How to start an LLC in Oregon
Are you starting a new business in the state of Oregon? If so, there are various steps you will need to take. It starts with deciding on the business structure; for most companies, the LLC entity structure makes the most sense, as it combines relative simplicity with solid liability protection for owners. In this guide, we will cover how to start an LLC in Oregon step-by-step.
In Oregon, the process of new business formation is handled by the Oregon Secretary of State. Entrepreneurs will need to file the Articles of Organization with the Secretary of State’s department, and pay the $100 filing fee. However, there is more to it than just that. Below, find all the steps you will need to complete to start an Oregon LLC.
Consider utilizing an LLC formation service
The first step is to consider whether or not you want to use a professional LLC formation service. This is optional but can help save you a lot of time and hassle.
Using a service works like this: First, choose a service to use. We recommend Northwest Registered Agent for those who want more personalized help, or ZenBusiness for those looking for a budget-friendly option (it starts at just $49).
Once you’ve selected a service, simply choose the package that fits your needs. Most services offer a few different tiers of services, ranging in both features and cost.
Then, start the LLC formation process. The service will guide you through each step of the way. And if there are any issues, you can contact customer support to get one-on-one help with the issue.
Alternatively, it is possible to start an Oregon limited liability company on your own. To do this, follow the steps laid out in the article below.
Name your new company
Selecting a name for your company is an important first step. This name will be the formal name for your business as a legal entity – and it will usually also be the primary name that you do business as. Because of this, it’s important to take your time and choose a name that is a good fit.
Obviously, you will want to select a name that is relevant to your business. It should ideally also be memorable for your clients or customers.
But those aren’t the only naming considerations to keep in mind. LLC names in Oregon must also meet these requirements:
The LLC name must be unique from all other registered business names in the state of Oregon. You can conduct an Oregon business entity name search to confirm availability.
The LLC name must contain “LLC”, “L.L.C.”, or “Limited Liability Name”
The LLC name cannot contain government-related phrases or words
The LLC name cannot include restricted words like “banking” or “trust”, without special permission
A full list of LLC naming rules in Oregon can be found here.
Once you have found a name that fits your business and meets all the requirements, you can move on to the next step.
Using an Assumed Name in Oregon
Oregon does allow for the use of assumed names, otherwise called “doing business as” names or DBAs. Assumed names can be registered online with the state of Oregon. What does this mean?
An assumed name is a secondary name that is used for branding. You essentially add the name to existing business registration. So once your LLC is formed – as “ABC, LLC”, for example – you could then also register an assumed name as “ABC Plumbing” or “Rose City Plumbing”.
This allows for much more flexibility and means that you don’t need to obsess too much about finding the perfect LLC name.
Appoint a Registered Agent
All LLCs in the state must have a registered agent in Oregon. This can be any individual that resides in Oregon (including yourself, or an employee). Or, it can be a company licensed to do business in Oregon.
The registered agent is the person who receives and processes mailings, legal notices, and official documents on behalf of the company. So when the IRS sends a tax form, or the state sends a legal notice, the documents will go to the registered agent, who can then forward it onto the business owner. You will need to know your registered agent’s address before moving onto the next step (and keep in mind that the address will be made publicly available on the business record).
You have two choices when it comes to choosing a registered agent:
You can appoint yourself, or an employee. This is free, but you sacrifice some privacy as your address will be published. And if you go on vacation, you run the risk of missing an important time-sensitive document.
You can appoint a professional registered agent service. This costs around $150+ per year, but offers the benefit of enhanced privacy and security, and limits the risk of missing a document.
Create an operating agreement
Note: This step is optional, but recommended.
An operating agreement is an important document that most businesses should create and keep on file. It establishes the operating procedures of the business – as well as its ownership structure. As such, it is especially important for LLCs that have more than one owner or shareholder, because it helps prevent future ownership disputes.
