Launching a new business is exciting. You can create and grow your idea into a revenue stream, and you’re also able to collaborate and learn from other professionals along the way. While getting your company off the ground can seem like an overwhelming task, the process isn’t as complicated as you might think when forming an LLC.
If you’re planning to form a new Oregon Limited Liability Company, you’ll be happy to know that you can have your business legally formed and registered in a few simple steps. Completing the formation process can seem daunting, but we promise it’s really straightforward when forming an LLC — and we’ll be right here to walk you through each step.
Use this guide to navigate through the LLC setup process in Oregon. We’ll link you to the resources you need and let you know if we recommend any additional consulting. We’ll also provide insights that offer examples for many of the steps to help you better understand how to apply the directions to your business.
Let’s get going — we know you have no time to waste!
The 5 steps to form an LLC in Oregon:
When forming an LLC in Oregon, you’ll need to make sure your company adheres to a few legal requirements, fill out the necessary paperwork, and set yourself up to pay taxes. You’ll also need to register your business with the state government, so it can officially recognize your LLC and pass along important legal and business communication.
However, before you can officially register your LLC in Oregon, there’s some work to be done. This involves deciding on an available LLC name for your company (and reserving this name if you choose), selecting a registered agent to act on behalf of the company, creating an Operating Agreement to determine how your LLC will be run and getting set up with the IRS.
While each step is simple, we know the process can feel overwhelming. We’ll take you through every step of forming your new LLC in Oregon to make it as painless as possible.
Step 1: Name Your Oregon LLC
Choosing your company’s name is an important first step. Your name is how customers and clients will remember you, and it will also be what draws in prospective buyers as you begin marketing. While your name needs to be catchy and memorable, it also should fit your industry. If you’re forming an LLC with partners, you’ll want their input to ensure everyone agrees on a company name. Lastly, but most importantly, you need to make sure your name is compliant with Oregon’s business laws.
We recommend making a shortlist of three to five names (or more) before checking to see which names are compliant. You have to make sure that your LLC’s name does not already belong to another company in Oregon. This is where the list comes in handy. You’ll log on to the Oregon Business Name Registry and search for the names on your list. If they’re already taken, cross them off. If not, narrow your list down. Lastly, make sure you review the additional requirements for naming your LLC in Oregon before settling on a name. From there, you’ll decide on the remaining names on your own or with your partners until you have the name that best fits your company and meets Oregon’s compliance laws.
When you have your name ready, you’ll also need to decide on an LLC designator. An LLC designator is a suffix added to your company name to denote that your business is an LLC. This means you’ll need to add a suffix like “LLC” to the end of your company name. You have three choices: spelling out “Limited Liability Company” in full or using the abbreviation “LLC” or “L.L.C.”
Once you have your designator chosen, you can reserve your company’s name to ensure no one else takes it while you’re finishing the registration process.
To reserve a company name, you’ll need to create an account on the Oregon Secretary of State’s Business Registry website. From there, you’ll gain access to the Name Reservation form, which can be submitted online. This form has a $100 filing fee you’ll also need to pay.
While the above covers the basic steps for selecting an LLC name, there are some other factors you’ll want to consider. For instance, if you want to create a company website, you’ll need to register your LLC name as a domain (or find an available domain). You can do a fast domain search to determine if your URL is free. Once you’ve found a domain that makes sense, reach out to a professional company like ZenBusiness to help you reserve your new domain.
In addition, you might be interested in securing a DBA or finding out if there are trademarks on your company name. A DBA (“Doing Business As”), also known as an “assumed name,” is an alternate name you can use for your business. To secure a DBA, you’ll go back through the name search to ensure the name you’ll use is available. If it is, you’ll fill out a new Assumed Name Registration form. The fee for filing this document is $50, and the filing is good for two years.
At the same time, if no trademarks exist on your name, you can register a trademark with the Oregon state via the Oregon Trade and Service Mark Registration form. It’s often easier and quicker to register a trademark at the state level. However, to broaden your protection, you can register your trademark with the United States Patent and Trademark Office, especially if you plan on doing business outside of Oregon. You can also use their search engine to make sure your desired business name isn’t already taken.
Step 2: Appoint a Registered Agent in Oregon
Once you have your company name decided, you’ll next want to find a registered agent for your Oregon LLC. A registered agent works with your LLC to receive important paperwork and updates from the Oregon Secretary of State.
Every LLC in Oregon is required to designate a registered agent for their company. Your registered agent can be an individual or business entity, as long as they meet Oregon requirements. They’ll need to work in-state and be available for contact during normal business hours (typically 9 a.m. to 5 p.m. local time). The street address of their business cannot be a P.O. box or something similar.
