Cost of Starting an LLC in California Compared to Nevada

By Lauren Miller

Compared to starting a corporation, forming a limited liability company (LLC) is relatively inexpensive. However, states fees involved in registering an LLC vary widely. The filing procedure for LLCs in California and Nevada are similar, but filing fees for LLC documents differ. All fees cited are valid as of 2010.

Compared to starting a corporation, forming a limited liability company (LLC) is relatively inexpensive. However, states fees involved in registering an LLC vary widely. The filing procedure for LLCs in California and Nevada are similar, but filing fees for LLC documents differ. All fees cited are valid as of 2010.

Name Reservation Costs

Selecting a name for an LLC involves making sure that the name is available. A name cannot be the same or indistinguishable from other businesses. Both California and Nevada offer name reservation services. This allows businesses to secure the name and prevent others from using it while they make preparations to register their company with the state. In Nevada, the fee to reserve a name for a $90 day period is $25. In California, the fee to reserve a name for 60 days is $10.

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Registered Agent Costs

Both Nevada and California require LLCs to have a registered agent receive service process documents and state notices on the company’s behalf. In California, a registered agent is referred to as an agent for service of process. The cost of a registered agent depends on several factors. In both states, if the LLC uses someone associated with the company as the registered agent, there may be no cost involved. However, commercial registered agents will charge a fee for their services. Registered agent businesses may charge anywhere from less than $100 to several hundred dollars. The Nevada Secretary of State provides a database of registered agents authorized to do business in the state.

Articles of Organization Registration Costs

In both California and Nevada, the primary document needed to register an LLC with the state to make it a legal entity is called the articles of organization. In California, the document filing fee for mailing or in-person submission is $70. In Nevada, the filing fee for online, mailing or hand delivery is $75.

Additional Document Filing Costs

In California, an LLC is required to file a statement of information within 90 days of filing the articles of organization. The document includes basic information about the LLC and has a filing fee of $20. In Nevada, LLCs receive a document from the state after they register their LLC called the “List of Managers.” The company must return this document within a specified period of time along with a filing fee of $125.

Licenses and Permits

The cost of licenses and permits varies depending on business type and locale. Municipal governments set fees for local licenses of all types of business entities. A business owner can find out the costs of licenses and permits by using a federally-maintained database at Business.gov. The database includes license and permit information for every locale in the United States.

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Formation of an LLC in California

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How to Create an LLC in Nevada

A limited liability company in Nevada must file with the secretary of state to do business legally. An LLC is a business entity that has some legal aspects and advantages of both a corporation and a partnership. Owners are known as members. As a member of an LLC, your personal property is protected as your personal assets are shielded from creditors and the debts of the company. Nevada does not collect personal or corporate income tax. A Nevada LLC can choose to be taxed with “pass through” taxation. This can amount to a substantial savings for a business.

Nevada LLC Filing Requirements

The Nevada Limited Liability Company Act -- Nevada Revised Statutes, Chapter 86 -- provides the filing requirements for forming a Nevada LLC, or limited-liability company. The act essentially requires that a document called articles of organization be filed with the secretary of state in order for the LLC to become a separate legal entity that can engage in business. The secretary of state’s office makes LLC forms and information available through its website.

How to Look Up an LLC in California

All businesses -- including limited liability companies -- that wish to engage in significant business within the state of California must register with the California secretary of state. The Business Entities Division of the California secretary of state maintains a free online database that contains details about all LLCs registered in California. In addition, for a small fee the Business Entities Division allows individuals to obtain certified or uncertified copies of records detailing more extensive information about an LLC.

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