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Forming an LLC for Your California Hair Salon: The Complete Filing Guide

The parent guide gives you the short version: file Form LLC-1, pay $70, get on with your salon. This page is the long version, because in California the filing is the cheap part. What defines a California salon LLC is what follows the filing: an $800 tax owed every year whether the salon earns anything or not, a Statement of Information every two years, a county filing for your trade name with a newspaper publication step, and a second, income-based fee waiting at $250,000. Here is each piece in order, taken from the Secretary of State and the Franchise Tax Board.

Researched from California state sources. Our guides are free. We may earn a commission when you use a partner service, at no additional cost to you.

LLC, sole proprietorship, or corporation for a California salon

The parent guide gives the short version of this choice. Here is the long one. A sole proprietorship is what you are by default if you open a salon in your own name and file nothing with the state: there is no formation step, and legally there is no business separate from you, which means the salon's debts, lease obligations, and legal claims reach your personal assets. A sole proprietor registers the salon's trade name at the county level, covered below, and that filing creates no shield at all.

A limited liability company creates a separate legal entity between you and the salon. Formed properly and kept separate, it holds the business's debts and claims at the business level instead of following you home. Two limits deserve plain words. The shield covers the business's obligations; it does not protect you from claims about your own work behind the chair, and it weakens if you run the salon's money through your personal accounts, which is why the bank account section below matters. An LLC is also taxed flexibly: by default its income passes through to the owners, and the entity can elect corporate taxation at the federal level if that ever fits better. That election is a federal tax choice, not a different California entity.

A corporation is the third route: a separate entity formed with the Secretary of State, owned through stock, and run with more formal machinery, directors, officers, and records, than most single salon operations need. It carries its own $800 annual minimum tax in California, so it is not a way around the charge described below. For a first salon, the LLC is the structure California owners usually land on, and it is the one the rest of this page walks through. Whichever you choose, remember that the entity is separate from licensing: your Board establishment license and your stylists' individual licenses are still required, exactly as the California hub lays out.

Filing the Articles of Organization: Form LLC-1

You form a California LLC by filing Articles of Organization, Form LLC-1, with the California Secretary of State. The filing fee is $70, and LLCs are filed online through bizfile Online, the Secretary of State's filing portal. Work through the pieces in order:

1. Choose the legal name. It must include an LLC designator such as "Limited Liability Company" or "LLC", and it must be distinguishable from names already on file with the Secretary of State.
2. Name an agent for service of process. California's version of the registered agent: an individual who resides in California, or a registered corporate agent, with a California street address where legal papers can be delivered. A post office box does not qualify. Pick someone who will actually be there and who has agreed to serve, because a missed lawsuit notice is the worst way to learn the agent moved.
3. File Form LLC-1 and pay the $70 fee. The Secretary of State's bizfile Online portal, linked in the partner slot below, is the filing route. Filing creates the entity; it does not license the salon, and it does not finish your tax setup.
4. File the Statement of Information within 90 days. Form LLC-12, $20, listing the LLC's address, its managers or members, and its agent. This filing repeats every two years, and it is the one California LLCs most often let slip.
5. Keep the filing confirmations. Your bank, your landlord, and your payment processor will all ask for proof the LLC exists. Save the stamped confirmations with your lease and licenses.

Two California features define everything after the filing. There is no annual report to the Secretary of State; the biennial Statement of Information does that job instead, and the Secretary of State imposes a $250 penalty for failing to file it, which the Franchise Tax Board collects. And the $800 annual tax in the taxes section below starts accruing from your first year, on a deadline most new owners have never heard of until the notice arrives.

The fictitious business name statement: a county filing, not a state one

If your salon operates under a name different from your LLC's legal name, or you are a sole proprietor trading under any business name at all, California calls that name fictitious, and you register it with a fictitious business name statement, often shortened to FBN or DBA. The filing goes to the county clerk in the county where your business is principally located. There is no state registry and nothing to file with the Secretary of State for the name itself, which is the detail out-of-state guides routinely get wrong about California.

