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When starting a new company, choosing a business entity is the most important decision that the founders must make. For most businesses with more than one founding member, forming as an LLC is often the best option for a number of reasons.
An LLC is an uncomplicated business structure that affords business owners legal protection by separating personal assets from business debts. Moreover, LLCs often enjoy a lower tax rate than corporations. Nevertheless, creating an LLC can get complicated depending on where you are based, with the formation process, filing fees, and continuing legal obligations differing from state to state.
The process of forming a limited liability company in Oregon is straightforward and uncomplicated. An entrepreneur should not experience major difficulties in forming their business in the state.
To avoid a misstep in the filing process, follow these steps to start an LLC in Oregon, and refer to the checklist at the bottom of the post to familiarize yourself with the legal and financial requirements for LLCs in the state.
Starting an LLC in Oregon step-by-step
1. Select a name for your Oregon LLC
Follow naming requirements
There are 2 major guidelines to follow when naming your LLC in the State of Oregon:
- An LLC’s name must be distinguishable from the names of existing business entities on file with the Oregon Secretary of State.
- An LLC’s name must contain one of the following phrases or abbreviations: “Limited Liability Company”, “LLC”, or “L.L.C.”
Check LLC name availability
Make sure that your chosen LLC name is available in Oregon using the Oregon Secretary of State Business Name Search.
Reserve your LLC name with the Oregon Secretary of State
Reserving a business name prevents another business entity from using it before you file your Articles of Organization and form your LLC in the state, so it’s a good idea to do so if you anticipate any delay in filing.
File an Application for Name Reservation with the Oregon Secretary of State online using the Oregon Business Registry in order to reserve the name for up to 120 days. The filing fee is $100.
2. Designate a registered agent
As in every U.S. state, forming an LLC in Oregon requires the appointment of a registered agent service to handle state and federal legal documents and service of process on the business’s behalf.
The registered agent must either be a state resident or business entity with a street address in Oregon OR if the individual or business is based out-of-state, they must have a business office in Oregon.
3. File Articles of Organization
An LLC is formed in Oregon through the filing of Articles of Organization-Limited Liability Company with the Oregon Secretary of State.
You can file the articles online or print and complete a form and file by postal mail. The filing fee is $100.
The Articles of Organization must provide the following information:
- LLC’s name, principal office address, and email address
- Mailing address for Secretary of State notices
- Whether the LLC is perpetual or will end at a set date
- Registered agent name and address
- Whether the LLC is member-managed or manager-managed
- Whether the LLC is a professional LLC
- LLC organizers’ names and addresses
- Name and address of an LLC member or manager
Foreign LLC registration
An LLC formed in a different state that intends to do business in Oregon must register with the Oregon Secretary of State.
Follow these steps to do business in Oregon as a foreign LLC:
- Comply with Oregon LLC naming guidelines and confirm that your LLC name is available in the state with the Oregon Secretary of State Business Name Search.
- Appoint an Oregon registered agent.
- File an Application for Authority to Transact Business–Foreign Limited Liability Company with the Oregon Secretary of State. The application can be filed online or through the mail. The filing fee is $275.
- The application must include either a Certificate of Good Standing or a Certificate of Existence from the LLC’s home state that is no more than 60 days old.
4. Draft an operating agreement
Although not a legally mandated step for forming an LLC in Oregon, drafting a comprehensive LLC operating agreement is strongly recommended for all nascent limited liability companies.
The operating agreement should do the following:
- Describe the LLC’s business structure
- Establish the individual responsibilities and obligations of LLC members
- Detail how the LLC will be run
Without an operating agreement clarifying the specific duties of its members, an LLC may face significant legal and operational difficulties.
5. Obtain an IRS Employer Identification Number (EIN)
All newly formed LLCs in the United States must acquire an Employer Identification Number (EIN) from the Internal Revenue Service (with the exception of single-member LLCs).
The nine-digit EIN is like a social security number for a business and is necessary to pay income tax, file tax returns, open business bank accounts, and perform many other important functions.
You can apply for an EIN online on the IRS website without paying a filing fee.
6. Fulfill your Oregon LLC’s additional legal obligations
Once an LLC is registered, its members must devote attention to fulfilling legal requirements that apply for the duration of the company’s existence.
File annual reports (annual renewal)
All LLCs active in Oregon must file an annual report (AKA annual renewal) with the Secretary of State each year by the anniversary of the effective date of its Articles of Organization or the date it become authorized to do business in Oregon (foreign LLCs).
The annual report must be filed online. The annual report filing fee is $100 for LLCs formed in-state and $275 for foreign LLCs.
Register with the Oregon Department of Revenue
Certain LLCs active in Oregon must register with the Oregon Department of Revenue in order to satisfy a number of state tax obligations. Although Oregon does not impose a sales tax like a majority of states, LLCs with employees must register with the DOR.
Visit the Oregon Department of Revenue website for forms and additional registration information.
Obtain business licenses and permits
Certain LLCs active in Oregon may be required to obtain one or more state or local business licenses or permits depending on their type of business and location.
Read through the Oregon Start a Business Guide provided by the Secretary of State for information on how to fulfill state business license requirements. Specific licenses can be searched for using the Oregon License Directory.
For information on local licensing requirements, contact a city or county clerk in the city or county where your LLC is located.
Oregon LLC checklist
An Oregon LLC’s name must obey the following guidelines:
- Must be distinguishable from the names of existing business entities on file with the Oregon Secretary of State.
- Must contain one of the following phrases or abbreviations: “Limited Liability Company”, “LLC”, or “L.L.C.”
Formational documents and filing fees:
- Application for Name Reservation – $100 filing fee (optional)
- Articles of Organization-Limited Liability Company – $100 filing fee
- Application for Authority to Transact Business–Foreign Limited Liability Company – $275 filing fee (foreign LLCs, only)
- An LLC is formed in Oregon through the filing of Articles of Organization-Limited Liability Company with the Oregon Secretary of State.
Additional legal obligations:
- File annual reports (AKA annual renewals) – Required for all LLCs doing business in Oregon
- Register with the Oregon Department of Revenue – Required for some Oregon LLCs, including those with employees
- Obtain business licenses and permits – Required for certain Oregon LLCs depending on business type and area