Can you be your own Oregon registered agent? Technically, yes. Some companies decide to have a partner or owner serve as their registered agent, but this isn’t always a good idea. Since the government will be reaching out to this agent with important legal documents (potentially including service of process), you won’t want to have this happen at your office, where you’ll be meeting with clients. On top of this, serving as your own registered agent means that some of your private information will become public records.
Here are a couple more reasons why you might not want to act as your company’s registered agent:
- If you are designated as your LLC’s registered agent, and your office address changes, you’ll be required to refile forms and pay additional filing fees. If you work with an outside agent service, you can change your address as much as you need to without refiling registered agent paperwork.
- If you act as your own registered agent, you’ll be required to submit personal information to the public record. If you don’t have an official office, this might have to be your home address. An outside registered agent service can ensure you retain your privacy.
That’s why many LLCs choose to hire an outside registered agent service. If you have an accountant, they might serve as your registered agent, or you can opt for a professional registered agent service to pass along all of your legal documents and paperwork to ensure you remain in good standing.
Step 3: File Oregon Articles of Organization
Now that you have your official company name, and you’ve chosen a registered agent, you’re ready to register your LLC with the state of Oregon. You’ll do this by submitting your Articles of Organization through the Oregon Secretary of State website. You’ll need the below information handy to complete this form:
- Your LLC’s name. Enter your LLC’s official name, including the LLC designation you selected.
- Your LLC duration. Check “perpetual” if you do not have an end date in mind. Otherwise, specify the date when the LLC will dissolve.
- Your LLC’s principal office address. Enter the primary operating address for your LLC. This could be your office address or residential address.
- Your registered agent’s name and address. Enter your registered agent’s full legal name and operating address (located in Oregon). You can also designate a secondary address if their mailing address is different from their operating address (both should be in-state).
- Your LLC management structure. Enter whether the owner(s) will manage your LLC or if appointed or hired manager(s) will run the business.
- LLC industry. Enter the type of industry your company falls into.
- Benefit company selection. Check this box if you’re forming a Benefit company.
- List of LLC members and managers. Enter the names and addresses for all of the LLC’s members (owners) and any managers as they apply to your company.
- Select an individual with direct knowledge. Enter the name and address of one member or manager who will have direct knowledge and understanding of the company’s operations.
- Organizer signatures. This is where you and any other owners will sign.
The filing fee for this form is $100. You can submit this form directly online (Oregon encourages online filings) or mail it to the below address: Oregon Secretary of State Corporation Division 255 Capitol St. NE, Suite 151 Salem, OR 97310-1327 If you need additional assistance, be sure to consult the Oregon state directions for filing your Articles of Organization.
Step 4: Create an Operating Agreement
At this point, you’re ready to start creating your LLC’s Operating Agreement. This agreement is not required by law, but it’s strongly encouraged for all businesses. Your LLC’s Operating Agreement will clearly lay out how your LLC is managed and different operational procedures to be followed. These agreements are particularly important for LLC partnerships, as you can create the way that voting structures and financial profits are managed. If you’re the only member of your company, an LLC Operating Agreement might seem unnecessary, but it can be very important. This document will protect your business if you’re ever incapacitated or unable to manage your LLC. This will allow your company to continue operating as you’ve outlined. Without this agreement, your company will be run according to state law, which could be a poor management strategy for your LLC. Here are some other reasons why you should consider drafting an Oregon LLC Operating Agreement:
- An Operating Agreement can further delineate your company and personal finances, so your personal assets are never on the hook for company liabilities or debts.
- An Operating Agreement can make it easier to resolve or prevent conflict since management structures and voting guidelines will be clearly outlined within this document.
- An Operating Agreement makes your company’s operational practices clear to all new members, investors, and managers, so they’ll know how your company is run before agreeing to join.
Although filing your Operating Agreement is not a state requirement, it’s important to have copies available in case they’re ever needed.
Step 5: Apply for an EIN
Once your Operating Agreement is complete, you’re ready to move on to the fifth and final step — registering for an EIN and checking to see if your company needs any special permits or licenses.
To get started, you’ll need to register your LLC with the Internal Revenue Service (IRS) by requesting an Employer Identification Number (EIN). You can do this online so that your LLC will be set up to pay its taxes.
Your company’s EIN is equivalent to a Social Security number, but for businesses. With your EIN, you can handle all of your taxes, set up business bank accounts for your company, and hire employees.
If you only have one member in your LLC and no employees, you likely don’t have to register for an EIN, although you might want to. Having an EIN can offer benefits, such as making it easier to separate your company’s taxes and assets from your personal taxes and assets.
You can apply for an EIN directly on the IRS website. In a matter of minutes, you’ll be able to register and receive your EIN. Best of all, there’s no cost for this service, and you can begin using your EIN right away.