The timing rules live in Business and Professions Code Sections 17900 to 17930. File the statement at or within 40 days of starting business under the name. The statement then has to be published: once a week for four successive weeks in a newspaper of general circulation in the county, with the first publication running within 45 days of filing, and an affidavit of publication filed with the county clerk within 30 days after publication is complete. The statement expires five years after filing, or sooner if the facts you filed change, such as a new address or a change in owners. Filing fees are set by each county and vary: Los Angeles County, as one example, charges $26 for one business name on a statement and $5 for each additional name, so budget for your own county's schedule rather than a statewide number.

An FBN statement is not a license and does not create your entity. It puts the public on notice of the name you trade under, and it is practical paperwork: your bank will typically want to see the filed statement before opening accounts in the salon's name, and a mismatch between your FBN, your lease, and your bank records is a small thing that stalls bigger things, including the loans on our California business loans page. If your storefront name is exactly your LLC's legal name, you may not need one at all.

Your EIN from the IRS

Your EIN is the business's federal tax ID, issued by the IRS. You need one to hire employees, to file business taxes, and in practice to open the business bank account, because most banks require it even for a single member LLC, and the Employment Development Department wants it when you register as an employer. It is free. Apply directly through the IRS and ignore any website that offers to obtain one for a fee; those sites charge for a form the government gives away. Apply early, right after the LLC is formed, so the EIN never becomes the bottleneck when you sign a lease or set up payroll.

California tax accounts: the $800 tax, the LLC fee, and the seller's permit

The charge that defines a California LLC is the annual tax of $800, owed to the Franchise Tax Board under Revenue and Taxation Code Section 17941. Every LLC doing business in California or organized here pays it, and the FTB is blunt about the edges: the tax is due even if you are not conducting business, and it keeps being due every year until the LLC is formally cancelled. The first payment is due on the 15th day of the fourth month after you file your Articles of Organization, and later payments are due on the 15th day of the fourth month of your tax year, which is April 15 for a calendar-year business. You pay it with Form FTB 3522, and the LLC also files an annual return, Form 568. If an older guide or a friend tells you the first year is free, that exemption covered only tax years beginning in 2021 through 2023. It has expired.

On top of the $800 sits a second charge most new salons never reach but growing ones must plan for: the LLC fee under Section 17942. Once total California income, meaning gross income plus cost of goods sold, reaches $250,000, a fee of $900 applies, rising to $2,500 at $500,000, $6,000 at $1,000,000, and $11,790 at $5,000,000 or more. The fee is estimated and paid by the 15th day of the sixth month of the tax year, June 15 for a calendar-year business, with Form FTB 3536. A salon doing well enough to cross $250,000 in total income should hear about this ladder from its own calendar, not from an FTB notice.

Two more accounts complete the state picture. Before your first retail sale, register with the California Department of Tax and Fee Administration, the CDTFA, for a seller's permit. There is no fee for the permit itself. California does not tax beauty services, but it does tax retail products, shampoo, conditioner, and styling products a client takes home, at the 7.25 percent statewide base rate plus your local district taxes, and the permit is also what lets you buy resale inventory with a resale certificate. And the moment you hire, register with the Employment Development Department, the EDD, within 15 days of paying more than $100 in wages in a calendar quarter: new employers are assigned an Unemployment Insurance rate of 3.4 percent on the first $7,000 of each employee's wages, the Employment Training Tax adds 0.1 percent on the same wages, State Disability Insurance is withheld from employee pay at 1.3 percent for 2026, and every new hire is reported on Form DE 34 within 20 days of their start date.

