Series LLC in California: You Cannot Form One, and a Foreign Series Pays $800 Plus the Fee for Each Series
Series LLC in California: You Cannot Form One, and a Foreign Series Pays $800 Plus the Fee for Each Series
California does not allow a domestic series LLC. No California statute lets one LLC be formed with separate internal series, so you cannot create one by filing Articles of Organization (Form LLC-1). The Franchise Tax Board says it plainly: "A SLLC cannot be formed in California."
A series LLC formed in another state is a different matter. Once it registers to do business here, California treats each series as a separate LLC for tax. Each series owes the $800 annual franchise tax and, once its California-source total income is high enough, its own LLC fee. A foreign series LLC with five series owes $4,000 in franchise tax before any LLC fee, the same total as five separate California LLCs.
What a series LLC is
The Franchise Tax Board describes a series LLC as a group of LLCs in a tiered structure. A top-tier LLC controls the lower-tier units. Each unit holds its own assets and is liable only for its own debts. The structure appeals mostly to real estate investors who want one filing to hold several properties while keeping each property's debts separate.
Why California cannot form one
Articles of Organization (Form LLC-1, $70) create a single LLC. California law does not provide for internal series within it, so the separation you want has to come from a different structure. The usual options are:
- A separate California LLC for each property.
- A foreign series LLC formed in another state and registered in California.
- One LLC holding several assets.
Holding-company structures also exist. Attorneys and CPAs design them, and whether one fits your situation is a question for those professionals.
How a foreign series LLC is registered and taxed
Step 1: Register before doing business in California
A foreign series LLC must register with the Secretary of State before it does business here. The filing is Form LLC-5, which costs $70, and it requires a good-standing certificate from the home state issued within the past six months. Check the current filing method on the Secretary of State's business programs page at https://www.sos.ca.gov/business-programs. Choosing the home state is a separate decision, so compare that state's total costs, not only its filing fee.
Step 2: Each series pays the $800 franchise tax
Every LLC organized or registered in California in 2024 through 2026 owes the $800 minimum annual franchise tax from its first year. Because each series is treated as a separate LLC, each one pays it. Each series pays with FTB 3522 by the 15th day of the 4th month.
If a series' first taxable year begins in 2027, 2028 or 2029, the 2026 budget set a $400 first-year tax under Revenue and Taxation Code 17941(g)(2). Confirm with the Franchise Tax Board how that amount applies before you plan around it.
Step 3: Each series pays the LLC fee above $250,000
The LLC fee applies once California-source total income reaches $250,000. Under Revenue and Taxation Code 17942, the fee for each series is:
| California-source total income | LLC fee |
|---|---|
| $250,000 to $499,999 | $900 |
| $500,000 to $999,999 | $2,500 |
| $1,000,000 to $4,999,999 | $6,000 |
| $5,000,000 or more | $11,790 |
Each series files the fee estimate with FTB 3536 by the 15th day of the 6th month, and each files its own Form 568.
Series numbering on FTB forms
The Franchise Tax Board has specific rules for identifying series on payment vouchers and returns. The first LLC in a registered series enters the Secretary of State number on its first payment voucher, and the others leave that number blank on their first vouchers. Each series then writes "Series LLC #" with its number in red ink on vouchers, returns and correspondence. The Board assigns numbers to the others. Treat this as a detail to confirm with the FTB, not a complete filing guide.
Comparing your three options
The table covers cost mechanics only. It does not assess how a court would treat any liability protection.
| Option | Cost mechanics in California |
|---|---|
| Separate California LLC per asset | Each LLC owes its own $800 and its own LLC fee on California income. Each pays $70 for LLC-1 at formation, files its own $20 Statement of Information (Form LLC-12) every two years, and keeps a California agent and office. |
| Foreign series LLC registered in California | Each series owes the $800 and the LLC fee on its California income, plus the home state's costs. Registration on Form LLC-5 costs $70. |
| One LLC holding several assets | One LLC means one $800 and one fee but the assets share one liability shield. |
For a California LLC or a registered foreign LLC, the Statement of Information is due within 90 days of filing and then every two years during the six-month window ending on the last day of the anniversary month. The Statement of Information (Form LLC-12) costs $20. If it is missed, the FTB assesses a $250 penalty after a Secretary of State notice.
What the numbers mean for real estate investors
Suppose you hold four rental properties, each generating less than $250,000 of California-source income.
- Four separate California LLCs: 4 x $800 = $3,200 in franchise tax, with no LLC fee at those income levels. Add $70 for each formation and $20 for each Statement of Information every two years.
- Four series in a foreign series LLC: 4 x $800 = $3,200 in franchise tax, plus the $70 Form LLC-5 registration and the home state's costs.
The series structure does not lower the California franchise tax below the per-LLC amount. If any series reaches $250,000 of California-source income, its LLC fee applies on top of the $800. Whether the separation between properties holds up is a legal question. Ask a California attorney how a California court would treat the liability shield of a foreign series LLC you hold here.
Questions to take to your professionals
- Will a California attorney treat each property's liability as separate under a foreign series LLC?
- Do the home state's series LLC rules and costs fit your portfolio?
- Would separate California LLCs or a holding structure, which attorneys and CPAs design, cost less in total?
- Which first-year tax applies to a series whose first taxable year begins in 2027, 2028 or 2029?
Official and support resources
- Secretary of State, Business Programs Division: https://www.sos.ca.gov/business-programs
- bizfile Online for filings: https://bizfileonline.sos.ca.gov/
- California Small Business Development Center network: https://californiasbdc.org/
This page is informational only. It is not legal or tax advice. Fees, filing methods and tax rules change, so confirm each figure on the agency page before you file. For a structure decision, consult a California attorney and a CPA.