How to Form an LLC in Oregon in 7 Steps
A limited liability company (LLC) is a popular business structure for a new business because of personal liability protection, flexible taxation, and ease of maintenance. Knowing the requirements to form your Oregon LLC and keeping compliant with state LLC laws is essential. Follow our step-by-step guide to set up your Oregon limited liability company.
7 Steps to Start Your Own LLC in Oregon
Name Your LLC
The name of your LLC is important. Not only does the company name affect your marketing plan and efforts, but it also has legal implications. If you don't choose a business name that complies with Oregon laws on LLC names, the Secretary of State may reject your application for an LLC.
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First, your business name must differ from all other business names on record with the Secretary of State. Also, note that your LLC name must include one of the following designators or abbreviations:
- Limited Liability Company
Search For Business Name Availability. You might wonder if a name you'd like to use for your LLC has already been registered or reserved with the state. You'll have to do a name search with the Secretary of State to check for name availability. If the name search shows the name you like is unavailable, you'll need to choose another name instead.
Check for Trademark Registration. You should also check that no other business has a trademark on your name choice. This will help you to avoid infringing on another's trademark. You can search for trademark registration on the U.S. Patent and Trademark Office (USPTO) website.
Check Domain Name Availability. Finally, it's a good idea to determine if your domain name is available. It is wise to reserve your domain name now so it is available when you want to build a website for your business.
Reserve a Business Name. You can reserve a business name if you find one you like but are not ready to file the articles of organization. To reserve a name, complete the application for name registration form and mail it to the Oregon Secretary of State, Corporation Division, 255 Capitol St. NE, Suite 151, Salem, OR 97310-1327. Include a check for $100 payable to "Corporation Division." You can include a $5 fee to receive a confirmation copy of the name reservation.
Get a Registered Agent
To comply with Oregon state law, you'll need to select a person or a company to act as your Oregon registered agent. This person or company accepts legal papers and lawsuits on behalf of the LLC. You appoint a person or company that can be available during regular business hours for service of process. The registered agent for your Oregon LLC will also need to have a street address (a P.O. Box is not sufficient). Finally, your registered agent must either be an Oregon resident or a business entity authorized to do business in Oregon.
If none of your LLC owners can serve as the LLC's registered agent, you could use a professional registered agent service. A registered agent service serves as the contact between your LLC and the state and accepts any legal documents on the LLC's behalf.
File Your Articles of Organization
Your Oregon articles of organization must include the following:
- Name of the LLC
- Full address of the LLC's initial registered office and the name of the registered agent at that office
- A mailing address, if different from the LLC's address
- A statement whether LLC is managed by managers (manager-managed) or managed by members (member-managed)
- Name and address of the organizer(s)
- A statement that its existence is perpetual or the date at which the LLC will dissolve
- If the LLC will provide professional services, and a description of the services
The filing fee for Oregon LLC articles of organization is $100.
Draft an Operating Agreement
Although you're not legally required to have an Oregon LLC operating agreement in Oregon, it is a critical legal document for an LLC. LLC operating agreements contain provisions relating to members' rights and responsibilities, management structure, ownership percentages, admission of new members, voting powers, and dissolution procedures. Without an operating agreement, state LLC laws may apply in case of conflict or a dispute among organization members.
Even single-member LLCs should create operating agreements. If you ever want to open a business bank account or apply for a business loan, your financial institution will likely want to see your operating agreement. Other professionals like lawyers and accountants may also ask to see your operating agreement before providing you with services.
Get an EIN
An Employer Identification Number (EIN) or Tax ID number is a number that the Internal Revenue Service (IRS) assigns to business entities. It's similar to a Social Security number but for your business. You'll likely need one of these numbers to open a business bank account, pay federal taxes, and hire employees for your LLC. It's easy and free to apply for your EIN. You can get it done online through the IRS website.
Set Up Business and Tax Accounts
After you set up your LLC, you should register your new business with the Oregon taxing authorities. If your LLC has elected for tax status as a corporation, then your LLC must pay the Oregon excise tax. Oregon does not have a sales tax, so you are not required to collect and remit that. There will be withholding and employment taxes if you hire employees and local business licenses and permits.
File a Beneficial Ownership Information Report (BOIR)
After forming your LLC, you need to file a Beneficial Ownership Information Report (BOIR). This reporting requirement has strict timelines.
- If you create your LLC in 2024, you must file within 90 days from the day your LLC received notice of its creation/registration or 90 days from the day the Secretary of State or similar office first provided public notice of your company’s creation/registration, whichever is earlier.
- If you form your LLC after January 1, 2025, you must file within 30 calendar days from the date you receive actual or public notice of the LLC’s creation or registration.
You will prepare and file your report with FinCEN. Start the process by going to www.fincen.gov/boi and selecting “File BOIR.” In preparing your BOIR, you will need to provide information regarding your LLC, its beneficial owners, and its applicants. Your LLC’s applicants are those who directly filed the document that created or registered the LLC or were responsible for controlling the filing. Beneficial owners are people who have substantial control over the LLC and/or own a minimum of 25% of the ownership interests of an LLC.
You must pay all state and federal employment taxes if you have employees. If your business requires a license or permit, you will need to pay any required annual fees. If your LLC conducts business in other states, be sure to comply with registration and tax requirements in those states as well.
State Business Tax
If your LLC elects corporation status for tax purposes, you must pay the Oregon excise tax. Oregon calculates the excise tax on the LLC's net income with a minimum tax assessed. If your LLC is a pass-through entity where the company income goes on the members' personal tax returns, the LLC does not pay the excise tax.
State Employer Tax
If you plan to hire employees, even if the employees are also members, you must complete Oregon's Combined Employer's Registration to set up accounts for withholding, unemployment taxes, workers' benefit fund assessment, and, depending on where you operate, transit taxes. Additionally, employers must:
- Report new hires within 20 days of employment date to the Oregon DOJ Division of Child Support
- Provide workers' compensation insurance.
Sales and Use Taxes
There is no state sales tax. However, Oregon businesses that buy goods outside of the state and resell the goods in Oregon must apply for an Oregon Business Registry Resale Certificate.
Business Licenses and Permits
Oregon does not require businesses to have a general business license. However, several cities have their own requirements. The Secretary of State provides information about local agencies. Many occupations and professions in Oregon have their own licensing requirements as well. The Oregon Occupational Licensing Board provides a list.
Registration in Other States
If you want your Oregon LLC to do business in another state, you must register the LLC as a foreign LLC. Contact the state's secretary of state office for application requirements. You may need proof of your LLC's good standing, which you can request from the Oregon Secretary of State. Oregon calls the certificate of good standing a "certificate of existence." You must also follow that state's rules for setting up business tax accounts and applying for business licenses. And if you plan to hire employees in that state, you must comply with state tax laws and withholding.
Every LLC in Oregon must file an annual report to renew its registration. You can do so online through the Secretary of State. File the annual report by your LLC's anniversary date. There is a $100 state fee. If the information changes, update your LLC's address and registered agent information.
Also, file and pay your annual excise and income taxes and any annual licensing fees.