Transcription
By the end of this video, you will have a California LLC and an official business that's ready to accept money. And it only takes eight steps. And yes, there are different packages. It just depends on what you need. But I'm going to walk you through a few additional options to make life way easier. You decide if you want to pay for them.
But why should you listen to me? Because I teach business owners how to do this. I've done it many times. And I own and operate a successful company. It's called Scorch Marker. We sell American-made craft supplies. So, here are the eight steps that we're going to cover: Filing your LLC paperwork, your business name, your business address, registered agent, operating agreement, employer identification number, business bank account, and how to stay out of trouble now that you have a business.
Let's start with the name. Go to Zen Business by clicking the link in the description. Then, click on "Get Started" and type in the name of the LLC that you want. Then choose California as your state and select your industry. Just get as close as you can. It doesn't have to be exact. But before we move on to the next step, we need to make sure that your business name isn't taken. You're going to use these two websites to do a name search, and they will tell you if your LLC name is already in use.
The first is the Secretary of State website. This is the most important. Go to this website or click the link in the description and run a name search. If it's not taken, great. Let's move on. If it is, try typing in a different name until you find one that isn't taken, and then you can use that one. The second website is called Name Check. It will tell you if your email, social media, and website is already in use. This is not as important as the first one, but it will give you an idea of what's available.
Now that you have this page filled out, hit next. But before we keep going, you need to understand that you can file this paperwork directly with the state, but it won't save you time or money. This is why we're using Zen Business. They have multiple options you can choose from. This will allow you to do everything at once instead of going to multiple websites and creating multiple logins. It's by far the best way to form an LLC in California, and I've tried all of them.
The next question you can answer truthfully and then hit next. When it asks if your business will have employees, they're referring to full-time W2 payroll employees. So, select "no" and hit next. You can always add this in later.
Now, let's talk about step three, the business address. Using your home address is fine. I've done it for years. In fact, it's the easiest and the cheapest by far. But if you want to rent a business address, you can do that, too. I'll leave a link in the description for Anytime Mailbox. They're a service that allows you to rent office space virtually, so you can have a business address that isn't your house. Just do me a favor and if you decide to use them, Google Street Maps the address you're thinking about before you pay for it. Make sure it's a legit-looking building and not a mailbox store or a UPS store. You definitely can't use a P.O. box either. We've got to make sure it looks legit. There's a link in the description for you if you need it. So, before you hit next, you'll either need to put in your home address or the address of the business location that you've rented. Then, we can move on.
Next, answer how far along your business is and then select your business goal. Mine is primary income. Now, enter your details to save your progress in case your computer freezes or something weird happens.
We're now at step four, registered agent, which is a person or a company that can officially accept mail on your behalf during business hours. You can be your own registered agent using your home address. But if you don't want that responsibility, you can also pay Zen Business to do it for you. They'll accept official correspondence from the government on your behalf and notify you. They'll even put the mail in your account. It'll cost a little bit of money, but will make life way simpler. I typically pay Zen Business to do this for me, but you don't have to.
Now, we need to choose our package. The $0 option is for your LLC paperwork only. Note that the California LLC filing fee is $70. There's no way around this. It is mandatory no matter who you use or how you do this process. It's the only unavoidable fee we have. What I suggest you do is select the Pro package. That way, we can get all eight steps done in one sitting, and you can be done with this process by the time the video is over. If you choose the $0 option, you're going to have to go get your own EIN and your own operating agreement. Plus, it will take a little bit longer. Just so you know, I choose the Pro option so I can keep things simple and move faster.
Now, we want to decide if we want to use Zen Business's built-in banking platform. If you choose yes and pay for it, you'll be able to log in to your Zen Business account and manage everything online. I have a Zen Business bank account, but I also have others. If you want to explore a free option, I'll leave a link in the description below to one of the business banking platforms that I use. The next option is for Money Pro, a service that Zen Business offers to help you with accounting and tax prep. I have a team for this, so I'm going to choose to opt out, but if it's something that you want, feel free to grab it.
