Is it cheaper to form an LLC in California than Delaware?

California's filing fee is lower ($70 vs $110), but that's not the full picture: operating in Delaware means also registering as a foreign LLC there ($200) and paying a California registered agent. Realistic first-year cost is roughly $420 for the California route versus $110 for forming in Delaware.

Can I form my Delaware business in California?

Yes. Any Delaware business can form its LLC in California. But if the business operates in Delaware, it must also register there as a foreign LLC ($200 filing fee) and maintain a registered agent in California, so you take on two states' fees and filings instead of one.

Does California have better asset protection than Delaware?

Not meaningfully. Both states provide charging-order protection for LLC members, and neither offers a decisive asset-protection edge for a typical small business. Sound insurance and clean separation of business and personal finances matter more in practice.

State Comparison

Delaware LLC vs California LLC (2026)

Written for owners based in Delaware.

Verdict: for most owners, form where the business is based

This is one of the few comparisons where Delaware is the cheaper state outright. California's Secretary of State takes only $70, but the Franchise Tax Board's $800 annual tax lands in year one and every year after, putting first-year cost at $880 against Delaware's $510. The $800 keeps running on a dormant company until the LLC is formally cancelled. Delaware's own flat tax is $400, and forming in California anyway means paying $200 to register that entity back into Delaware and owing the $400 as well.

Based in California? Read California LLC vs Delaware LLC →

Compare Delaware LLC vs California LLC on filing fees, taxes, privacy laws, and annual costs. Find out which state is actually better for your business.

By Edmond Hui · Last updated: September 23, 2026

If your business is based in Delaware, a Delaware LLC needs no foreign registration there; a California LLC run from Delaware generally must also register in Delaware as a foreign LLC (Delaware's $200 filing fee). If your business is based in California, a California LLC needs no foreign registration there; a Delaware LLC run from California generally must also register in California as a foreign LLC (California's $70 filing fee). An LLC formed in one of these states and run from the other owes whatever filings, fees and taxes each state requires. A Delaware LLC runs $510 in year one and $400/yr after; a California LLC runs $880 and $810/yr. See the full breakdown below.

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Factor	Delaware	California
Filing Fee	$110	$70
Processing Time	Not published by the state	Live queue, not fixed
Annual Report Fee	None ($400/yr entity tax instead)	$20 (biennial)
Annual Report Due	None required	Anniversary month
State Income Tax	Yes	Yes
Anonymous LLC	Yes	No
Publication Requirement	No	No
Foreign LLC Cost (if forming out-of-state)	N/A, you're in your home state	$200 + registered agent ~$150/yr

Full fee breakdown for either state: Delaware LLC cost and California LLC cost. Owner privacy options for either state: Delaware anonymous LLC guide and California anonymous LLC guide.

Business Climate: Delaware vs California

Factor	Delaware	California
5-year business survival rate	48.1% (#37 of 51)	53.7% (#12 of 51)
Business application growth (2026 YTD (Jan to Jul) vs 2025 YTD (same months))	+2.5% YoY (#33 of 51 by volume)	+14.7% YoY (#2 of 51 by volume)

Sources: U.S. Bureau of Labor Statistics, Business Employment Dynamics · U.S. Census Bureau, Business Formation Statistics (BFS)

See the full 50-state survival ranking.

Compare LLC Costs: Delaware vs California

State A

State B

Delaware

✓ Cheaper Long-Term

Formation fee$110

Annual report feeNo report required

State entity tax$400/yr, Annual LLC Tax (alternative entity tax)

Report dueNone required

Processing timeNot published by the state

Late penaltyNo report to file late. The annual tax carries its own penalty

California

✓ Cheaper Upfront

Formation fee$70

Annual report fee$20 / 2 yrs

State entity tax$800/yr, Annual LLC Tax (minimum franchise tax)

Report dueFormation month, biennially

Processing timeLive queue, no fixed turnaround

Late penalty$250

Total Cost

Delaware

California

1 Year

$510

$880

3 Years

$1,310

$2,500

5 Years

$2,110

$4,120

Will you operate outside your home state?

A figure shown as "from" is the least the state can charge, not a price. Tennessee's report is $300 for up to six members and $50 for each member above six, its franchise tax is the greater of $100 or 0.25% of Tennessee net worth, Wyoming's report is the greater of $60 or $.0002 per dollar of in-state assets, Kentucky's entity tax is $175 up to $3 million of gross receipts and graduated above it, and New York's annual filing fee is graduated on New York source gross income. A total that contains one of those is shown as "from" for the same reason. Costs include every mandatory state charge: the filing fee, the report fee (annualised where a state files biennially), any state entity-level tax shown in its own row above, a one-time publication cost where the state publishes a rate for it, and any one-time registration charge a state requires before the LLC may trade. Two exclusions follow from that wording. Arizona and Nebraska require publication and publish no rate, so no newspaper cost is carried for either and their totals are not the whole cost. Alaska's $50 annual state business licence is a separate charge from the Secretary of State fees and is not carried here either. Annualising makes the 1, 3 and 5 year rows a cost of ownership rather than a payment schedule: a biennial state charges its whole report fee in the years it falls due and nothing in between. Entity-level taxes that only apply after a corporate election, or above an owner or income threshold, are excluded and flagged on the state's own cost page. New York's publication cost is carried at a $250 floor, roughly $200 of newspaper cost in a low-cost county plus the $50 Certificate of Publication fee. No county-clerk-designated New York City newspaper publishes a rate card, so the four-figure NYC estimates in wide circulation cannot be traced to a primary source and are not asserted here; budget for materially more than the floor if you file in a NYC county. Every fee was verified against the state's own fee schedule, statute, or revenue authority on 29 July 2026. Excludes registered agent and legal fees. For informational purposes only, not legal or tax advice.

