How to File an LLC in Oregon

Thousands of new LLCs are formed in Oregon every month, and new business registrations are rising.[1]

In this article, we’ll outline how to start an LLC in Oregon from start to finish. We’ll cover if an Oregon LLC is the type of business for you (rather than an S Corp or C Corp) and walk you through all steps of your filing, so you can get your business registered with confidence.

Key Takeaways:

• Along with the typical benefits of an LLC, such as limited liability, personal asset protection, and flexibility in tax designation and management, an Oregon LLC has the benefit of operating in a state with low unemployment, a substantial labor force, and a thriving economy.

• LLCs are ideal for small, informally-run businesses and larger, more structured organizations. It’s the most popular business structure for new businesses by a large margin.

• Starting your Oregon LLC and maintaining its good standing is just a matter of filing your articles of organization with the Oregon Secretary of State, staying on top of your annual reports, and paying your state fees.

What Is an LLC Formation?

First off, let’s start with the basics: what exactly is an LLC, and what are the benefits over other business structures?

A limited liability company (LLC) is a business entity that provides the liability protection of a corporation with the flexibility and ease of a sole proprietorship. It’s an ideal structure for small, informally-run businesses and larger, more structured organizations. It’s the most popular business structure for new businesses by a large margin.[1]

Benefits of LLC formation include:

1. Liability protection and personal asset protection

2. Management structure flexibility

3. Tax designation flexibility

4. Less paperwork and reporting

1. Liability Protection and Personal Asset Protection

The key benefit of LLC formation is its legal separation between you and your business as liability protection. If your business ever gets sued, this means your business is liable to pay, not you personally. Your personal assets are all protected by your LLC’s liability protection.

2. Management Structure Flexibility

An LLC business entity offers remarkable flexibility, including the ability to manage your business how you want.

In general, an LLC is considered either member-managed, which means that the owners are the ones running the day-to-day business, or manager-managed, which means outside help is calling the shots. You choose how and by whom you want to manage your LLC.

3. Tax Designation Flexibility

By default, the IRS considers an LLC “a disregarded entity” for tax purposes.[2] Your business’s income passes through to your personal income tax return to get reported there. This is referred to as pass-through taxation.

There are many benefits to pass-through taxation, such as avoiding the double taxation a C Corp is subject to, so the majority of small business owners elect to choose this tax designation.[3]

However, an LLC’s members can choose instead to be taxed as an S Corp or a C Corp. Each of these tax designations has a different set of pros and cons, depending on the specific LLC.

4. Less Reporting and Paperwork

It’s relatively easy to start and maintain an Oregon LLC compared to an S Corp or C Corp. The yearly shareholder meetings and all that goes into reporting a corporation doesn’t always make sense for a more informally-run LLC.

Luckily, starting your Oregon LLC and maintaining its good standing is just a matter of filing your articles of organization with the Oregon Secretary of State, staying on top of your annual reports, and paying your state fees. 

Step-By-Step Guide to Starting Your Oregon LLC

In this section, we’ll take you step-by-step through how to file your LLC in Oregon. It’s important to note that each state has different procedures and filing fees for LLC formation, so reviewing the steps for each state you’re registering is crucial.

Step 1: Choose a Business Name for Your LLC

Choosing a business name for your Oregon LLC is one of the most vital steps to your new business’s success. A good LLC name is memorable and will create positive associations for your brand with your customer base. 

You probably already know your company name if you’ve operated your business as a sole proprietorship or side hustle. If so, you must ensure it complies with Oregon’s naming requirements.

Oregon LLC naming requirements include:

• Must be distinguishable from other LLCs registered in the state of Oregon

• Must have the words “Limited Liability Company” or abbreviations such as LLC or L.L.C.[4]

You should conduct a business name search on the Oregon Secretary of State website to ensure your company name isn’t used by anyone else. To do so, click here.

If you’ve chosen your LLC name but aren’t ready to file your articles of organization yet, you can file an Application for Name Reservation form. This will reserve your name for up to 120 days. The processing fee is $100.