We're now at step five. The next screen will ask you about legal document templates. They're good. I've seen them. But as a thank you for watching my videos, I'm going to give you all 22 of my legal documents for free. I'll leave a Google Drive link in the description for you. I paid an attorney thousands of dollars to put all of these together for me. And included in them is the operating agreement, which you will need for step six. But if you want to buy them from Zen Business, please feel free to. They're great.
The most important legal document in that folder is your LLC operating agreement. I need you to fill it out and save it to your PC. Then print it out, sign it, and tuck it away safely somewhere in your office or your home. This is the document that outlines how your business actually operates. You can change it any way that you want. Feel free to add or take away anything. There are very few rules around this. You don't need to send it to anyone. No one needs to approve it. You just need to have it on file in case something happens.
Please review your info on the next screen and make sure it's correct. Make sure it says LLC as well. We're going to add any partners later on. The next screen is the total amount of money owed to complete the process. You can see the full breakdown on the left. The cheapest this can possibly be is the $70 for the California state filing fee, but I recommend spending a little bit more so it's simpler, easier, faster, and all done in one place. Put in your payment details and create a password so we can get to the next screen.
We're going to be at step six soon. Choose "no thank you" on the future filing date as we want to get this done now. Now, choose your company indicator by choosing LLC. My business is going to sell services, so I'm going to select that option. Answer "no" to the remaining questions and then select how much money you believe this business is going to make in its first year. Any answer is okay here. On the next screen, I want you to type one clear sentence that describes what your business is going to do. Just be general. It doesn't have to be perfect.
Now, we need to choose the structure. Most people will choose solo. This is what I pick. You can always add partners later. If you select partners, you're going to need to put in their personal information so the state knows who they are. So, unless it's a real partnership that's already been predetermined, just pick solo. And no, it's not a good idea to put your spouse on the business. You can always add them in later if that's something that you want to do. For now, keep it simple.
Do you plan to have employees? They want to know if you need payroll services. I choose "no" because I like to get that all set up once I have made the decision and officially hired somebody. I don't need it before that. Now, we need to enter our address. Use your home address or the virtual address that you rented from Anytime Mailbox. I use my home address. Check the correct boxes on the next screen and then hit next. If you used a rented address to form the business, you still need to enter your home address on the next screen so Zen Business can mail you the initial paperwork.
Next, enter your personal information and select "no" for any outstanding judgments. You would know if you had any. The next screen is very important. You need to select "manager." You want this to be an LLC that you have total control over, unless you're a 50/50 partnership. In that case, you'll select "member-managed" and you'll need to enter your partner's information on the following screens.
Now, the BOI reporting or beneficial ownership information reports has been suspended as of April 2025. But if you want to be extra safe, you can pay Zen Business to submit all of this information for you and you'll never have to worry about it again.
Now, we need to talk about your statement of information. California requires you to update your information every single year. The same information on this LLC application. You have two options. You can either log in and submit this every single year yourself or you can pay Zen Business to handle it for you. It costs a few extra dollars to have Zen Business do it, but it's one less thing that you have to worry about. So, I prefer to just pay them to handle it, but it's totally up to you. Whatever you choose, just don't forget about it and make sure it gets done every year.
If you need tax advice, they can help you, but I have my own team and this is something that I teach. So, I'm going to opt out for now. The business kit is next. I actually suggest getting this one. It's pretty cool. If you opt in, Zen Business will take all of your legal documents and put them in a really cool binder and mail them to you. They'll even send you a cool little confetti popper. This is a very big and exciting step. So, I suggest you get this to make it all real. Celebrate it. Keep these documents in a folder in your safe at home and know that you're starting this process off on the right foot and super organized.
Now you get to choose whether you want a business license report. Zen Business will send you the documents that you need to be compliant with your city and your state. This is often times a sales and use tax permit with California or the CDTFA and a business license with your local city wherever your business address resides. You can do this on your own if you like, or you can pay Zen Business to send you all this paperwork so you can have an easier time just getting it done.
