An LLC, or limited liability company, is a popular business structure that combines the advantages of a corporation and a partnership. It offers easy setup in Oregon and provides limited liability protection, meaning owners’ personal assets are protected if the company faces a lawsuit. Additionally, Oregon LLCs are pass-through entities for tax purposes, so profits and losses are passed directly to the members rather than being taxed at the corporate level. For these reasons, LLCs are ideal for many small businesses in Oregon.
If you're ready to form an LLC in Oregon, here are six simple steps to help you get started:
1. Choose a Name for Your Oregon LLC
First, select a unique name for your LLC that complies with Oregon law. Your LLC name must include “Limited Liability Company,” “LLC,” or “L.L.C.” Be sure to check the Secretary of State’s website to confirm your chosen name is available. Also, avoid terms associated with government agencies (e.g., "CIA," "FBI"), and be aware that certain words like "bank" or "attorney" may require additional documentation.
Tip: It’s a good idea to check if your preferred domain name is available, even if you don’t plan to build a website yet. You can also reserve your LLC name for 120 days by paying a small fee to Oregon's state agency.
2. Select a Registered Agent
Oregon requires all LLCs to have a registered agent—a person or business authorized to receive legal documents on behalf of the LLC. The agent must have a physical address in Oregon and be available during business hours.
3. File the Articles of Organization
The Articles of Organization establish your LLC legally. This form can be completed online or by mail and requires basic details about your business, including its name, principal address, registered agent, and purpose. Once filed and approved by the Oregon Secretary of State, your LLC will be officially recognized.
4. Obtain a Certificate from the State
Upon approval, the state will send a confirmation letter verifying that your LLC is established. This certificate enables you to apply for an Employer Identification Number (EIN), open a business bank account, and acquire necessary business licenses.
5. Create an Operating Agreement
Though not required by Oregon law, an operating agreement is recommended. This document outlines your LLC’s management structure, member roles, and distribution of profits and losses. Having an agreement can prevent future disputes and serve as a legal reference.
6. Get an EIN (Employer Identification Number)
An EIN, issued by the IRS, is essential for managing taxes, opening a bank account, and hiring employees. You can apply for an EIN online or by mail.
Next Steps
Now that your LLC is set up, ensure you remain compliant by filing annual reports with the state and maintaining your registered agent. You'll also need to apply for any necessary permits and licenses and register your business with the Oregon tax office. Consider additional steps like opening a business bank account, applying for business credit, and securing appropriate insurance.
Oregon LLC FAQs
How much does it cost to start an LLC in Oregon?
The Oregon Secretary of State charges a $100 filing fee, with annual report fees of $100 for domestic LLCs and $275 for foreign LLCs.
Can I hire employees for my LLC?
Yes. However, as an LLC owner, you are not classified as an employee.
What is a disregarded entity LLC?
For tax purposes, a single-member LLC is disregarded, meaning the owner reports income and expenses on their personal tax return.
Conclusion
Starting an LLC in Oregon is a straightforward way to establish your business while enjoying limited liability protection and tax flexibility. Be sure to comply with all state requirements, and you’ll be well-prepared for success. Good luck!
