California is one of the few states where an operating agreement can be entirely verbal and still be legally real. Section 17701.02 defines it as the agreement of all the members — “whether oral, in a record, implied, or in any combination thereof.” That sounds generous until you reach § 17701.10(d), which carves out a short list of provisions that may only be varied by a written agreement. One of them is § 17704.08, the section governing whether the company must reimburse and indemnify a member who personally paid a company debt. So a California LLC can have a valid oral operating agreement that is powerless on the one question most likely to cost a member money.
This page provides a free California LLC Operating Agreement template in both PDF and Microsoft Word format, drafted against the California Revised Uniform Limited Liability Company Act, Title 2.5 of the Corporations Code. It includes indemnification language under § 17704.08, Statement of Information cross-references, and signature blocks for member-managed and manager-managed structures. Download the version that fits your workflow and customize the bracketed fields.
Free California LLC operating agreement template and sample form
Fill it in below and the document is generated in your browser — nothing is uploaded and there is no signup. The PDF and Word versions are there if you prefer to draft offline. Whichever you use, put the indemnification terms in writing — § 17701.10(d) will not let an oral agreement vary § 17704.08.
California LLC Costs and Deadlines (Verified August 2026)
California’s real cost is not the filing fee — it is the $800 annual minimum franchise tax that every LLC owes whether or not it earned a dollar. Confirm current figures with the Secretary of State and the Franchise Tax Board before relying on them.
| Item | Amount | Detail |
|---|---|---|
| Articles of Organization (Form LLC-1) | $70 | California Secretary of State |
| Statement of Information (initial) | $20 | Due within 90 days of registration |
| Statement of Information (ongoing) | $20 | Every two years thereafter |
| Annual minimum franchise tax | $800 | Franchise Tax Board, owed regardless of income |
| Franchise tax due date | 15 April | Form 3522, for the current tax year |
| LLC fee — gross receipts $250k–$499,999 | $900 | In addition to the $800; Form 3536 due 15 June |
| LLC fee — $500k–$999,999 | $2,500 | In addition to the $800 |
| LLC fee — $1m–$4,999,999 | $6,000 | In addition to the $800 |
| LLC fee — $5m and above | $11,790 | In addition to the $800 |
| Annual return | Form 568 | Filed with the Franchise Tax Board |
The Oral Agreement Problem, Precisely Stated
California’s recognition of oral and implied operating agreements is not a drafting accident. It reflects a policy choice that members who have genuinely agreed on how to run their company should not lose that agreement because nobody typed it up.
The limit is in § 17701.10(d). A short list of statutory provisions may only be varied by a written operating agreement, and § 17704.08 — the company’s obligation to reimburse a member for payments made on its behalf and to indemnify against debts and liabilities incurred in the company’s business — is on it.
Picture two members running a California construction LLC. A supplier is owed $40,000 and one member pays it personally to keep the job moving. Their understanding, discussed many times and never written, is that the company reimburses whoever fronts money. That understanding is an operating agreement under § 17701.02. But because reimbursement and indemnification fall under § 17704.08, and because § 17701.10(d) requires writing to vary those provisions, the members are left with the statutory default rather than their own bargain — and if the default does not reach their situation, the member who paid is arguing from nothing.
The lesson is narrow and useful: in California the question is not whether you have an operating agreement. It is whether the specific provisions you are relying on are among those the statute insists be written.
The $800 That Never Goes Away
Every LLC organized in California, and every out-of-state LLC doing business in California, owes an annual minimum franchise tax of $800 to the Franchise Tax Board. It does not scale with revenue. It is owed by a company that lost money, by a company that never traded, and by a dormant entity nobody has thought about in three years.
Above $250,000 in California gross receipts, a separate LLC fee stacks on top: $900, then $2,500, then $6,000, then $11,790 at the top band. Note that this fee is calculated on gross receipts, not on profit, so a low-margin business can owe a substantial amount in a year it barely broke even.
The consequence for the operating agreement is concrete. Members should decide in advance who funds the $800 in a year with no distributions, and how the LLC fee is allocated among members whose activities generated different shares of the gross receipts. Leaving it unaddressed produces the most common California LLC argument: a company with no cash, a tax bill that arrives regardless, and no agreed mechanism for who writes the cheque.