The business bank account, and keeping the separation real

Open a business bank account in the LLC's name as soon as the EIN arrives, using your formation confirmation, your EIN letter, and your filed fictitious business name statement if you use a trade name. Then run everything through it: card settlements, booth rent, payroll, product purchases, rent. The liability separation you formed the LLC for is only as strong as the separation you actually keep. Money that flows back and forth between the salon and your personal account blurs the line the LLC exists to draw, and it makes your bookkeeping, your sales tax returns, and any future loan application harder than they need to be. Pair the account with the insurance decisions in our California salon insurance guide, and your salon's legal and financial structure is genuinely in place rather than filed and forgotten.

Your California LLC annual duties calendar

• 15th day of the fourth month after filing, then every year: the $800 LLC tax to the Franchise Tax Board on Form FTB 3522, April 15 for calendar-year businesses. Due even in a year when the salon earns nothing, until the LLC is cancelled.
• Every year: Form 568, the LLC's California return of income, filed with the Franchise Tax Board.
• 15th day of the sixth month (June 15 for calendar-year businesses): the estimated LLC fee on Form FTB 3536, only in years when total California income reaches $250,000.
• Within 90 days of formation, then every two years: the Statement of Information, Form LLC-12, $20 with the Secretary of State. The state imposes a $250 penalty for failing to file it.
• Not on your calendar: an annual report to the Secretary of State. California uses the biennial Statement of Information instead.
• Every two years: Board practitioner license renewals at $50, and the establishment license renewal at $40, before the expiration dates printed on the licenses.
• On the CDTFA's schedule: sales and use tax returns and remittance for retail product sales, at your assigned filing frequency.
• Within 20 days of each hire: new hire report to the EDD on Form DE 34.
• Every five years: renew the county fictitious business name statement, and refile within 40 days if your address or ownership changes.
• Every year: renew your city business license on your city's schedule.

That calendar is the real cost of a California LLC, and none of it is the $70 filing. The expensive mistakes are the quiet ones: letting the LLC slide toward suspension over a missed $20 biennial filing, assuming a zero-income year erases the $800 when it does not until you cancel, and swiping the personal card for salon expenses until the entity and the owner are the same pile of money again.

This page is general information researched from official California and federal sources, not legal, tax, or insurance advice. Requirements, fees and forms change; verify the current rules with the agency or regulator linked above before you file, sign or spend.

Frequently asked questions

How much does it cost to form an LLC for a California hair salon?

The state charges come in three pieces at the start: $70 to file the Articles of Organization, Form LLC-1, with the Secretary of State; $20 for the Statement of Information, Form LLC-12, due within 90 days; and the $800 annual LLC tax, first due on the 15th day of the fourth month after you file. Budget for all three in your first four months, not just the $70 filing fee.

Why does my California LLC owe $800 before it makes any money?

Because the annual tax under Revenue and Taxation Code Section 17941 attaches to the LLC's existence, not its income. Every LLC doing business or organized in California pays it, the Franchise Tax Board states it is due even if you are not conducting business, and it keeps being due every year until the LLC is cancelled. The first-year exemption people remember applied only to tax years beginning in 2021 through 2023 and has expired.

Does a California LLC file an annual report?

Not with the Secretary of State. California uses a Statement of Information, Form LLC-12, filed within 90 days of formation and then every two years for $20, and the state imposes a $250 penalty for failing to file it. The annual obligations run through the Franchise Tax Board instead: the $800 annual tax on Form FTB 3522 and the Form 568 return each year.

Where do I file a DBA for a salon in California?

At the county clerk, not the state. California calls it a fictitious business name statement, and you file it in the county where the business is principally located, at or within 40 days of starting business under the name. You then publish the statement once a week for four successive weeks in a county newspaper, and the statement expires after five years. Filing fees are set by the county and vary.

What is the extra LLC fee on top of the $800?

It is a separate Franchise Tax Board charge under Revenue and Taxation Code Section 17942, based on total California income, meaning gross income plus cost of goods sold. It starts at $250,000 of total income with a $900 fee, then rises to $2,500 at $500,000, $6,000 at $1,000,000, and $11,790 at $5,000,000 or more. It is estimated and paid by the 15th day of the sixth month of the tax year with Form FTB 3536.