Is an operating agreement legally required for a California LLC?

Yes for multi-member LLCs. Cal. Corp. Code § 17701.10(a) requires every California LLC to adopt an operating agreement. The statute permits oral agreements for single-member LLCs but written form is strongly recommended for banking and liability protection. Multi-member LLCs must have a written operating agreement signed by all members.

What is the $800 California franchise tax?

California imposes an annual minimum franchise tax of $800 on every LLC registered or doing business in the state, regardless of income. The tax is due by the 15th day of the 4th month after formation and annually thereafter. Assembly Bill 85 (effective 2024) waived the first-year tax for LLCs formed on or after 1 January 2024, but the waiver is set to expire and may not apply for new formations.

How often must a California LLC file a Statement of Information?

California LLCs file a Statement of Information (Form LLC-12) every two years. The initial filing is due within 90 days of formation. The fee is $20. The statement updates the LLC's address, agent for service of process, and managers or members. Failure to file results in a $250 penalty and eventually administrative dissolution.

What happens if a California LLC has no written operating agreement?

The default rules of the California Revised Uniform Limited Liability Company Act apply. Profits and losses split equally regardless of capital contributions, all members have equal management rights regardless of ownership percentage, dissolution requires unanimous consent, and a member cannot be expelled. These defaults rarely match what members actually intended, especially when capital contributions are unequal.

Can a California LLC operating agreement be amended?

Yes. The agreement itself should specify the amendment threshold (unanimous consent is the default under § 17701.10 if silent). Amendments must be in writing, identify the sections being changed, state the new language, and be signed by the required number of members. The amendment is internal and is not filed with the California Secretary of State.

Does California require LLC publication like New York?

No. California has no publication requirement for LLCs. New York is the only state with a mandatory newspaper publication requirement for LLC formation. California LLC formation requires only filing Articles of Organization (Form LLC-1) with the Secretary of State for a $70 fee.

State Reference · California · revised 28 April 2026

California LLC Operating AgreementRequired clauses, $800 franchise tax, biennial Statement of Information

California is one of five states that legally requires every limited liability company to adopt an operating agreement. The requirement appears in Cal. Corp. Code § 17701.10 of the California Revised Uniform Limited Liability Company Act. This page sets out what the statute demands, what the default rules are if your agreement is silent, the recurring fees that no agreement can waive, and sample clauses tuned to California-specific requirements.

General legal information, not legal advice

The summaries below describe California law as of May 2026. They are general legal information, not legal advice. LLC laws change. Verify current statutes with the California Secretary of State and the California Franchise Tax Board, and consult a licensed California attorney before finalizing your operating agreement.

What California Law Requires

Cal. Corp. Code § 17701.10(a) provides that the members of a California LLC may enter into an operating agreement governing the relations among the members and between the members and the LLC. Subsection (c) then makes the agreement effectively mandatory: it controls over default rules in the statute except for a short list of nonwaivable items (such as the duty of good faith and fair dealing, which cannot be eliminated). For multi-member California LLCs, the practical reality is that you must have a written operating agreement, and it must be signed by all members, or the default RULLCA rules govern by omission.

The agreement is not filed with the California Secretary of State. It is a private document held in the LLC's books and records. The Secretary of State only sees the Articles of Organization (Form LLC-1) and the periodic Statement of Information (Form LLC-12). Banks, lenders, the Franchise Tax Board, and courts will, however, ask to see the operating agreement when the LLC opens accounts, applies for credit, files state tax returns with elections, or becomes party to litigation.

Single-member California LLCs may technically use an oral operating agreement under the literal text of the statute. In practice, every California bank treats a written operating agreement as a precondition for opening a business account, and the Franchise Tax Board treats it as the controlling document for assessing whether a single-member LLC has elected pass-through treatment correctly. The cost of writing one is zero. The cost of not having one when you need to prove how the LLC operates is significant.

California-Specific Provisions

Four provisions of California LLC law have no parallel in most other states. Drafting around them is essential for any California LLC.

Operating agreement is mandatory for multi-member LLCs

Cal. Corp. Code § 17701.10(a)

California is one of only five states that legally requires an operating agreement (the others are New York, Delaware as a practical matter for the LLC Act to apply, Missouri, and Maine). The agreement does not need to be filed with the state but must exist and govern the LLC. For single-member LLCs the statute permits oral agreements, but every California bank and lender will demand a written one before opening a business account.

