Follow our free guide to form an LLC in Oregon
- Pros and Cons of Forming an LLC in Oregon
- Starting Your Oregon LLC
- Maintaining Your Oregon LLC
- Additional Oregon Resources
Setting up an LLC in Oregon includes a series of steps that can be complicated, but Swyft Filings has prepared a comprehensive guide that is divided into two separate phases to better assist you in the whole LLC formation process.
Pros and Cons of Forming an LLC in Oregon
Privacy for LLC Members
Oregan only requires the manager/managing member to be listed in the filing paperwork, but the identities of any other members remain private.
No Sales Tax
Oregon is one of the few states in the US that does not impose a sales tax.
No Corporate Tax for LLCs
Oregon does not impose any corporate or franchise tax on LLCs. The only taxes owed on the LLC’s revenue is the personal income tax paid by the members.
High Income Tax Rates
Oregon has one of the highest income tax rates in the nation. Even though it’s marginal tax scale starts at 5%, most working residents are paying between 9% and 9.9% income tax rate.
High Cost of Living
The overall cost of living in Oregon exceeds the national average by approximately 20%, with housing and transportation being the highest on the list. The average home price in Oregon is over $330,000 — over $100,000 more than the U.S. median price ($216,000).
Qualified Worker Shortage
Even though Oregon’s economy is currently going strong, the lack of qualified workersis threatening to case some setback. The job growth percentage has slowed from 3% to just 1.9% within the past year. The main issues center around out-of-date skill sets and lack of reliability from prospective employees.
Cost of Doing Business
- $100 filing fee
- $100 annual report
- No corporate/franchise tax
Phase One: Starting Your Oregon LLC
Starting an LLC in Oregon does not have to be stressful when you have the right information and the right kind of help. The initial steps of setting up an LLC are:
- Step 1: Name your LLC
- Step 2: Establish Ownership of your LLC
- Step 3: Decide on a Registered Agent
- Step 4: File the Articles of Organization
- Step 5: Create your Operating Agreement
- Step 6: Register for an EIN
Step 1: Name Your Oregon LLC
The first step in forming your Oregon LLC is to choose a name your business. There are state and federal guidelines concerning business names and which words can/cannot be used.
Business Name Guidelines
- The official name of your business must end with: Limited Liability Company, Limited Company, LLC, or L.L.C.
- Your business name cannot be intentionally misleading to consumers
- The name of your new LLC must not be similar to another organization’s name/trademark
- “Lottery” and “Bank” are ineligible for use (any state)
- Terms that represent educational or Veterans’ organizations are restricted
- Terms related to the Armed Forces or civil servants (police, EMT, fire)
LLC business names associated with government and/or financial entities are not always restricted - it depends on the state. Additional paperwork may be required.
In addition to naming your LLC, you should also create an online presence for your business with a website. Check domain name availability at a number of online web services sites.
Step 2: Establish Ownership
The owners of an LLC are known as members and managers. While all LLCs will have members, only certain LLCs will have managers — this depends on the management structure of the business.
LLC Management Structures:
- Member-managed: All members participate in operating and making decisions for the LLC
- Manager-managed: An appointed manager oversees the daily operations of the LLC and the members are not actively involved.
Oregon LLC Member Guidelines
Required Number of Members
There must be at least one member or manager to form an LLC in Oregon.
Member Disclosure Requirements
At least one member/manager with direct knowledge of the LLC must be listed in the Articles of Organization. (Member/manager names not required)
LLC members in Oregon may be of any age.
There are no residency restrictions imposed on LLC members in Oregon.
Step 3: Find a Registered Agent in Oregon
Every LLC in Oregon must appoint a registered agent — your LLC cannot legally operate without this position.
What is a registered agent?
A registered agent is a person or business who is authorized to accept official government notices (including the Secretary of State) and service of process notices on behalf of the LLC.
Why do you need a registered agent?
Your LLC must have a registered agent so that your business has a consistent contact person.
