of what many older guides say, because for tax years 2021 to 2023 new LLCs were exempt. The FTB page now lists that exemption only for “tax years beginning on or after January 1, 2021, and before January 1, 2024.”

• Sole proprietorship. No Secretary of State filing, no $800. Profit goes on your personal return. No liability shield. Most side businesses and first-year service businesses start here.
• LLC. $70 to form, $20 for the Statement of Information, $800 a year from year one, and an extra fee once total California income passes $250,000. The FTB says the $800 is due “even if you are not conducting business, until you cancel your LLC.”
• Corporation. $100 to form. Per the FTB, “newly incorporated or qualified corporations are not required to pay the minimum franchise tax in their first taxable year.” More paperwork every year after.

Forming in another state does not escape it. The FTB applies the $800 to every LLC “doing business or organized in California,” and the Secretary of State’s own LLC-1 form warns that LLCs “may have to pay minimum $800 tax.” A Nevada LLC trading in Los Angeles registers in California as a foreign LLC and pays both states.

“California has the Franchise Tax board fee of $800 while other states don’t or have other tax revenue requirements.”r/llc, replying to a new California LLC owner

Check the date on any guide before you rely on its tax advice; posts from 2021 to 2023 correctly said the first LLC year was free, and they are still ranking. If you are unsure whether you need an entity at all, our guide to starting a business while working full time covers running as a sole proprietor first.

The December trap: when to file a California LLC

An LLC’s first $800 is due by the 15th day of the 4th month after it files with the Secretary of State, and the next one is due for the next tax year, so an LLC formed in late December pays $800 for a few days of 2026 and $800 again for 2027 (FTB, October 6, 2026). The only first-year escape the FTB lists is a tax year of 15 days or fewer in which the LLC did no business in California.

“I did the same in California. Started my LLC at the beginning of November. Already paid my $800... I feel you.”r/llc, thread titled about forming an LLC on December 25

If you are ready in November or December, either file in January or operate as a sole proprietor for the last weeks of the year. And if you form an LLC and abandon the idea, the FTB says a short form cancellation (Form LLC-4/8) filed within one year of organizing removes the first-year tax. Late payment costs extra. One commenter on a 2026 thread about a late first payment described the FTB penalty this way:

“it’s 5% of the unpaid tax, plus another 0.5% of it for each month or part of a month it stays unpaid. on $800 that’s $40 plus $4 a month”r/tax, on a new California LLC that paid $800 a month late

The second California LLC charge: the fee on total income

Above $250,000 of total California income, an LLC pays a fee on top of the $800, and 82.7% of California businesses for sale that state revenue are above that line (FTB fee schedule; Main Street Index, 4,400+ California listings with revenue, October 2026). The fee is based on income before expenses, so a low-margin business can owe it while barely profitable.

The median California listing states $700,800 of revenue, which sits in the $2,500 band: $3,300 a year to the FTB before any tax on profit, if it is held in an LLC. That is the number to plan for once a business is established, not the $800. It is also why many owners move from an LLC to an S corporation as revenue grows; that choice changes the tax on profit too, so it is a CPA conversation, not a rule of thumb. Our cost to start a business guide lists the costs that are the same in every state.

Filing with the Secretary of State on bizfile Online

LLCs and corporations file online at bizfile Online: $70 for an LLC’s Articles of Organization (Form LLC-1) and $100 for a general stock corporation’s Articles of Incorporation (Form ARTS-GS), per the forms on sos.ca.gov (October 6, 2026). Online is the fastest route. Paid speed-ups are a 24-hour filing for $350 or same-day for $750, and in-person drop-off in Sacramento adds a $15 handling fee.

Two follow-ups are easy to miss. First, the Statement of Information: an LLC files Form LLC-12 within 90 days of registering and every two years after, for $20; the form warns that failing to file brings a $250 penalty. Second, User Access: since August 1, 2026, bizfile only shows the Statement of Information option to users who have set up access for the entity, per the Secretary of State's filing tips page. Set it up when you form the company, not on the due date.

Before you file, search bizfile for your name. The Secretary of State registers the entity name; it does not register a trade name you use in front of customers. That is the county’s job.