Assumed Business Names

In some cases, the name you register on your articles of organization as your official LLC name differs from the one you use in your day-to-day business. Your DBA, or “doing business as” name, is also referred to as an “assumed name” or “fictitious name.”[5]

To use your DBA officially in Oregon, you must file an Assumed Business Name - New Registration form. You can do so online or in person for a filing fee of $50. Importantly, you must renew your assumed name registration every two years.

Trademarking Your Name 

A trademark protects a brand name or logo and ensures no one can legally use it to sell similar goods or services to your business. Registering your business alone does not give you trademark rights.[6]

You can apply for a state trademark directly through Oregon’s department or a federal trademark through the United States Patent and Trademark Office (USPTO), or both. An Oregon trademark will protect your brand name throughout the state, while a USPTO trademark will protect your name throughout the country.

You can search for active Oregon trademarks here. For federal trademarks, you can search the USPTO’s trademark database here.

It costs $50 to register an Oregon trademark through the Oregon Secretary of State. A federal trademark will cost more, at $250-$350 per classification of goods or services.[7]

Domain Search

Maintaining an internet presence for your business to stay relevant is vital. That’s why you should consider making a website for your business, and the first step is securing a domain name for your website.

First, you must ensure that your chosen domain name is available. You can conduct a domain search on any of several sites like name.com.

Step 2: Fill Out Oregon Articles of Organization

Once you’re ready to register your business, it’s time to file articles of organization for your LLC.

First, determine whether you will register as a domestic or a foreign LLC. If your principal place of business is in Oregon, and you’re registering your business for the first time, your LLC constitutes a domestic LLC. However, if your business is currently registered in another state, you’d be considering a foreign LLC.

This is an important distinction because there are separate applications for domestic and foreign LLCs, and it’s crucial that you fill out the correct form to be processed correctly.

If you’re a domestic LLC, you’ll fill out the Domestic Limited Liability Companies - Articles of Organization form. You can do so either online through the Oregon Business Registry Secretary of State Corporation Division or print out the form to submit by mail or in person. The filing fee for domestic articles of organization is $100.

You can view instructions for filling out your articles of organization here.

If you’re a foreign LLC, you must fill out the Foreign Limited Liability Companies - Application for Authority form. You can do so online or print the form to submit by mail or in person. The pricing for foreign LLC applications is $275.

You can view instructions for filling out your application for authority form here.

Annual Reports

To keep your LLC in good standing, you must file annual reports to renew your business. Annual reports are due every year before your LLC’s filing anniversary. The Oregon Secretary of State will mail out a reminder 45 days before the deadline.[8]

You can complete your annual report on the Oregon Secretary of State Corporations Division website. Once you enter your registry number, the form will auto-populate with your LLC’s information.

It costs $100 in state fees to file an annual report for a domestic LLC and $275 for a foreign LLC.

Step 3: Hire an Oregon Registered Agent

One of the required items for filing your articles of registration is to list the name and address of your Oregon registered agent.

A registered agent is a person or entity that acts as the point of contact between your business and the state. The state will direct all official and legal documents to your registered agent address.

Nearly every state in the US requires a registered agent to register a business. Anyone can serve as a registered agent provided:

• They are 18 years or older.

• They have a principal office address within the registered state (must be a physical street address, as a P.O. box will not suffice).

• They maintain regular business hours.

You can, of course, serve as your own registered agent for your Oregon LLC to avoid having to hire a registered agent service, but here’s why that may not be a good idea.

1. Privacy

All of the information listed on your Oregon articles of organization, including the name and address of your registered agent, will be listed on the public record. For this reason, it may not be a good idea to list your personal home address, even if it’s where you operate your business, to avoid solicitation or worse.

2. Discretion

Listing your public business address as your registered agent address may solve the privacy issue, but there are still discretionary issues to consider. Namely, if you list your customer-facing address, you risk being served legal documents before your clientele, which could leave a wrong impression of your business.

