California Business Compliance Checklist
California has the most extensive small business regulations in the U.S. — the $800 minimum franchise tax alone is a defining feature. This page covers everything from filing fees to sales tax to hiring laws.
$70
$20
Every 2 years
7.25%
state base rate
Yes
1. Entity Formation
| LLC filing fee (Articles of Organization) | $70 |
| Corp filing fee (Articles of Incorporation) | $100 |
| Registered agent required | Yes — must have a physical address in the state |
| Publication requirement | No |
| Processing time | ~7 business days (expedited available for extra fee) |
2. Annual Maintenance
| Annual/periodic report | Every 2 years — fee $20 |
| Franchise tax | $800 annual minimum franchise tax on all LLCs and corporations. |
3. Sales Tax
| State base rate | 7.25% |
| Combined rate range (with local) | 7.25% – 10.75% |
| Economic nexus (out-of-state seller) | $500,000 per year |
| Marketplace facilitator law | Yes — marketplaces (Amazon, Etsy) collect on your behalf. |
Need to check nexus across multiple states? Use our Sales Tax Nexus Checker.
4. Employer Requirements
| Minimum wage | $16.50/hr (2025) |
| Paid sick leave law | Statewide mandate |
| Non-compete enforceability | Banned — non-competes generally unenforceable |
| Contractor classification test | ABC test — hardest to classify as contractor |
Full employment law breakdown: California Hiring Laws.
5. Workers' Compensation
California allows private-market workers' comp insurance (competitive market). Coverage is required starting with your first employee.
Estimate your premium with our Workers' Comp Calculator.
6. State Income Tax
Progressive brackets — top marginal rate is 13.3%.
Compliance by Business Structure
Pick your structure to see structure-specific compliance items.
What Makes California Distinctive
Compliance quirks and rules that separate California from other states — worth understanding before you file.
- California charges an $800 annual minimum franchise tax on every LLC and corporation, even for entities with zero revenue. New LLCs formed after 2021 got a 1-year waiver — expired for 2024+.
- California LLCs also pay an LLC fee on top of the $800 minimum for gross revenue over $250K, on a graduated scale up to $11,790 for revenue over $5M.
- The California Statement of Information ($20) is due biennially for LLCs, annually for corporations — separate from the franchise tax.
- California became one of the first states to require gender diversity on public company boards (repealed by court order in 2022, but influence remains in corporate governance).
This is a reference, not legal advice.
State fees and rules change. Verify current values with the California Secretary of State, Department of Revenue, and Department of Labor before filing. For complex situations, consult a licensed CPA or attorney.