Fictitious business name: a county filing plus four weeks of newspaper

Anyone who trades under a name other than their own legal name must file a fictitious business name statement with the county clerk within 40 days of starting, publish it in a local newspaper once a week for four successive weeks within 45 days of filing, and file proof of publication within 45 days after the run ends (Business and Professions Code 17910 and 17917; Government Code 6064). The statement expires after five years (BPC 17920).

Many guides still say 30 days for publication; the current statute says 45. The newspaper is where the cost varies, and owners report a tenfold spread:

“it’s 25 bucks. The first paper I called wanted 240 bucks!”r/sweatystartup, on filing a California DBA

“My city actually wouldn’t issue my final DBA until I showed proof that is was published.”r/sweatystartup, same thread

Phone two or three adjudicated papers in your county before you pay. An LLC trading under its exact registered name does not need a fictitious business name; an LLC called “Smith Holdings LLC” that trades as “Sunset Pool Care” does.

Seller’s permit from CDTFA: free, and not a licence

You need a seller’s permit if you are engaged in business in California and sell or lease tangible goods that would ordinarily be taxable at retail; it is free to apply online, though CDTFA “may require a security deposit” (CDTFA Obtaining a Seller's Permit, October 6, 2026). Wholesalers need one as well as retailers. A business with several premises may need one per location.

• Services usually do not need one, but CDTFA notes that labour which creates a new item (a custom ring) is taxable, while repair labour is not.
• Pop-ups and markets under 90 days at one location use a temporary seller’s permit.
• Some products need an extra account on top of the permit: cigarettes and tobacco, cannabis, covered electronics, new tyres and lead-acid batteries, per CDTFA’s permits and licences page.

CDTFA is explicit that the permit is not a business licence: “You should contact your city and/or county business license department to obtain a separate business license.”

City licence: how Los Angeles and San Francisco differ

California has no general state business licence, so the licence comes from your city, and the two biggest cities run it differently: Los Angeles taxes your first year at renewal, while San Francisco charges a flat registration fee by gross receipts, $55 plus a $4 state fee under $100,000 (LA Office of Finance and SF Treasurer & Tax Collector, October 6, 2026).

Los Angeles. “All individuals or entities conducting business activities within the City of Los Angeles are required to apply for and obtain a Business Tax Registration Certificate,” per the Office of Finance. The first year is not exempt; its tax is collected when you renew in year two, which the city calls the back tax. Businesses with global gross receipts under $100,000 qualify for the Small Business Exemption if they renew on time. The catch is the word “on time.” Freelancers in Los Angeles describe finding out years late:

“In my experience a lot of LA-based tax folks also never mention this tax, which I find kind of baffling.”r/AskLosAngeles, on the LA business tax

“the one time I was late, I was fined $450.”r/AskLosAngeles, same thread

“Went through the process just now it took me about five minutes and I didn’t have to pay anything.”r/AskLosAngeles, same thread, after registering

San Francisco. The Treasurer & Tax Collector requires registration within 30 days of starting business in the city, renewed by the last day of February. The 2026-27 fee is $55 for up to $100,000 of San Francisco gross receipts, $95 up to $250,000 and $160 up to $500,000, each plus a $4 state fee. A First Year Free program waives initial registration, licence and first-year permit fees for qualifying new businesses. If you use a trade name in San Francisco, the Treasurer reminds you to register it with the County Clerk as well.

Every other city sets its own rules. Search “[your city] business tax certificate” and register in the first month.

Industry permits: use CalGold before you sign a lease

CalGold, run by the Governor’s Office of Business and Economic Development, lists the permits for a business type in a chosen city or county with the agency that issues each one; it does not issue permits itself, and the new version notes its data “may still be incomplete” (October 6, 2026). Enter “General Business Information” if your type is not listed.

Run it before you sign a lease. Food businesses need county health approval, many trades need a state contractor or professional licence, and zoning decides whether you can run a business from home at all. The California Business Portal and the LA Business Navigator cover the same ground for their areas.

Hiring: register with EDD within 15 days

You must register with the Employment Development Department within 15 days once you pay more than $100 in wages in a calendar quarter, counting cash, cheques, app payments and the value of meals or lodging (EDD Register as an Employer, October 6, 2026). EDD then covers payroll tax deposits, wage reports and the notices you must give staff in six further steps. $100 is a low bar: one weekend helper crosses it.

