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Cost to form an LLC in Oregon - $100
Recurring Fees - $100 Annual Report Fee
Filing Time - It normally takes 1 week for the LLC paperwork to be approved in Oregon when filing by mail or 1-2 hours when filing online.
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The Limited Liability Company (LLC) is a popular business entity choice structure for many businesses starting in Oregon. The LLC provides personal liability protection and has the potential to save money on taxes. With a little research, you can learn how to form an LLC in Oregon without an attorney.
Unlike a sole proprietorship or partnership where the small business owner can be personally liable for lawsuits against the business, the LLC is a separate legal structure, protecting for the business owner’s personal assets.
Related: How Does an LLC Protect You?
Besides the liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration and management flexibility.
Forming an LLC in Oregon is fairly straightforward, but it’s nice to have some support in case you have questions or get stuck. IncFile and Inc Authority provide LLC formation guidance for only the cost of the state fees!
To form a Limited Liability Company in Oregon, file the Articles of Organization with the Oregon Secretary of State. The LLC filing fee is $100.
Approval for the LLC is typically takes less than two hours when filing online and around one week when filing by mail.
HOW TO FILE THE ARTICLES OF ORGANIZATION AND FORM AN OREGON LLC
The steps for filing online or by mail are largely the same. The screenshots show how to file online.
- Begin by creating an account on the Oregon Secretary of State’s website by clicking on “New User”.
- Click on “Start” under “Register business name, get a BIN, and other registrations/licenses”
Business Name Registration
- Begin by clicking on “Register Name”.
- Then in the drop-down menu for “Business/Organization Type”, select “Domestic Liability Company”.
- Enter the name you want for the LLC. The name of the LLC also has to differ from other entity names registered with the Secretary of State. Check on available Oregon LLC names before filing to be sure the one you want is available.
The name of the LLC must also include a designator at the end of the business name. A designator is used to describe the type of business entity. Designators that are available to use include:
- Limited Liability Company
A comma may be used after the business name and before the designator. “Cowboy Cleaners LLC” and “Cowboy Cleaners, LLC” are both acceptable.
Before settling on a name, you may want to see if a domain name is also available in order to match your business name and website address.
Enter the name along with the designator you would like to use and click on “Check Name Availability” A new page will open indicating whether the name is available or not. Even if the search comes back with the name is available, the Secretary of State’s office will also review it to be sure it isn’t being used by someone else or that it is too similar to another name.
Provide some basic information about what the business does in fewer than 250 characters. Entering something now does not force the LLC to only do that business activity forever. One way to keep the activity description more open-ended, you can enter “Any legal business activity for which a Limited Liability Company may be organized in Oregon”.
Related: How to Answer the Activity Description.
In this section, indicate how long the LLC intends to remain in existence. Most LLCs will choose a Perpetual duration, however, some businesses (usually investment related) will have a specific closure date.
Enter the preferred email address where the Secretary of State will send notifications. This doesn’t have to be an address in the business name and can be a personal one.
Mailing Address for Notices
Enter a mailing address where the Secretary of State will send notices. This address can be located anywhere or be a PO Box.
Enter a contact name and phone number should the Secretary of State need to contact someone regarding the LLC filing.
Jurisdiction and Physical Location
Principal Place of Business
In this section, enter the street address, city, state and zip code of the initial principal office. This address can be the physical address of the LLC or it can be the address where the business records are stored. You may not use a PO Box for the designated office.
To have an LLC in Oregon, a Registered Agent must be identified. The Registered Agent can either be a resident of Oregon (Select “Individual”) or a Resident Agent service (Select “Entity of Record”) that has a Registry Number from the Secretary of State. The agent must have a physical address in the state (PO Boxes are not allowed) and act as a point of contact to receive legal documents, tax notices, summons, subpoenas, etc on behalf of the LLC.
Even though the business owner can be the registered agent, their name and address become public record and with that comes a loss of privacy. This is more important for some entrepreneurs, especially when they are doing business from home.
