How To Start An LLC In Oregon

If you are in Oregon, you may be considering going the route of starting an LLC. As is the case in any state, however, this requires that you follow the stipulated procedures to have your business registered and acknowledged.

If that’s your worry, you’ve come to the right place since the information provided below will tell you all you need to know about forming an LLC in Oregon.

By the time you’re done reading, not only will you understand that process, but you will also learn what’s necessary to maintain your LLC and dissolve it should that time come around.

StateOregonNevadaWashingtonCaliforniaUS Average
Population4,237,2563,104,6147,738,69239,237,8366,619,825
LLC Filing Fee$100$425$200$70$130.38
LLC Annual/Biennial Fee$100 (every year)$350 (every year)$60 (every year)$800 (every year) + $20 (every 2 years)$89.34 (every year)
Corporate Tax Rate6.6-7.6%0%*0%*8.84%5.60%
Nominal GDP per capita$62,867$61,375$86,265$85,546$64, 773.08

Before You Set Up An LLC In Oregon

As you get ready to start forming an LLC in Oregon, it helps to have a bird’s eye view of the process that you will be using. It boils down to a six-step process, which looks like this:

  • Choosing a name for your LLC
  • Finding a registered agent in Oregon
  • Preparation and submission of your Articles of Organization
  • Gathering any other required documents
  • Optionally drafting an operating agreement
  • Getting an EIN 

These are the steps that will be detailed in the article, and you will find more useful insights along the way.

How Much Does It Cost To Start An LLC In Oregon?

if you came to learn how to start an LLC in Oregon for free, you will be disappointed to know that doing so is impossible. The minimum you’ll pay is $100, and you’ll see why below.

The main cost on your radar is going to be $100, which is required to file your LLC’s Articles of Organization with the Oregon Secretary of State. Note that if you already have an LLC in another state and you’re simply expanding into Oregon, it’s counted as a foreign LLC. The registration cost here is $275 instead.

Additionally, you will be charged for the registered agent service if you decide to hire an external one. This could cost as low as $40, but may even reach up to $200 depending on the agent you choose.

The costs highlighted above are the only mandatory ones. Technically speaking, you can become your own registered agent, which would see you avoid the service charge, but it’s recommended that you hire an external one to maintain compliance and keep you in check about filing deadlines. 

Here is a look at a few more costs that are optional.

  • If you want to reserve your name before creating an LLC in Oregon, you can do so up to 120 days prior for $100. Additionally, you can obtain a “Doing Business As” (DBA) name registration for a $50 fee, which allows you to legally use a name other than your legal one.
  • You may also choose to obtain certified copies of your business documents, which you can do for $15 through the Secretary of State
  • Finally, for $10, you can obtain your Oregon Certificate of Good Standing or Certificate of Existence from the Secretary of State. This document indicates that the LLC was legally formed and is properly maintained. Lending institutions typically require it. 

With all that said, the lowest your total cost will be is $100, which is the case if you forego all optional costs and become your own registered agent for an Oregon-based LLC. 

Retaining a registered agent service would see you pay about $50, bringing your total to $150. Of course, if it’s a foreign LLC, these totals would become $275 and $325, respectively.

Steps To Start An LLC In Oregon

Steps-To-Start-An-LLC

Now, it’s time to get a more in-depth look at the steps required to start an LLC in Oregon.

  • Pick a Name for Your LLC – This step involves more than choosing a random name because you like it. The Oregon Secretary of State’s guidelines lay out the requirements, which you must follow if you have any hopes of having your LLC registered.

For example, “limited liability company” or one of its abbreviations must be included in the name, you can’t choose a name that has already been taken, and you can’t use reserved words such as “treasury” or “state department,” since these could cause people to think your LLC is a government organization.

  • Find a Registered Agent in Oregon – Having a registered agent is a legal requirement for forming an LLC in Oregon. Put simply, your agent is a business entity or individual that bears the responsibility of receiving all legal documents on your behalf. Additionally, it helps you maintain compliance and avoid late fees.

A registered agent can be either a resident of the state or a business. The latter allowance is what permits registered agent services to pick up the mantle on your behalf, provided they are authorized to do business in the state. An individual such as yourself or another company member can also be nominated for the post. You may consider ZenBusiness, or Incfile if you want reputable, established services.

ZenBusiness – $49 + state fees to register your LLC (read review)
Incfile – $0 + $50 state fees to register your LLC (read review)

For expansions of existing LLCs into Oregon, you’re going to need to fill out the foreign LLC form online or via mail, which is going to cost you $275 instead. Note that regardless of which form applies to you, their costs are nonrefundable.

Articles of Organization
  • Other Required Documents – This section purely depends on the nature of your LLC. In special cases, other requirements will be imposed on your business. For example, if you intend to operate a restaurant or a bed and breakfast, you’re going to need to complete a food service license application first. It would be in your best interest to check the state requirements depending on what industry you’re operating in.
  • Operating Agreement – Oregon is not a state that requires you to have an operating agreement in place, but drafting one is useful. Put simply, this is a legal document that speaks to how ownership and operation work in an LLC. If nothing else, it ensures that all business owners are on the same page. There have been high-profile conflicts in the past, and taking this simple step is a good way to avoid these spiraling out of hand.
  • Get an EIN – EIN is an acronym that stands for Employer Identification Number. The IRS assigns these nine-digit numbers as a standard way to identify businesses for tax reasons. You can think of it as the organizational version of your personal Social Security number. If you ever hear the terms Federal Employer Identification Number or Federal Tax Identification Number, these are alternate names for an EIN.

