Your business is growing, and you’re planning an expansion to other states. It’s a good problem to have!
But it’s not quite as simple as choosing another location. Because each state has different rules and requirements for business operations, you may need a “foreign qualification” in each state where you plan to do business.
It’s a common misconception that foreign qualification is only for businesses operating outside the U.S. But in this case, “foreign” refers to any business operating in a state that isn’t the state where the LLC was originally formed.
For example, if your LLC is registered in Washington and you are looking to open a second location in Oregon, you may need to complete a foreign qualification in Oregon before you can expand there.
Important Note: If you’d like to save time and have the foreign qualification paperwork taken care of for you, many of the best LLC services can handle this task for you.
Foreign qualifying is essentially asking permission to do business in the state of Oregon. And the notion that “it’s easier to ask forgiveness than permission” doesn’t apply here. Failing to foreign qualify before starting a business in Oregon yields consequences that are far costlier than registering in the first place. If you fail to foreign qualify, your business:
Those penalties aren’t worth the risk. Not only will your LLC lose its legal footing in the state, but it will also need to pay all the accumulated fees at once, and they can add up quickly.
But if you transact business without authorization in Oregon, it won’t completely disengage your LLC from its in-state activities. Your current contracts will still be considered valid, and you will still be able to defend lawsuits in state courts.
Want to dig into the legal context for these penalties? Check out the Oregon Revised Statutes Section 63.704.
We’ve established why you shouldn’t do business without a foreign qualification. But what exactly does it mean to “do business” in Oregon? Many states are vague about this definition, but the Oregon Secretary of State’s website provides a few specifics. They say you are considered to be “doing business” in Oregon and required to foreign qualify if:
Generally, according to the site, “if you expect to profit from your activities in Oregon, you are probably doing business in Oregon.” In addition, it’s important to always stay on top of your LLC’s taxation requirements to avoid any unwelcome surprises.
If you’re unsure whether or not you need to file for a foreign qualification in Oregon, we suggest seeking legal counsel.
The foreign qualification, however, isn’t a hard and fast rule for all LLCs performing any kind of action in Oregon. Certain actions do not qualify as “doing business” and therefore don’t require a foreign qualification. Some examples are:
See all of your Oregon business activities listed here? You’re most likely exempt from foreign qualifying. However, it’s still a good idea to check the details in the Revised Statutes Section 63.701 and contact an attorney if you have any questions.
Foreign qualification in Oregon is simple if you know where to find and send your forms. If you or your legal counsel has decided to foreign qualify your LLC in Oregon, the Application for Authority is your go-to form, and you can submit it online, by mail, or in person. Find resources and directions for all three options here.
Want to get it done as quickly as possible? File online. On the Foreign LLC page, click “Register online” in the Application for Authority section. This will take you to the online filing portal, where you can create an account to continue. Then, just follow the on-screen instructions, and when you finish, you’ll be able to pay the $275 fee with a credit or debit card.
But if you’re someone who wants to leave a paper trail, download the application here. Complete it and include a $275 check, made payable to “Corporation Division.” The Secretary of State provides detailed instructions if you need assistance. Finished? Mail it to:
Secretary of State – Corporation Division
255 Capitol St. NE, Suite 151
Salem, OR 97310-1327
Regardless of your filing method, you’ll need to provide verification from the state in which your LLC was formed. This can take the form of a web-verifiable registry number or a Certificate of Good Standing (current within 60 days).
Filing for foreign qualification is a big step, so if you’re eager to see when your LLC has been approved, you can check the Secretary of State’s processing times, updated regularly on the Business homepage. At the time of this writing, online submissions were processed the same day, while mailed or faxed documents were taking about five weeks.
After your form is in and your fee is paid, sit back, take a deep breath, and pat yourself on the back. Your LLC is on its way to foreign qualification, and you’re embarking on another chapter in the life of your business.
Don’t forget that, like other states, Oregon has its own business name requirements. Make sure to follow them, or you might hit a snag in your foreign qualification process. The state requires that your LLC name:
You can also reserve your Oregon business name if you’re not quite ready to foreign qualify your LLC.
We think you should foreign qualify your LLC before you begin conducting business in a new state. If you don’t, your business could be subject to a broad range of fines and penalties for operating an LLC in a jurisdiction where you don’t have permission to do so.
You’ll typically need to wait roughly five weeks for the state to process a mailed or faxed application. However, online submissions are usually processed within a few hours.
Chances are, you’ll require at least one license or permit to operate your LLC in compliance with Oregon state law. For more information about business licenses and more in this state, check out Oregon’s State License Requirements webpage.
Yes. Whether you operate a domestic or foreign LLC in this state, you are required to file an Oregon LLC Annual Report.
The overall costs of operating an Oregon LLC can vary considerably based on the specifics of your business. However, we created a helpful guide to help you identify and plan for every expense your LLC will face in this state.
The answer to this question lies in your personal preferences, but we can give some general pointers. An attorney will cost the most by a mile, but also provides expertise you won’t find with the other options. The DIY route is free of charge but can require quite a bit of legwork and provides no peace of mind that the process is being completed correctly.
Using an LLC service means your business will be foreign qualified by professionals who know what they’re doing, while also costing significantly less than a lawyer. This “best of both worlds” attribute is what makes LLC services our preferred option.
Using an online LLC service removes much of the hassle from the foreign qualification process. With these services, all you need to do is provide them with the name, location, and industry your business operates in, along with some info about yourself and your Oregon registered agent.
The service then registers your Application for Authority with the state to qualify your LLC to do business in Oregon.
Disclaimer: The content on this page is for informational purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
Oregon Business Resources
Foreign Qualification by State
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