An LLC Organizer is someone involved with the formation of the Articles of Organization. The Organizer may or may not become a member, such as a mentor, attorney or accountant, but any of the initial members can be listed as an organizer.
At least one organizer must be entered.
Individuals with Direct Knowledge
The Oregon Secretary of State requires that at least one person who is a member or manager of the limited liability company or an authorized representative with direct knowledge of the operations and business activities be on file.
Enter at least one person’s name and address.
Statement of Management
This question asks how the LLC will be managed. The two choices are:
Member-Managed – An LLC with members who have an active involvement in the management of the LLC. Most LLCs fall into being member managed.
Manager-Managed – An LLC whose members hired a manager to run the LLC, similar to a CEO of a corporation.
Select either “Member-Managed” or “Manager Managed”
This is an optional section to include the names, contact information, and title of the members and managers of the LLC. Some banks will request this information before allowing LLC bank account signing authority.
Professional Services Rendered
If the LLC offers services that require state licensing, enter “Yes” and choose from the list of professions. Some common services that require licensing include accountants, acupuncturists, architects, attorneys, chiropractors, dentists, engineers, landscape architects, podiatrists, psychologists, and real estate appraisers. For more information about licensed professions in Oregon, see Step 5: Licenses and Permits.
This is an optional section and not used by most LLCs. Here you would include additional rules for the operation of the LLC.
There are two boxes that are available to check and have the LLC adopt.
Indemnification – The company elects to indemnify its members, managers, employees, agents for liability and related expenses under ORS 63.160 to 63.170. Many LLCs will elect the indemnification clause.
Benefit Company – Not as common for an LLC to select, but a benefit company is a blend between a not-for-profit and for-profit company. There are some requirements to be an Oregon benefit company.
Review that all the information is correct. If there are no corrections, click “Continue”
Title and Signature
Enter the title of the LLC’s organizer, select their name and have them sign by checking the “Sign” box. Click “Submit” to continue.
Pay and File
Pay and file the Articles of Organization.
Companies like IncFile and IncAuthority help guide you to make sure it’s done right and you only pay the normal state fees.
Check out our reviews of popular LLC formation services to learn more.
Tasks After Forming Your LLC
Once the LLC has been formed, there are a few additional steps to take care of. Below is a list of the most common tasks.
Prepare an Operating Agreement
The operating agreement is a document that governs the framework of an LLC. This document covers items like ownership rights, member responsibilities, how profits and losses are distributed and more.
Most states do not require an LLC to have an operating agreement but it is still worth considering. Without an operating agreement:
- The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit
- Member’s personal liability protection may be diminished
- Members may not have a full understanding of their roles and responsibilities which could lead to costly disputes in the future
Related: Oregon operating agreement template
Obtain an EIN
The EIN or Employer Identification Number is a unique 9-digit number for a business. Similar to a social security number for an individual, the EIN identifies business entities for tax purposes.
The EIN will be needed in order to open a bank account, register for business licenses and permits, file tax returns, pay payroll taxes and more.
Related: How to Apply for an EIN
Open an LLC Bank Account
Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.
Several documents will be needed to open a business bank account such as:
- A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
- Copies of the original formation paperwork from the state showing the creation of the LLC.
- Driver’s licenses of the members.
- Depending on the age of the LLC, a Oregon Certificate of Good Standing may be needed to prove the LLC is active and in good standing with the state.
Apply for Business Licenses and Permits
Depending on what your business does and where it is located, there will likely be a variety of business licenses and permits to register for before starting. Some common registrations include:
- Business License – Some cities require businesses to obtain licensing before they can start. In some cases, even home-based businesses must have licensing in order to legally operate.
- Professional License – Certain services such as barbershops, accountants, salons and others must be licensed.
- Business Identification Number – All businesses must obtain a Business Identification Number from the Oregon Department of Revenue.
File Annual Reports
LLCs are required to file an annual report with the Oregon Secretary of State. The annual report updates ownership information and other details.