It is also the reason California owners should close entities they no longer use rather than letting them sit. An unused California LLC is an $800 annual subscription.
Provisions That Matter Most Under California Law
- Indemnification and reimbursement, in writing. Section 17701.10(d) requires a written agreement to vary § 17704.08. If members expect the company to cover debts they pay personally, this clause must exist on paper.
- Franchise tax funding mechanism. Who funds the $800 in a year with no distributions, and how the gross-receipts LLC fee is allocated between members.
- Management designation. Member-managed or manager-managed, and the scope of a manager’s authority to bind the company. California’s Articles record management structure only in limited terms.
- Statement of Information responsibility. The initial filing is due within 90 days and then biennially. Name who is accountable.
- Capital contributions and capital calls. What was contributed, what is promised, and the consequence of a missed call — particularly relevant when the call exists to cover the franchise tax.
- Distributions. Allocation, timing, and the interaction with California’s restrictions on distributions that would leave the company unable to pay its debts.
- Transfer restrictions. The default gives a transferee economic rights without membership; state the consent required for full admission.
- Dissolution mechanics. Because a dormant California LLC keeps accruing $800 a year, the agreement should make winding up a decision the members can actually reach.
Mistakes Specific to California LLCs
- Relying on an oral understanding about reimbursement. Section 17701.10(d) requires a written agreement to vary § 17704.08. An unwritten reimbursement deal is exactly the provision California will not enforce as the members intended.
- Leaving a dormant LLC registered. The $800 minimum franchise tax accrues whether or not the entity does anything. Dissolving an unused California LLC is usually cheaper than one more year of holding it.
- Forgetting the LLC fee is on gross receipts. A business with $1.2m in revenue and thin margins owes $6,000 on top of the $800, calculated on receipts rather than profit. It surprises people every year.
- Missing the 90-day Statement of Information. The initial Statement of Information is due within 90 days of registration. It is a $20 filing that becomes a compliance problem when skipped.
Frequently Asked Questions
Does California require an LLC operating agreement?
California does not require one to be filed, and § 17701.02 recognizes oral and implied agreements. But § 17701.10(d) allows certain provisions — including indemnification and reimbursement under § 17704.08 — to be varied only by a written agreement, so a written document is the only way to control those terms.
How much does it cost to form an LLC in California?
$70 for the Articles of Organization (Form LLC-1), plus $20 for the initial Statement of Information due within 90 days. The recurring cost is the $800 annual minimum franchise tax.
Do I have to pay the $800 if my LLC made no money?
Yes. The $800 minimum franchise tax is owed by every LLC organized in California or doing business in California, regardless of income, and applies to dormant entities as well.
What is the California LLC fee on gross receipts?
A separate charge on top of the $800, tiered by California gross receipts: $900 from $250,000, $2,500 from $500,000, $6,000 from $1,000,000, and $11,790 at $5,000,000 and above. It is calculated on receipts, not profit.
Can a California operating agreement be oral?
Yes. Section 17701.02 defines an operating agreement as the members’ agreement whether oral, in a record, implied, or a combination. The exception is the list in § 17701.10(d), where a written agreement is required.
Can a California operating agreement eliminate fiduciary duties?
No. Section 17701.10 prohibits eliminating the duties of loyalty and care and the obligation of good faith and fair dealing, and bars unreasonably restricting a member’s right to maintain an action. California is considerably more restrictive than Delaware here.
How often is the Statement of Information filed?
Within 90 days of initial registration, then every two years. The fee is $20 each time.
Is the operating agreement filed with the Secretary of State?
No. It is internal. Only the Articles of Organization and the Statement of Information are public record.
Download the Free California LLC Operating Agreement
The template below is the California version, formatted for both print and editing. Fill the bracketed fields, have every member sign, and keep a signed copy with the company records. It is an internal document — you do not file it with the state.
Related Templates
California’s restrictive posture on fiduciary duties is the mirror image of the Delaware LLC operating agreement template, which is worth reading if someone has suggested you form in Delaware instead — doing so while operating in California generally means paying the $800 anyway. For the other state that legislates hard about written agreements, see the New York LLC operating agreement template. All states are indexed in the LLC operating agreement by state hub.