3. Business Hours

As stated previously, all registered agents must maintain regular business hours. Your registered agent must be physically available during those business hours if a process server serves legal documents. Sick days, vacations, lunches, or business meetings are all off the table if you act as your own registered agent.

4. Mail Processing

If you act as your own registered agent, you must take on the responsibility of processing all associated mail promptly. Processing this mail can be a hefty burden for a small business owner, especially when they must keep up with all the other mail related to their business. It’s easy for correspondence to slip through the cracks.

Failure to meet deadlines for legal proceedings or compliance documents could lead to penalties, including losing lawsuits for failure to appear, incurring fines, or even dissolution of your LLC.

5. One Registered Agent Per State

Acting as your own registered agent can work in the short term if your business is confined to Oregon, but it quickly becomes untenable when your business expands. This is because you must list one registered agent address per state where you register your LLC. Hiring a registered agent service is a good idea if you want to grow your business nationwide.

What Is a Registered Agent Service?

After considering the above points, many business owners hire a registered agent service. A good registered agent service will provide peace of mind knowing that a professional handles your registered agent needs.

Swyft Filings’s Registered Agent Service

Conveniently, Swyft Filings offers a registered agent service for all 50 states. Starting at just $99/year plus state fees, here’s what our registered agent service can provide your business:

• Secure online dashboard available 24/7 to review your documents as they are received

• Reminders for all upcoming deadlines to help keep your LLC compliant and in good standing

• Guaranteed privacy, so your personal address stays off the public record

• Easily appoint a registered agent in every state in which you register your business

Step 4: Create an LLC Operating Agreement

The next step in your Oregon LLC formation is to create an LLC operating agreement. An LLC operating agreement is an internal document that outlines how your business will operate. It keeps all members on the same page and can prevent any future conflicts in operation from arising.

In Oregon, a written operating agreement is not required to be on file, but it serves vital functions for your LLC. Namely, a good operating agreement will:

• Outline how to resolve any conflicts between members

• Further preserve your LLC’s limited liability

• Allow you to apply for specific business licenses, bank loans, and business credit cards

• Give you the authority to state how your business will operate rather than being reliant on the state’s determination

Multi-member LLCs can benefit most from an operating agreement, as it keeps all members in agreement. Still, even single-member LLCs can benefit from having a detailed LLC operating agreement. In addition to those detailed above, the biggest reason is that an operating agreement legitimizes your business.

There are many forms that an LLC operating agreement can take, but the following information is generally included:

• Business entity and name

• General description or purpose of your business

• Management structure (member-managed or manager-managed)

• Voting rights and how exactly decisions will be determined

• Profit shares and distributions

• Rights and responsibilities of members

• Procedures for adding or removing members

• Initial tax designation (whether your LLC is taxed as a sole proprietorship, partnership, S Corp, or C Corp) as well as procedures for changing tax designations in the future

• Procedures for LLC dissolution

Step 5: File for an Employer Identification Number and Business Licenses

Next, you’ll want to apply for an employer identification number (EIN). An EIN (sometimes called a federal tax ID number or FTID) is an identification issued by the Internal Revenue Service (IRS) for businesses. You can think of an EIN as serving the same purpose for a business that a social security number does for an individual.[9]

Multi-member LLCs can benefit the most from filing for an EIN since the primary purpose of an EIN is to allow you to hire employees, but even single-member LLCs should consider filing for one. This is because an EIN is also suitable for:

• Providing a secure alternative to a social security number

• Reporting employment taxes or federal income tax

• Opening a business bank account

• Filing as a partnership or corporation on your LLC tax return

• Opening a business bank account

• Applying for a business credit card

• Applying for specific business licenses

• Filing Oregon business taxes through the Oregon Department of Revenue

Applying for an EIN is easy to do on the IRS website. It takes just five minutes to apply and receive your nine-digit EIN. Best of all, it’s completely free. 

Applying for Business Licenses

In the state of Oregon, certain business activities may require business licenses, permits, or certificates.[10]  The Oregon Business License Directory maintains a database where you can search for information regarding applying for and renewing your state, county, and local licenses.