Manager-managed structure must be expressly stated

Cal. Corp. Code § 17704.07

California defaults to member-managed. To create a manager-managed LLC, the Articles of Organization (Form LLC-1) must specifically check the manager-managed box, and the operating agreement must define manager authority, removal procedure, and member voting rights. If the Articles say member-managed but the operating agreement says manager-managed, the Articles control under § 17704.07.

$800 minimum franchise tax cannot be waived by agreement

Cal. Rev. & Tax. Code § 17941

The $800 annual minimum franchise tax is a state revenue obligation that no operating agreement provision can override. The tax applies to every LLC organised, registered, or doing business in California, even if the LLC has zero income. AB 85 (2024) waived the first-year tax for newly-formed LLCs but that waiver was set to sunset; verify current status with the California Franchise Tax Board before relying on it.

Series LLCs are not authorised in California

Cal. Corp. Code § 17703.04

California does not recognise series LLCs. A Delaware or Nevada series LLC that registers to do business in California is treated as a single LLC for franchise-tax purposes, meaning each protected series may owe its own $800 franchise tax. If you want a series structure, California is the wrong state to form in. Consider Delaware, Texas, or Illinois instead.

Default Rules If Your Agreement Is Silent

If your operating agreement does not address a topic, the California RULLCA defaults govern. These defaults apply to many California LLCs operating from boilerplate templates or no agreement at all. Most members would not actually have agreed to these terms if they had read them.

Topic	Default Rule	Statute
Profit allocation	Equal among members regardless of capital contribution	Cal. Corp. Code § 17704.04
Management	Member-managed unless Articles specify manager-managed	Cal. Corp. Code § 17704.07(a)
Voting on ordinary decisions	Per-capita (one vote per member)	Cal. Corp. Code § 17704.07(b)(2)
Voting on extraordinary matters (sale, dissolution)	Unanimous consent of all members	Cal. Corp. Code § 17704.07(c)
Distributions	Equal among members, paid only on member request	Cal. Corp. Code § 17704.05
Member admission	Unanimous consent of existing members	Cal. Corp. Code § 17704.01(c)
Member dissociation	Permitted with notice; ceases to participate in management	Cal. Corp. Code § 17706.02
Dissolution	Unanimous consent or judicial decree	Cal. Corp. Code § 17707.01

The most surprising default is the per-capita voting rule. If two members each contribute $50,000 and a third member contributes $400,000, the default is one vote per member (each holding a one-third say in ordinary decisions), not voting power proportional to capital. Capital-weighted voting must be expressly written into the operating agreement.

California Filing Fees and Recurring Costs

California is among the most expensive states to maintain an LLC. The $800 annual minimum franchise tax is the most-cited example, but several other recurring fees apply. The operating agreement cannot waive any of these obligations.

Fee	Amount	When
Articles of Organization (Form LLC-1)	$70 (one-time)	Filed with Secretary of State to form the LLC
Statement of Information (Form LLC-12)	$20 (every 2 years)	Initial filing within 90 days; biennial thereafter
Annual Minimum Franchise Tax	$800 (annual)	Due by 15th day of 4th month; AB 85 first-year waiver may apply
LLC Fee (gross-receipts based)	$0 to $11,790 (annual)	Tiered fee for LLCs with California gross receipts over $250,000
Certificate of Cancellation (Form LLC-3 or LLC-4/7)	$0	Filed when winding up the LLC
Statement of Information amendment	$20	When changing agent, address, or managers between biennial filings

The gross-receipts LLC fee (separate from the $800 franchise tax) kicks in at $250,000 in California gross receipts and rises in tiers to $11,790 for LLCs with over $5 million in California gross receipts. See California Franchise Tax Board for current schedules.

Sample California-Specific Clauses

The four clauses below are tuned to California-specific issues and are not present in most generic LLC operating agreement templates. Each is illustrative only, adjust language to your specific facts before signing.

State of Formation and Statute ReferenceThe Company is a limited liability company organised under the California Revised Uniform Limited Liability Company Act, Cal. Corp. Code § 17701.01 et seq. Articles of Organization (Form LLC-1) were filed with the California Secretary of State on [Date], file number [LLC File Number]. The Company shall maintain its principal office at [California Address] and shall continuously maintain an agent for service of process in California as required by Cal. Corp. Code § 17701.13.