Let's complete the order and move on to step six, which is the EIN, also known as your employer identification number. An EIN is like a social security number for your business. You need your EIN number and your LLC paperwork to open up a business bank account, and that's how you're going to start taking money. You can do this directly with the IRS, but Zen Business makes it a lot easier. So, enter your social security number on the next screen. Every EIN is tied to an individual social security number. That's why it's required. Select "no" for highway motor vehicles unless you're starting a transportation or trucking company. And select "no" on Form 720. Then select "YouTube" for how you heard about Zen Business. And we'll move on to step seven.
Step seven is a business bank account. If you opted in for Zen Business's banking services, you'll fill out all of that paperwork and information. Now, it's really simple. Just use your home address for everything. Even if you rented a business address, we want the business banking address to be your home address instead of the business one. It just makes things easier. If you want to use a different business banking service, you need to wait until you get your LLC paperwork and your EIN. You're going to need those two things to apply for it. Now, remember, I left a link to the business banking platform that I use in the description below. So, pull it up in another tab in case you want to apply for one later on.
Now that we're done, you've logged into your Zen Business dashboard. This is where you can view your LLC paperwork and EIN, get access to your business banking, opt in for any other services you may have skipped, and also get access to the legal documents that you may have paid for. So, whenever anybody asks you for your LLC articles of organization or your EIN, you can always log in to Zen Business, go to the documents tab, and find all of it safely here for you.
Now, let's move on to the final step, number eight. How to stay out of trouble and do things right. You're a business owner now. You need to stay organized. No one's going to check up on you or remind you to do things. You must be proactive and learn. It is now your job. I'm going to give you some pro tips so you can avoid a lot of the mistakes that I've made. Here's where you need to start.
Keep your business money in your business account. Keep your personal money in your personal account. Do not mix business and personal money together. If you want to invest money into your company to get it started, transfer money from your personal account into your business bank account and then spend it on business stuff. If you want to pay yourself, transfer money from your business bank account to your personal bank account before you spend it on personal things.
Get a sales and use tax permit from California. You can do this by going to cdtfa.gov. It's called a tax and use. It's also known as a reseller's permit. This will allow you to buy goods as a company and not have to pay sales tax. Some vendors will require this and so does the state. Make sure you get a business license with your city. Every city is different. You have to go on their website and look and see what is required. Sometimes home-based businesses don't have to spend or do anything. Sometimes they do. You have to check. Just be proactive about it. Take a look. Figure out what's required and get it done.
Make sure your statement of information has been updated with the state of California every single year. Unless you're having Zen Business do it for you. Please fill out and sign your operating agreement. Use either Zen Business's or the one that I gave to you for free. It's important that you just fill it out, sign it, and put it in a drawer or save it on your computer. Keep good track of the money that comes into your business and the money that goes out. It's very important. Stay organized. Try to save everything in a Google Drive folder, including all of your receipts. Just snap a picture of them and upload them.
Learn how to file and pay your business taxes. It's a little bit different than when you work for someone and get a paycheck. There's a few extra steps, including prepayments, quarterly, or yearly stuff. If you need more help, I can teach you how to do this. Set aside 20 to 30% of every single dollar that you make. Don't spend it. You're going to need it to pay the tax man.
Find people that have done what you want to do and learn from them. It's the fastest way to get from where you are to where you want to go. And lastly, don't do this alone. Find a group of people that are on the same path as you and connect with them. We learn so much faster as a group than we do on our own.
Congratulations. You've now completed every step you've needed to take to become an official California LLC. You can start taking money as soon as your business bank account is open. I hope this video was helpful. If you need more help, I've got a ton of YouTube videos. I put out a ton of shorts on Instagram and I have a small community of entrepreneurs that are just like us that sell products. So, if you're looking for that group, DM me on Instagram or go to vaner.com. Thanks for watching.