How to start your LLC in Corona, CA

How should you name your LLC? You might have your heart set on a name, but there are important things to consider first. You’ll want to ensure that it follows state rules and isn’t too close to an existing business’s name.

The rules for naming your company in Corona, CA are fairly simple according to Section 17701.08 of the California Corporations Code.

Your California LLC name must end with one of the following:

• Limited liability company
• Limited company
• An abbreviation of one of the two phrases above, like LLC, LC, or Ltd. Co.

Corporations Code section 17701.04 also forbids an LLC from being in these types of businesses:

• Banking
• Issuing insurance policies or insuring any kind of risk
• Trust companies

Your LLC name must be unique and easily distinguishable. You want to avoid confusing the public with a name similar to that of another California business.

Let’s say you have your heart set on the name “Corona Air Conditioner Repair, LLC,” but after a search, you find another California corporation named “Corona Air Conditioner Repair, Inc.” The names are too similar even though “Inc.” is a different kind of company.

If you make a simple change to your name such as “Corona Air Conditioner Service, LLC,” you should be okay. Just keep in mind that whether an LLC’s name is “distinguishable” from others or not is up to the Secretary of State.

Whatever name you choose shouldn’t be misleading to the public. This includes using another company’s name or choosing a name that would cause people to confuse it with government entities.

California Corporations Code also bans the use of several words such as:

• Bank
• Trust
• Trustee
• Insurer
• Insurance company
• Incorporated or the “inc.” abbreviation
• Corporation or the “corp.” abbreviation

If your business name implies that you carry any form of professional license, at least one of your members must have that valid license issued by an appropriate government agency.

For example, if your business is named “Corona Private Investigations, LLC,” you’ll need to hold a valid California Private Investigator License.

Before filing your paperwork, check to see if your name is available in California. You can perform a search for the name on the California Secretary of State website.

After naming your company, it’s also legal in California to apply to do business under a fictitious name or DBA (doing business as), but more on that later in this article.

What is a registered agent? A registered agent is an individual or company that receives service of process, legal documents, and official notices on your business’s behalf.

Service of process is a legal term for business letters or legal papers. Your agent is the gatekeeper between you, the state, and the public.

California state law requires that you appoint a registered agent and provide their details at the time of filing your Certificate of Formation. California’s rules for naming and changing registered agents are in section 17701.13 (a)(2) of the California Corporations Code.

Registered agents must meet the following requirements:

• Be at least 18 years old
• Have a physical address in the state of registration
• Be available to receive mail and sign official documents during normal business hours, Monday to Friday, 9 a.m. to 5 p.m.

A registered agent must also respond quickly in the event of a lawsuit so that your business avoids missed deadlines, fines, or penalties for non-compliance.

Some business owners choose to designate themselves as registered agents because:

• It’s cheap: You’re not paying someone for something you can do yourself.
• It’s simple: The only address and contact information you have to keep current is your own.
• It’s reliable: You will receive all important documents personally.

However, there are several downsides to this:

• No privacy: You’ll have to make your address available to the public on the Secretary of State’s websites.
• Junk mail/spam: Public-facing addresses are swarmed by junk mail in addition to a small amount of legitimate mail.
• No breaks: Registered agents must be open for service during all business hours. They don’t get time off.
• Business interruptions: If your agency address is the same as your business address, your business and clients may be interrupted by your duties as an agent. If you are getting served with a lawsuit in front of customers, that could be embarrassing or even hurt your business.
• It’s your fault if you miss something: You always have to make sure your agency address is correct and up to date. If you make a mistake or miss something, that’s on you.

For these reasons, most experienced business owners hire companies to act as their registered agents. These services cost between $100 and $150 per year. If you choose to use a law firm, you could spend up to $500 per year.

If you choose to start your LLC by using a business formation company, they often include a registered agent service in their packages. Feel free to take a look at our registered agent recommendations article for more information.

What are Articles of Organization? These documents turn your business idea into an actual legal entity ready to sign contracts and do business. California law states that filing the Certificate of Formation makes it official.

To file, you’ll need the following basic information as listed in 17702.01(d) of the California Corporations Code:

• The name of your LLC
• The purpose of your LLC
• A statement of how your LLC will be managed
• The registered street and mailing addresses of the LLC
• The name and address of the LLC’s registered agent
• The name and address of each person forming the LLC

The Secretary’s website contains a simple form (PDF) you can use to make sure that your articles have all of the necessary information.

The cost to file an LLC in California is $70. You can find a complete fee schedule on the Secretary’s website.

LLC Processing Time

As the largest state in the nation, California’s Secretary of State is very busy. Most of the year, the processing time for LLC articles of organization can be 3-5 business days. During December and January, the process typically takes longer, around 6-7 business days.

Due to COVID-19 processing times have been slightly slower than normal. As of January 2023, the Secretary of State reports the following processing times for LLC formation filings:

• By mail: 5-9 business days
• In-person filings: 5-9 business days
• Filings completed with the Secretary’s e-forms: 5-6 business days
• Online filings: 2-3 business days

If you need your LLC filed faster than the times above, the Secretary of State can speed up the process in two ways: (1) Preclearance Service and (2) Expedited filing Service.

