Oregon LLC: Everything You Need to Know
Before establishing your Oregon LLC, conduct research to ensure your intended name not is not already in use.5 min read
2. Registered Agent
3. Vital Documents
5. Business Bank Account
6. Employee Taxation & Hiring
7. Accounting Measures
8. Licenses and Permits
9. LLC Maintenance:
10. Certificate of Good Standing
11. LLC Benefits
12. Foreign LLCs
Before establishing your Oregon LLC, conduct research to ensure your intended name not is not already in use. You can search the Oregon State website to see if the name is already taken. In addition, make sure the name is easily digestible to the public and associated with the nature of your business. Regardless of the name, you must have the abbreviations L.L.C. or LLC next to it. Be aware of the following restricted words that could need additional licensure:
In addition, be on the lookout for prohibited words that confuse your business with government agencies, such as FBI or Secret Service.
Also, conduct a domain search name and reserve it if not already in use. Reserve the domain name to prevent someone else from using it, even if you do not intend to create a website. You can reserve names for 120 days with a Name Reservation form with the State Corporation Division. You can file online through the Oregon Central Business Registration, or you can do so via mail. There is a filing fee of $100.
A registered agent is an appointed official who receives and sends legal documents on your LLC’s behalf. The agent can be an entity or person as long as the agent is authorized to conduct business in Oregon, and you or other members will choose the agent. In addition, a registered agent can remind you to file important documents such as annual reports, or the agent can file for the company.
When creating your LLC, you will need to draft and submit an Articles of Organization, a document that officiates your LLC. You should include the following in your articles of organization:
- Duration of the Business
- Registered Agent
- Name of Each Member
- Whether it is Manager-Managed or Member-Managed
The articles can be filed via online on the Oregon Central Business Registry. The fastest way to register is online.
From there, you should draft an operating agreement for your business. An operating agreement is not required under law, but it is a crucial document that details the internal structure of your business, such as:
- Role of Each Member
- Rights and Responsibilities
- Pay Structure
In addition, you should include provisions that detail what may happen if a member exits or dies. Failure to spell out this detail could result in your company being dissolved if a member of the organization leaves or passes on.
The Employer Identification Number (EIN) is a number that identifies your business. Moreover, you need an EIN if you plan to hire employees and file federal and state taxes. You can go to the IRS website to get one for free, and it is a quick process.
Business Bank Account
You also need an EIN to open a business bank account. Business bank accounts divide your personal and business assets, allowing you to stay organized and free of legal trouble. Further, business accounts make accounting and filing taxes an easier process, and you receive a business credit card. A business credit card establishes your company’s credit foundation, which is crucial if you need access to financing at a later date.
Employee Taxation & Hiring
You need Business Identification Number (BIN) if you intend to hire employees. A BIN is used for paying and reporting payroll taxes, State Income Tax Withholding for your employees and Unemployment Insurance Tax. With that, Oregon does not levy sales taxes, so there is no need to register for a sales tax program of any kind. However, additional taxes may apply depending on your chosen industry.
When hiring employees, take the following into consideration:
- Hire employees that are legally allowed to work in the United States
- Report new employees as “new hires”
- Provide Insurance and Worker’s Compensation
- Withhold Income Taxes
- Place Compliance Posters in Certain Locations
Accounting is another crucial aspect of your business because it helps you:
- Organize your taxes
- Track invoices, bills, income, etc.
- Set short and long-term goals
You can find a good accounting system by searching for the right online software. Search for software that aligns purchase orders and transactions and has a sync feature that connects to your business bank account.
Licenses and Permits
Before operating your business, you must abide by local, state and federal regulations. For example, you may need a business license to operate in a certain county, and you may need local signage permits. Further, you would need a federal license if you are engaged in the firearms industry. You can go to the U.S. Small Business Administration (SBA) to find out if you need any type of federal license. Further, go to your local Chamber of Commerce to find out if you need any local permits and the Oregon-based Business Xpress License Directory. Office for any state-associated permits or licenses. The type of permits needed depends on your business, and the fees are based on what type of licensure you’ll need.
Oregon requires LLCs to file an annual report with the Oregon Secretary of State. This report includes a fee for LLC registration renewal.
Oregon requires you to file annual reports with the Secretary of State, and you must be the registration renewal fee. Failure to comply could result in your LLC being suspended or disbanded. Dissolution can take place 45 days after you miss the deadline. Many LLCs are dissolved because owners failed to file the necessary paperwork on time. Have your registered agent file annually.
A Certificate of Good Standing confirms that your business was legally created and is current on all registration and renewals. In Oregon, it is called a Certificate of Existence. You need one if:
- You are seeking loans from lenders
- You are opening a Foreign LLC in other states
- You are renewing licenses or permits
One of the reasons why LLCs are popular is because of pass-through taxation. Pass-through taxation means losses and income that flow from the business to individual members. The pass-through method allows members to record profits and losses on their personal returns.
Outside LLCs must submit documentation to the Secretary of State. A foreign LLC is an out-of-state LLC authorized to do business in another state. Foreign LLCs must also have a registered agent during the process and should be a resident of Oregon or someone who can legally operate in the state. To file, obtain an Application for Authority to Transact Business form and submit to the Oregon Central Business Registry via online or mail. You must pay a filing fee of $275. You must also submit a Certificate of Legal Existence from the LLC’s original state, and it must not be over two months old.
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