Statement of Information ComplianceThe Members or Manager(s) shall cause the Company to file the initial Statement of Information (Form LLC-12) within ninety (90) days of the filing of the Articles of Organization, and shall file a biennial Statement of Information thereafter as required by Cal. Corp. Code § 17702.09. The Company shall promptly file an amended Statement of Information whenever the agent for service of process, principal office address, or designated managers changes between biennial filings.

Franchise Tax and LLC Fee AllocationThe Members acknowledge that the Company is subject to the California annual minimum franchise tax of $800 under Cal. Rev. & Tax. Code § 17941, and to the gross-receipts-based LLC fee under Cal. Rev. & Tax. Code § 17942 if California gross receipts exceed $250,000. These obligations are Company expenses paid before any distribution to Members. The Manager shall set aside reserves sufficient to satisfy each year's minimum franchise tax and estimated LLC fee on a quarterly basis.

Capital-Weighted Voting (Override of § 17704.07(b)(2) Default)Notwithstanding the per-capita default voting rule of Cal. Corp. Code § 17704.07(b)(2), the Members agree that all voting on ordinary Company matters shall be allocated in proportion to each Member's Percentage Interest as recorded in Schedule A. Extraordinary matters listed in Section [X] continue to require unanimous consent of all Members.

Forming a California LLC: The Six Steps

Choose and check a name. The name must contain "Limited Liability Company" or an abbreviation (LLC or L.L.C.). Search availability via the California Secretary of State business search at bizfileonline.sos.ca.gov. Names cannot include "bank", "trust", "trustee", "incorporated", "corporation", or "insurance" without additional regulatory approvals.
Appoint an agent for service of process. Required under Cal. Corp. Code § 17701.13. Must be a California resident or a registered corporate agent with a physical California street address (no PO boxes). Commercial registered agent services cost $50 to $300 per year.
File Articles of Organization (Form LLC-1). $70 fee. File online via the Secretary of State's bizfile portal. The form asks for the name, address, agent for service of process, and whether the LLC is member-managed or manager-managed. Processing is typically 5 to 7 business days for online filings.
Adopt the operating agreement. Required for multi-member LLCs. All members sign the agreement. The agreement is not filed with the state but must be kept in the LLC's records. See the interactive builder for a structured outline.
Obtain an EIN from the IRS. Free at IRS.gov. Required for opening a business bank account, hiring employees, or filing California tax returns. The IRS issues the EIN immediately for online applications.
File the Statement of Information (Form LLC-12). Due within 90 days of formation, then every two years. $20 fee. Late filing triggers a $250 penalty and can lead to administrative dissolution of the LLC by the Secretary of State.

Five California-Specific Mistakes

Treating $800 franchise tax as optional

The minimum franchise tax applies even if the LLC has zero income, no California operations, and no California members. Forming a California LLC then operating from another state still triggers the $800 obligation.

Forgetting the biennial Statement of Information

Many founders file the initial Statement of Information then forget the biennial cycle. The Secretary of State sends reminders to the agent for service of process; if the agent address is stale, the reminder is missed and the LLC ends up administratively dissolved.

Assuming series LLC works in California

California does not recognise series LLCs. Forming a series LLC in Delaware then registering it to do business in California typically results in each protected series owing its own $800 franchise tax. The structure that saves cost in Texas costs more in California.

Defaulting to per-capita voting

The Cal. Corp. Code § 17704.07(b)(2) default is one vote per member regardless of capital contribution. If members contributed unequal amounts, the default voting rule is rarely what they actually wanted. The operating agreement must expressly opt into capital-weighted voting.

Using an out-of-state template without adjustment

A Delaware or Texas template will not reference California-specific requirements (Statement of Information, Franchise Tax, agent for service of process). A California-tuned agreement avoids enforceability gaps when courts or the Franchise Tax Board ask to see the document.

Statutory Sources

California Revised Uniform Limited Liability Company Act, Cal. Corp. Code § 17701.01 et seq., official text at leginfo.legislature.ca.gov
California Secretary of State business filings, Forms LLC-1, LLC-12, LLC-3
California Franchise Tax Board, LLC tax requirements