Although it’s important, operating agreements are optional, because they don’t need to be submitted to any government agency. They are simply kept on file for future reference.
You can draft an operating agreement using a template provided by a service like ZenBusiness. Alternatively, you could contact a local business lawyer for help.
File LLC Articles of Organization
In order to form a new LLC, the formal document that must be submitted is the Articles of Organization. You can do this online or by mail. Either way, the filing fee is $100, payable to the Corporate Division.
To file online
File online with the State of Oregon’s website. Pay the $100 filing fee by credit card or bank transfer.
To file by mail
Fill out the LLC Articles of Organization and print them out. Include a check or money order for $100 made payable to “Corporation Division”. Mail the documents to:
Secretary of State, Corporation Division
255 Capitol St. NE
Salem, OR 97310
Once your documents are submitted, you simply need to wait for the state of Oregon to process everything. This typically takes 3-7 business days or so.
Apply for an EIN
An EIN is an important number for your business. As the name suggests, the employer identification number is required in order to hire employees. This is a federal number that is issued by the Internal Revenue Service (IRS), so it has little to do with Oregon – but Oregon LLCs should still apply for an EIN.
To get an EIN, fill out this application on the IRS website. There is no cost to apply, and the process is simple. Once you have an EIN, you can use it to hire employees, open a business bank account, and more. Some other state/local level filings may require an EIN, so it’s possible you will need to complete this step earlier than expected.
Apply for business licenses & permits
Forming an LLC is not the only step you will need to take in order to legally operate a business in the state of Oregon. There are other requirements – both on the state level, as well as the local and federal levels.
Oregon does not have a “general purpose” business license. However, specialty licenses and permits are necessary for a wide variety of business types and industries. There are more than 1,100 unique permits – the state maintains a searchable database here. You will need to do some research to determine which licenses/permits are needed for your specific business.
Likewise, the federal government also requires licenses for certain business activities and industries – for example, alcoholic beverages and agriculture.
Finally, you have local city/county level requirements. Many jurisdictions do require general-purpose business licenses, and even those that don’t still often require specialty permits or licenses. You will need to contact your local city or county government for details. This also means that multi-location businesses will need to satisfy the requirements in all cities/counties that they plan to operate in.
This is also a good time to research and prepare for your Oregon LLC tax reporting requirements on the state level. This means registering for employer tax, among other requirements.
Keep your business in good standing
Long after your business is formed, you will need to complete various tax returns, reports, and other required filings. It’s wise to think about all of this now so that you can plan ahead and stay on top of all your requirements.
The specific filings, tax returns, and other requirements will vary depending on the type of business you run, as well as the location(s) where you operate. With that said, here are some of the most common requirements that are likely to be required for your business:
Oregon LLC annual report – due every year for all Oregon LLCs
Oregon employer tax/payroll tax returns
Oregon income tax returns
Federal employer tax/payroll tax returns
Federal quarterly taxes
City/county local tax returns
Specialty tax returns (i.e. alcohol tax returns)
Business license renewals
Business permit renewals
Keeping a registered agent appointed (for the life of the company)
Notifying the state of Oregon of any major changes to your business
If you could benefit from some assistance with ongoing compliance tasks, you can use a service like Northwest Registered Agent or ZenBusiness. These services can help you complete certain filings, and keep you on track by sending reminders about key due dates.
You can also set yourself up for success by planning ahead and setting calendar reminders for yourself. By being proactive, you can have an easier time keeping your business in good standing with government agencies at all levels (federal, state, local).
Open a business checking account
Once you have an EIN and business license/formation documents, you will be able to open a business bank account with a local financial institution. This is important to handle as soon as possible because you will need to keep your business and personal transactions separate.
Check with local banks to see which offers the best services for your needs. At a minimum, you will likely need to bring in your business license, EIN, and a small opening deposit. However, it’s a good idea to call ahead to check on specific requirements.
This is also a good time to research business insurance, lines of credit, and other financial services that could benefit your business.