What year one costs in state and city fees

The state and city fees for a small California business run from $0 for a sole proprietor using their own name to $890 plus local fees for an LLC, and they are small next to rent, equipment and stock (agency fee pages, October 6, 2026). These are the fees this guide could verify:

In Los Angeles the city line can be $0 in practice for a small business that claims the Small Business Exemption on time. From year two the picture changes: the corporation starts paying the $800 minimum and the LLC adds the income-based fee once it reaches $250,000. For the costs that are not paperwork, use our startup cost guide or, if cash is tight, the guide to starting with no money.

What California businesses earn and ask

California businesses for sale ask a median 2.50x their stated owner earnings (SDE), the lowest of the three largest state markets, against 2.65x in Florida and 2.62x in Texas, all three before any look-alike screen (Main Street Index, 3,000+ California listings stating both, October 2026). The median California listing asks $300K and states $160K of owner earnings. That is useful as a ceiling for a new venture: it is what a working California business in its category earns after years of operation.

Two California findings come out of that table once you re-cut it.

1. The low multiple is mostly mix, not a bargain. Fewer California listings include the building (5.7%, against 8.6% in Florida and 10.6% in Texas), and the cheap end is full of pool service routes and supermarket sushi kiosk resales, 20+ of which ask well under $100K. Compare leased businesses with the national median for the same industry and California asks 3.5% below the norm (2,700+ listings). Remove routes and kiosks and the gap is 2.5% (2,400+), with Texas 0.4% above and Florida 1.7% above on the same basis. California is slightly cheaper for what you get, not dramatically so, and that is despite the $800 tax and the LLC fee its owners carry.

2. California sellers hide their earnings more often. Only 49.9% of California listings state owner earnings, against 63.7% in Florida and 59.3% in Texas. That is not a quirk of which marketplaces or industries California listings come from: applying the rest of the country’s disclosure rate to California’s exact industry and marketplace mix predicts 58.0%. The California listings that hide earnings ask less ($250K median against $375K for those that state them) and offer seller financing less often (11.3% against 18.9%). For a would-be founder, the practical result is that a California comparison needs a bigger sample, or a direct question to the broker, to see what a business really earns.

Within industries the picture splits. Leased auto repair shops ask 2.18x in California (120+ listings) against 2.59x elsewhere (540+), and medical practices 2.06x against 2.72x. Cafes go the other way at 2.97x against 2.37x, and hair salons 2.64x against 1.95x. Our auto repair shop guide covers why California shops trade cheap.

Los Angeles, the Bay Area, San Diego and Sacramento compared

Inside California, the Bay Area stands out: its listings ask the least ($250K median) yet state the most owner earnings ($177K), and only 36.9% of them state earnings at all, the lowest of any region (Main Street Index, 960+ Bay Area listings, October 2026). Los Angeles and Orange County is the largest pool and the cheapest by multiple at 2.35x.

For a founder the metro table answers a different question than it does for a buyer: what a typical established business in your area clears. In San Diego and Sacramento that is about $143K to $144K of owner earnings; in Los Angeles and the Inland Empire about $156K. If your plan for a new business in Sacramento needs $200K of owner earnings in year three to work, it is asking to beat the median business already trading there.

Supply is also a signal of competition. 1,500+ Los Angeles and Orange County businesses are for sale, and one commenter on the top-ranked Reddit thread for this search said the same about trades in the region:

“There’s tons of repair guys that do residential”r/Entrepreneur, an LA-area resident on starting an HVAC business

The same commenter’s advice was a Yelp page and a Google business profile with a set service area before anything else. That costs nothing and tests demand before you pay the $800.

Buy instead of start?

Buying skips the years it takes to build income, and in California the entry point is lower than most founders expect: 690+ California listings ask between $100K and $249K, at a median $174,900 for $86,433 of stated owner earnings, 1.95x (Main Street Index, listings stating both, October 2026). Below $100K the market is mostly pool service routes, supermarket sushi kiosks and small salons.