Filing Fees & Formation Costs

Delaware charges $110 to form an LLC, while California charges $70. California is $40 cheaper upfront. The cost that usually gets overlooked: if you form in California but operate in Delaware, you must also register as a foreign LLC in Delaware (a $200 filing) and maintain a registered agent in California (typically around $150 per year). That puts the realistic first-year cost of the California route at roughly $420, versus $110 for simply forming in Delaware. Speed isn't a basis for choosing between them: neither Delaware nor California publishes a standard processing time, so any figure comparing the two is guesswork.

Taxes: Delaware vs California

Both Delaware and California levy a personal income tax on pass-through business income, and your LLC's profits will be taxed where you live and operate. Forming in California doesn't change what a Delaware-based owner pays. Delaware LLCs owe a flat $400 annual LLC tax (no report required). California LLCs owe an $800 minimum annual franchise tax to the Franchise Tax Board, plus an LLC gross-receipts fee above $250,000 of California income.

Privacy & Asset Protection

Delaware, your home state, actually offers more formation privacy than California: Delaware allows anonymous LLC formation, while California requires owner or manager information on public filings. The biennial Statement of Information (Form LLC-12) discloses managers or, if member-managed, at least one member, all public. Both states provide charging-order protection for LLC members, and for most small businesses the practical difference in asset protection between the two is minimal. From a privacy standpoint there's no reason for a Delaware-based business to form in California.

Annual Maintenance Costs

Delaware LLCs file no annual report at all, and California LLCs file a biennial report ($20, due in the anniversary month, every two years). If you form in California while operating in Delaware, you maintain filings in both states, California's report, though Delaware asks for nothing on the foreign-registration side, and pay a California registered agent roughly $150 per year. Counting report fees, the agent and any entity-level tax, that brings the California route to roughly $970 a year, versus about $400 to keep a domestic Delaware LLC in good standing. The taxes inside those totals: Delaware LLCs owe a flat $400 annual LLC tax (no report required). California LLCs owe an $800 minimum annual franchise tax to the Franchise Tax Board, plus an LLC gross-receipts fee above $250,000 of California income.

When California Actually Makes Sense

Forming in California makes sense in a few specific situations: your business genuinely operates in California, with a real office, employees, or property there, or you're relocating to California in the near future. For a typical small business based in Delaware, none of these usually apply. Registering a California LLC to do business back home means $200 in Delaware foreign-registration fees, on top of California's $70 formation fee, while Delaware itself never asks for an annual report at all. Delaware already allows anonymous formation, so the privacy argument for California doesn't apply to a Delaware-based owner. Trading Delaware's no-annual-report status for California's filing calendar is a step backwards for most owners. When in doubt, form where you actually do business.

Frequently Asked Questions

: California's filing fee is lower ($70 vs $110), but that's not the full picture: operating in Delaware means also registering as a foreign LLC there ($200) and paying a California registered agent. Realistic first-year cost is roughly $420 for the California route versus $110 for forming in Delaware.
: Yes. Any Delaware business can form its LLC in California. But if the business operates in Delaware, it must also register there as a foreign LLC ($200 filing fee) and maintain a registered agent in California, so you take on two states' fees and filings instead of one.
: Not meaningfully. Both states provide charging-order protection for LLC members, and neither offers a decisive asset-protection edge for a typical small business. Sound insurance and clean separation of business and personal finances matter more in practice.
: It depends on where the business is based. For a Delaware-based business, Delaware: forming where the business is based keeps costs and compliance simple, and California is worth considering only if you actually do business there. For a California-based business, the same reasoning points to California.
: Speed isn't a basis for choosing between them: neither Delaware nor California publishes a standard processing time, so any figure comparing the two is guesswork. Whichever you pick, remember that forming in California while operating in Delaware means you're not fully set up until the Delaware foreign registration is also processed, so the out-of-state route is rarely the faster path end to end. If your timing is genuinely fixed, buy the state's expedite tier rather than relying on a standard turnaround.

Comparison chart of forming an LLC in Delaware versus California, contrasting filing fees, annual report cost and ongoing obligations across 8 factors. — Delaware and California side by side on the factors that decide where to form. Source: MyStateLLC 50-state cost dataset, verified against each Secretary of State's published fee schedule, July 2026.

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More State Comparisons

Delaware vs Colorado →Delaware vs Connecticut →Delaware vs Florida →Delaware vs Wyoming →California vs Wyoming →

Delaware LLC Guide →California LLC Guide →

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Sources

Each entry below is a document recorded in our verified sources, and each entry says what the document is. Some statutory text is read from an accurate mirror rather than from the state's own host, and those say so. Where we hold the citation but no stable public link, the citation is printed on its own rather than pointed at a guessed address.

Delaware statute: 6 Del. C. § 18-1107(b) (annual LLC tax)
corp.delaware.govDelaware Division of Corporations: business entity filings
corpfiles.delaware.gov/AugustFee2024.pdfDelaware LLC filing fees
sos.ca.gov/business-programs/business-entitiesCalifornia Secretary of State: business entity filings
sos.ca.gov/business-programs/business-entities/forms/limited-liability-companies-california-domesticCalifornia LLC filing fees

Edmond Hui · Founder, MyStateLLC

Edmond Hui is a software engineer and serial entrepreneur based in New York who has founded multiple online businesses across e-commerce, media, and information publishing. Before transitioning into tech, he spent years as a commercial real estate professional closing deals totaling over 100,000 square feet, giving him firsthand experience with business formation and entity structuring. He built MyStateLLC to provide the free, state-specific LLC guidance he wished existed when forming his own companies.