Preclearance Service

This requires an in-person trip to the Secretary’s Sacramento office where the staff will review them for any errors or issues. Obtaining this gives you an official statement that your articles will be approved and minimizes the chances of delay due to mistakes.

There are four levels of preclearance service (PDF), depending on when you need a response from the Secretary of State:

• Class I service ($500): you will get a response within 24 hours.
• Class II service ($400): you will get a response within 72 hours.
• Class III service ($300): you will get a response within 5 business days.
• Class IV service ($250): you will get a response within 10 business days.

Expedited Filing Service

Whether or not you get preclearance, expedited filing service helps you to shortcut the waiting times when filing your articles normally. As with preclearance service, you must file in person.

There are three levels of expedited service (PDF) available:

• Class A service ($500): you will receive a filing response within 4 hours. You must have preclearance approval to use the Class A service.
• Class B service ($750): you will receive a same-day response (by 4:00 p.m.) as long as you submit your articles no later than 9:30 a.m.
• Class C service ($350): you will receive a response within 24 hours of filing your articles.

Class B service is more expensive than Class A due to the preclearance requirement for Class A.

The Sacramento office is the only location that processes expedited filing service requests. You must go to the public counter located at 1500 11th Street, Room 390, on Monday through Friday from 8:00 a.m. to 5:00 p.m.

To save time and avoid the hassle of LLC filings, all seasoned entrepreneurs use LLC formation services. For recommendations, check out our article on the best LLC services.

By law, your California LLC must have an operating agreement. Though you do not have to file this operating agreement with the Secretary of State, Corporations Code section 17701.13 does require you to keep a copy at your company’s office.

What is an operating agreement? An operating agreement is a contract between you and other members of your LLC. It outlines the rules by which your company does business, keeps you prepared for everyday situations, and protects against the unexpected.

Your operating agreement should list each member of the company and how they’re expected to work. It can be as simple or detailed as you’d like to make it.

California does not require a written operating agreement, but we strongly suggest that you write yours out. Without an agreement, the legal system will be responsible for deciding any disagreements, and state laws don’t always work in favor of the business owner.

The benefits of having an operating agreement include:

• They determine the rights and duties of LLC members. If one LLC member is responsible for running the business or managing the books, the operating agreement should say so.
• They say whether the LLC has a member or non-member manager and what the manager has the right to do. Managers also have special duties to the company and its members. The operating agreement should state these.
• They outline what the LLC is legally able to do. The operating agreement should also set down how the company is allowed to conduct its business from day to day.
• They say how new members can join the company. They also have rules about how exiting members can leave.
• They set down how and when profits are paid to members. They can also create different types of membership and payment schemes.
• They say whether members or managers are in charge. They also say how to hire and fire managers.
• They say how and under what circumstances the LLC should end. You might not want to dissolve your business now, but you might in the future. It’s best to think about it and plan before it becomes an issue.
• They say how to change the rules. You may need to amend your operating agreement in the future. The operating agreement should set down the rules for making changes.

When it comes to hiring, firing, and everything in between, an operating agreement allows you to customize the rules of the LLC according to your expectations.

The best LLC formation services provide operating agreement templates for as low as $50, and we highly recommend them.

California LLCs must also file a statement of information within 90 days after the articles of organization. After that, you have to file a new statement every two years.

This statement is similar to your Articles of Organization but requires more detailed information.

This law is here to make sure all California LLCs regularly report vital information to the California Secretary of State. That way, the state can enforce its laws and regulations.

Under California Corporations Code section 17702.09, you must include the following items in every statement of information:

• The name of your LLC and the Secretary of State’s file number for your LLC. You should have obtained the 12-digit file number when you filed your articles.
• The current name and street address of your registered agent for service of process. If your agent is a corporation, just the name will do.
• The street address for your LLC’s main office. If your mailing address is different, you need to include that too.
• Names and addresses (business or residential) of all managers and the CEO, if any. If your company doesn’t have a manager or CEO, you have to provide the name and address of each LLC member.
• An email address for the LLC or its agent. You only need this if you wish to receive renewal notices or other Secretary of State correspondence by email.
• Your LLC’s main business. This is a description of what your LLC specifically does.

This may seem overwhelming and redundant, but the state has made it easy by providing a fill-in-the-blank form: LLC-12 (PDF)

After completing this form, you must pay a $20 filing fee to the California Secretary of State. This state fee applies to both the original filing (within 90 days of formation) and subsequent filings every 2 years following.

Statement of Information vs. Articles of Organization

What is the difference between a statement of information and the articles of organization?

The California statement of information is designed to give notice to the state and anyone searching the records of the most up-to-date information about your LLC, including any changes to ownership and management.

The articles are historical records and do not need to be updated accordingly.

What is an EIN? EINs are tax identification numbers assigned to businesses by the Internal Revenue Service. They function much like social security numbers, but for businesses instead of individuals. They allow the IRS to keep track of companies that pay taxes.

Here are the most common cases in which your business will need an EIN:

• You have more than one member
• You have employees
• Your business is taxed as a C or S corporation

We highly recommend getting an EIN even if they’re not required. Most banks and online payment services require them to open an account.

Obtaining an EIN is easy and can be done in minutes on the IRS website. You can also file via mail or fax.

It’s free of charge and shouldn’t be paid for unless part of a larger LLC formation package.

Read More: How to get an Employer Identification Number in California