Retirement is the stated reason for 37.6% of California sellers who give one (4,300+ stated reasons), and other business interests for 25.7%. A buyer still files most of what this guide lists, with two differences. CDTFA says a seller’s permit does not transfer, so you apply for your own, and you should request a certificate of tax and fee clearance before closing, or you can be liable for the seller’s unpaid sales tax up to the purchase price.

To compare California with other states for buying, read our best state to buy a business study, which ranks 24 states on price, supply and loan math. The how to buy a business walk-through covers the process, and buy vs start sets the two side by side. Cheap entry points have their own guides: pool routes, salons and laundromats. Comparing states for a new venture instead? See our guides to starting in Texas and Florida.

Your California launch checklist, in order

Do these in order; steps 1 and 2 decide how much the rest costs, because the $800 depends on structure and filing date (FTB, October 6, 2026).

1. Choose the structure with the $800 in mind. A sole proprietorship pays no $800 entity tax. An LLC pays $800 from its first year. A new corporation is exempt from the $800 minimum in its first taxable year.
2. Time the filing date. An LLC formed late in the year owes $800 for that short year and $800 again for the next one. Unless the first tax year is 15 days or fewer with no California business, file in January rather than December.
3. File with the Secretary of State on bizfile Online. LLC: Articles of Organization (Form LLC-1), $70. Corporation: Articles of Incorporation (Form ARTS-GS), $100. Set up User Access, which bizfile has required for Statement of Information filings since August 1, 2026.
4. File the Statement of Information within 90 days. For an LLC, Form LLC-12 costs $20 and is due within 90 days of registration, then every two years. Missing it can bring a $250 penalty.
5. Register a fictitious business name if you use a trade name. File with the county clerk within 40 days of trading under the name, publish it in a local newspaper once a week for four weeks within 45 days, and file the affidavit. It expires after five years.
6. Get a seller's permit if you sell goods. Register free with CDTFA if you sell or lease tangible goods that are normally taxable. CDTFA may ask for a security deposit. Each location may need its own permit.
7. Register with your city. Los Angeles requires a Business Tax Registration Certificate for every business in the city. San Francisco requires registration within 30 days of starting; the 2026-27 fee is $55 plus a $4 state fee under $100,000 of gross receipts.
8. Look up industry permits on CalGold. Enter your city or county and business type at calgold.ca.gov to list the state and local permits for your activity, with the agency that issues each one.
9. Register with EDD before payroll. Register as an employer within 15 days of paying more than $100 in wages in a calendar quarter.
10. Put the FTB dates in your calendar. LLC annual tax: 15th day of the 4th month after filing, using FTB 3522. LLC fee estimate if total California income will reach $250,000: 15th day of the 6th month, using FTB 3536.

Before step 1, check the idea against real numbers. The Main Street Index shows what businesses like yours earn and ask in your California city, and our what business should I start guide helps if you have not picked one yet.

What this cannot tell you

The procedure is checked against the agencies on October 6, 2026; the data is what 6,400+ California sellers ask and state, not what businesses sell for or earn after an audit (Main Street Index, October 2026). Five limits matter:

• This is not tax or legal advice. Fees and rules change, and cities and counties add their own. Confirm with the agency and a California CPA or attorney.
• Asking, not closing. Final prices are usually lower, and stated earnings are unaudited.
• Half of California listings hide earnings. Every multiple and SDE figure comes from the 49.9% that state them, which skew larger.
• Listings are not every business. Off-market and broker-only deals are missing; a listing is a business someone is selling, which may differ from one being started.
• Region uses the locality a listing names. 1,800+ California listings name none and are left out of the metro table.

Methodology and sources

We read 6,400+ de-duplicated California listings in US dollars from the Main Street Index with read-only SQL on October 6, 2026, merging the “California - North” and “California - South” tags one source uses. Multiples are asking price over stated SDE, limited to 0.2x to 20x. Templated look-alikes (the same industry, SDE and revenue on three or more listings in two or more states) are removed from industry comparisons: 3.8% of priced California listings. The industry-adjusted figures divide each leased listing’s multiple by the national median for leased listings in the same industry (industries with 30+ priced listings) and take the median. The disclosure benchmark applies the rest-of-US disclosure rate for each industry and marketplace to California’s mix. Any cut under 30 listings is withheld.

Frequently asked questions