Your business license requirements and fees also vary based on your business location. You must check with your local city and county jurisdictions to determine which licenses, permits, or certificates your LLC requires.

Let Us Handle Your LLC Paperwork

After reading through all the necessary steps involved in Oregon LLC formation, you may feel overwhelmed with navigating the process yourself.

Luckily, Swyft Filings is here to help with your filing. Simply fill out your small business’s information using our LLC service, and we’ll take care of the rest. We’ll ensure all your paperwork gets filed correctly, so you can successfully focus on running your LLC.

Benefits of our LLC service are:

• Fast and reliable: our online form takes as little as ten minutes to set up

• Saves you time and money, guaranteeing we will file your paperwork following state regulations

• Personalized customer care, providing each customer with a certified Business Specialist to walk them through their company’s needs

• One of the fastest turnaround times in the industry, so you can get your LLC registered in no time

At Swyft Filings, we’re passionate about small businesses and helping entrepreneurs get their dreams off the ground. Turn your dream business into a reality with our LLC service.

FAQs:

How much does it cost to set up an LLC in Oregon?

The price to set up an Oregon LLC varies depending on whether you’re a domestic or foreign LLC. The cost to set up a domestic LLC is $100 in state fees to register your articles of organization. A foreign LLC costs $275 to file your application for authority form.

As a domestic LLC, you must pay $100 to file your annual report yearly to remain in good standing. It costs $275 to file your annual report as a foreign LLC.

How is an LLC taxed in Oregon?

Your LLC is subject to state and local taxes in Oregon, depending on your business’s primary office location and particular activities. You can review the Oregon Department of Revenue’s website to read up on business taxes, though you should also contact your local jurisdictions.

It’s a very good idea to consult with an accountant to ensure you fully understand which state and local taxes your LLC will be required to pay come tax season. Failure to comply with federal, state, or local tax regulations can result in hefty penalties.

There is no general sales tax in Oregon.

What are the benefits of an Oregon LLC?

There are many benefits to operating an LLC. In addition to the typical benefits of an LLC, such as limited liability, personal asset protection, and flexibility in tax designation and management, an Oregon LLC has the benefit of operating in a state with low unemployment, a substantial labor force, and thriving economy.[11]

How do you dissolve an LLC in Oregon?

When considering dissolving your Oregon LLC, you should follow the LLC dissolution procedures outlined in your operating agreement.

After you’ve wrapped up the steps agreed upon in your LLC operating agreement, you should check with state and federal agencies and local business administration offices for advice and requirements for closing your business.[12]

Finally, you must file an Articles of Amendment/Dissolution form with the Oregon Secretary of State Corporations Division. You can either do so online or print the form for mail or in-person delivery. The processing fee for your Articles of Dissolution is $100.

Bibliography:

1. Oregon Secretary of State. “January 2021 - Business Report.” Accessed February 13, 2023.

2. U.S. Bureau of Labor Statistics. “Oregon Economy at a Glance.” Accessed February 13, 2023.

3. Internal Revenue Service. “Limited Liability Company (LLC).” Accessed February 13, 2023.

4. Tax Foundation. “Pass-Through Businesses: Data and Policy.” Accessed February 13, 2023.

5. Oregon Secretary of State. “Select Your Name and Business Structure: Limited Liability Company.” Accessed February 13, 2023.

6. Oregon Secretary of State Corporations Division. “Assumed Business Name.” Accessed February 13, 2023.

7. Oregon Secretary of State. “Business Names and Trademarks.” Accessed February 13, 2023.

8. America’s SBDC Oregon. “How to Trademark Your Oregon Business.” Accessed February 13, 2023.

9. Oregon Secretary of State. “Annual Report or Renewal.” Accessed February 13, 2023.

10. U.S. Small Business Association. “What is An EIN and Why Is It Important.” Accessed February 13, 2023.

11. Oregon Business Xpress. “Apply for Local Business Licenses.” Accessed February 13, 2023.

12. Oregon Secretary of State. “Close a Business.” Accessed February 13, 2023.