Once you’re registered with the IRS, you’ll want to find out if there are any special permits or licenses you’ll need to operate in Oregon. A general business license is not required in this state, but your industry or county may require one. You can find out if you’re required to apply for any special licenses or permits at the state level on the Oregon Secretary of State Business Information Center page. There could also be licensing your LLC requires on the local or federal level, so you’ll need to do some careful research to find out what you need.
How much does it cost to start an LLC in Oregon?
It’s important to estimate the upfront costs of starting a new LLC in Oregon. To help, we’ve compiled the expected costs of the primary administrative tasks you’ll need to complete:
- Reserving your business name (optional): $100
- Filing your Articles of Organization: $100
- Applying for an EIN: $0
You should expect to pay a minimum of $100 in administrative fees to get your LLC up and running in Oregon. This does not include expedited fees, permit costs, or consultant and accountant expenses. You’ll also need to be aware that you’re expected to file an annual report in Oregon, with some basic information about your LLC each year. You can file this report directly online. You’ll need to pay a $100 filing fee, which also renews your LLC’s registration.
What are the benefits of an LLC in Oregon?
LLCs are popular business structures — particularly for small businesses and first-time business owners. There’s a good reason for this. LLCs offer many legal and tax benefits while providing a flexible management style. Here are the main reasons why most business owners opt to form an LLC:
- They want to separate their business finances from personal assets. An LLC makes it easier to keep your business and personal profits, debts, and liabilities completely separate.
- They want more flexibility in how their LLC is managed. Other business types have strict rules and regulations to adhere to, but LLCs have fewer requirements, allowing you to run your business the way you see fit.
- They don’t want to deal with many reporting requirements. LLCs have much fewer reporting requirements than corporations, making them easier to manage.
- They don’t want to be taxed twice. LLCs provide an exemption from double taxation by only requiring owners to pay taxes on LLC profits when filing their individual taxes, rather than requiring this tax on both individual and company tax filings.
How is an Oregon LLC taxed?
While you already know that you’re protected from double taxation when running an Oregon LLC, you’ll want to be aware of a few additional tax requirements. You’ll need to decide how your LLC should be taxed, and we recommend talking to an experienced accountant if you have any questions. Let’s take a quick look at all of the Oregon tax requirements for LLCs:
- Self-employment tax: If you’re an owner of the LLC, the IRS will consider you self-employed. This means you’ll be expected to pay into Social Security and Medicare, otherwise known as self-employment taxes.
- For LLCs that choose to be taxed as a corporation: LLCs that opt to be taxed as a C corporation will need to fill out an 8832 tax form via the IRS website. To file as an S corporation, you’ll need Form 2553.
- For LLCs that want to avoid tax penalties: No matter how you choose to be taxed, you will have to pay taxes on your income. These taxes will be due when you file each year, but to avoid hefty fees, it’s important to make estimated quarterly payments throughout the year, for both state and federal taxes. You can submit your Oregon taxes and federal taxes online. If you have employees, you’ll be required to withhold taxes from their paychecks. This means you’ll need to set up a withholding account with the Oregon Department of Revenue to pay this money to the IRS.
- For LLCs that sell goods: Many states require you to obtain a sales tax license and account; however, there is no general sales tax in Oregon, so you can skip this step.
Oregon LLC FAQs
- What is the processing time to form my Oregon LLC?
If you file your Articles of Organization for Oregon online, your request will typically take 24 hours to be confirmed. If you file by mail, the process can take longer.
- Do I need to file my Operating Agreement with the state of Oregon?
No, you are not required to file an Operating Agreement to form your Oregon LLC, but it is recommended that you create one to protect your company.
- What tax structure should I choose for my Oregon LLC?
Most LLC owners have their business taxed the default way, which is as a sole proprietorship (for single-member LLCs) or a partnership (for multi-member LLCs). This method only requires partners to pay taxes on their percentage of the profits on their personal tax returns. The LLC itself is not taxed.rnrnAn LLC might choose to be taxed as a corporation if it yields high earnings or is a large company. It’s important to understand the distinctions of being taxed as a corporation as laid out in this corporation tax guide. We strongly encourage you to talk to an accountant or tax specialist if you have any questions.
- Does Oregon allow a Series LLC?
In Oregon, you cannot form a Series LLC. A Series LLC refers to a group of LLCs that fall under one parent LLC. Most states do not allow you to form Series LLCs.
- Which licenses and insurance are required for an LLC in Oregon?
Oregon does not require a general business license to operate an LLC. You may need a special permit or license depending on your location or industry. You can review state regulations for licenses and permits through the Oregon Business Wizard.rnrnZenBusiness can also help you understand what licenses, permits, and insurance your Oregon LLC will need to remain compliant.
- How do I dissolve an LLC in Oregon?
If you decide to dissolve your LLC, you’ll need to fill out an Oregon Articles of Dissolution form. The filing fee is $100.