Apart from the IRS’ identification reason, you cannot hire employees, file and manage federal and state taxes, or open a business account without an EIN. Note that if you already have an EIN as a sole proprietorship and your business is being converted to an LLC, the IRS mandates that you get a new EIN. You can apply to the IRS online or via mail/fax for your EIN.

The Forms You Need To Register An LLC In Oregon

Technically speaking, the only forms you must have to start an LLC in Oregon are:

However, depending on unique requirements and needs, other forms may become necessary, which include:

Did You Know?

Oregon has no legal requirement for an operating agreement, but businesses are advised to complete one for owners to be on the same page. The default LLC tax treatment doesn’t necessarily need to apply to your business, as it depends on the classification used. Oregon is one of only five states that impose no sales taxThe state requires that your employees are paid at least once every 35 days.

LLC Taxes In Oregon

First, it’s essential to distinguish between federal income tax and state taxes. The former applies at the government level, while the latter at the state level.

Most LLCs do not pay any taxes directly to the federal government. Instead, members must do so independently when doing their personal tax returns with the IRS. However, this can differ based on the structure chosen for your LLC.

As a resident of Oregon, you will need to report the LLC’s income and losses on your state income return.

It’s also important for you to note that Oregon does not have a general sales tax in place.

Corporate Tax Rate In Oregon

How Long To Form An LLC In Oregon

Forming an LLC in Oregon depends on your document submission and the approval runtime. Once the Secretary of State gets back to you with the said approval, then your LLC is considered registered and operational.

If you file your documentation online, then it should only take about 5 to 7 business hours, considering the lack of transit lead time.

Alternatively, if you choose the file by mail, your approval can take anywhere between 3 and 4 weeks.

How Much Does It Cost To Run An LLC In Oregon?

Apart from knowing how much it is to start an LLC in Oregon, you may be concerned with knowing how much running the said LLC costs. 

Well, provided that the requirements for your business are standard, the only fees associated with running the business come from annual report filing requirements and your registered agent costs.

The annual fee is $100 domestically and $275 for foreign LLCs. Your registered agent will communicate its yearly charge.

What To Do After Formation

Starting your LLC is just the beginning. You want to take care of the following elements once your business is up and running:

  • Create a logo – Brand image is important, and having a logo improves recognizability.
  • Build a website/eCommerce store – In today’s tech-focused world, no business can survive without an online presence. You may want to outsource this.
  • Bank account – Maintaining business funds appropriately is non-negotiable, and a bank account helps with this. You may want a separate day-to-day account for operational expenses.
  • Business insurance – General liability insurance and workers’ compensation insurance are at the top of the list here. 
  • Hiring a business accountant – Ensure you hire a business accountant to maintain your books and ensure auditory compliance.
  • Annual reports – Apart from the cost involved, you need to ensure that your annual reports are completed and filed.
  • Press release – A press release, whether traditionally or online, is one of the best ways to get people to know about your business.

You must get all of these in place to ensure that your business is running smoothly and getting the kind of traction you want.

Resources To Start A Successful LLC In Oregon

Start Marketing Your LLC In Oregon

Your business needs to have a strong presence and stand out. One of the first things you want to do is establish what your brand identity is supposed to be and then build your marketing strategy around it.

Utilize social media to your advantage since the bulk of your customer base is likely going to be on it. Traditional and internet-based marketing methods are advised.

This is another element of your business best left to your marketing professional or an outsourced agency.

How To Dissolve An LLC In Oregon

Your operating agreement and Articles of Organization typically contain the internal rules and voting structure required for dissolving the LLC. 

Apart from the internal element, Articles of Dissolution filing is required with the Secretary of State. This comes at a $100 fee. 

Beyond that, you want to give your claimants and creditors adequate notice.

Conclusion

With all that has been covered above, you should now be familiar with how to start an LLC in Oregon. 

This includes the cost to start and maintain the business, the steps required for registration, answers to frequently asked questions, the forms you need, how taxation works, what to do after forming your business, as well as how to dissolve it when the time comes.

Frequently Asked Questions (FAQ)

Creating an LLC in Oregon sees you avoid double taxation. However, you may want to discuss things with an accountant to decide which tax structure is most appropriate for you. Options include: Self-employment tax in which the IRS considers you self-employed and taxes you as such Being taxed as a C corporation or an S corporation Using the pass-through taxation style that sees the business avoid taxation with the income of members being taxed instead

The LLC is a relatively popular business structure, and there is a good reason for that. Most of the benefits lie in the areas of litigation and taxation, and no one can deny the flexibility where management is concerned. A couple of the main benefits are: Limited liability, which comes from being able to separate personal and business assets Management flexibility, thanks to fewer management structure requirements Fewer reporting requirements than other business structure types Avoiding double taxation

Yes, you do. It’s required for the IRS to be able to identify your business for tax purposes. It’s a prerequisite for: Opening a business bank account Hiring employees Tax filing and management at state and federal levels

The cost of a registered agent typically ranges from $50 to $300 annually.

The IRS doesn’t charge for tax ID applications.

Yes, provided you are over 18 years old and own or are employed at the business you wish to become the registered agent for.

Matija

Amazing content is the core of what we do. With more than 5 years of experience in branding, name development, and business, Matija helps create and manage content production.

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