[athms]

Can we stop with the hyperbole?

The fee isn't that much for California. I could see it as expensive if it was in a cheaper state. Also, if somebody is only making $20K annually running a cleaning service in California, they need to run it as a sole proprietorship, find another line of work, or move to a different state.

I made $15K in the late 1980s in California while living paycheck to paycheck. I don't see how anybody can live on $20K in 2021. This hypothetical person would make more money working at McDonald's.

[athms]

For the idiots down voting me:

The California state minimum wage is $13 for employers with 25 or less employees, $14 for employers with more than 25. A person would make more money working full time at a fast food establishment than running a cleaning service if their are making only $20K annually. You would have to go back several years when the minimum wage was less than $10.

I ran a consulting business for years as a sole proprietor. It is a viable operating entity, especially for one person. I also had a business liability policy, which you will also want as a single member LLC. It is actual quite easy to pierce the liability protection that an LLC offers, especially for single member companies because many people intermingle assets and debts, such as when personally guaranteeing a loan. If you injure somebody while on the job or engage in professional malpractice, the LLC shield won't protect you. And finally, fraud; if you are using the LLC as a buffer to commit illegal acts, a court will find the company is nothing more than your alter ego and hold you personally responsible.

If you are a software developer, run your business as a sole proprietor until you are ready to sell your product or hire employees, then convert the business to an LLC. You will still get the first year waiver.