What are the main requirements for a registered agent?
- The registered agent must have a physical address — not a P.O. Box
- The registered agent must be available during business hours
Who can be a registered agent in Oregon?
- A state resident with a physical address in Oregon
- An LLC or corporation that is licensed to conduct business in Oregon
Is the registered agent’s contact information publicly accessible?
The name and contact information of the LLC’s registered agent is a matter of public record.
Can I be my own registered agent for my business?
You are legally allowed to be your own registered agent as long as you have a physical address in Oregon.
Is being my own registered agent discouraged?
Business owners who choose to be their own registered agent risk compromising personal information.
Tip: Avoid the hassles and choose Swyft Filings to fill the registered agent needs for small businesses in Oregon. Find more information here.
Step 4: File the Articles of Organization
Filing the Articles of Organization with the Secretary of State is the most important step in creating your Oregon LLC.
What is the Articles of Organization?
The Articles of Organization is a legally binding document that is filed with the state government to officially form your LLC.
Why do I need the Articles of Organization?
Your LLC business in Oregon will not be legally recognized by the Secretary of State without filing this document. This document is the first part of your LLC’s foundation.
What information is included in the Articles of Organization?
- The name and address of the LLC
- The name of the organizer filing the paperwork
- The name of the party with direct knowledge of the LLC (manager or primary member)
- The name and location of the registered agent
- The chosen LLC management structure
- The duration of the LLC
Please Note: Members and Managers do not have to be listed in the Articles of the Organization — this information is optional.
Additional Oregon Filing Information — Professional LLCs
Oregon also allows professional service businesses to form a specific type of LLC known as a Professional Limited Liability Company (PLLC).
Example professions that may form PLLCs:
- Physicians/Medical Professionals
- Professional Counselors and Psychologists
- Architects and Engineers
- Real Estate Professionals
- Social Workers
A few points to consider:
- All members of the PLLC must be licensed in the profession of the business.
- The PLLC is only allowed to provide services for which the business was formed.
- The members are still subject to whichever licensing boards govern the PLLC’s profession.
Step 5: Create an LLC Operating Agreement
Having an LLC Operating Agreement is necessary for any successful and profitable Oregon LLC. Although not required, the Operating Agreement is still a highly recommended part of your LLC’s foundation.
What is an LLC Operating Agreement?
The LLC Operating Agreement is a legal document that defines the rights and responsibilities of the LLC members/managers and provides clarity for the business’s operating procedures.
Why do I need an LLC Operating Agreement?
The LLC Operating Agreement is needed for your business because it provides a measure of structure, protects business assets from creditors, and reduces the likelihood of disputes among members.
Do I need to file the LLC Operating Agreement?
The Operating Agreement is not filed with any state office; it is for the benefit of your LLC and remains in-house.
What goes into an LLC Operating Agreement?
There is not a set rule of how to write your LLC Operating Agreement; however, most documents include the following:
- List of the members/managers and their roles
- Designation of authority in the LLC
- Initial capital contributions of the members
- Voting designations and percentages of the members
- Member transfer/addition rules and restrictions
- Distribution of profits
- Meeting schedule
Tip: Get a customized LLC Operating Agreement for your small business with Swyft Filings. Add structure to your LLC now.
Step 6: Register for an EIN
Most Oregon businesses must register for an EIN. Your Oregon LLC may not be able to legally operate without this ID.
What is an EIN?
The EIN is a nine-digit number that is assigned to your business by the Internal Revenue Service (IRS) and identifies your LLC with the government much like a personal Social Security number.
What does EIN stand for?
EIN is an acronym for Employer Identification Number. It is also known as a Federal Tax ID.
Are all businesses required to have an EIN?
Federal law dictates that certain types of business entities register for an EIN:
- Any business with employees (even if owned by one person)
- Any business with more than one member
- A partnership (LLC or C-corp)
Please Note: A sole proprietorship is not required to have an EIN, but it is still recommended.
Why does my LLC business need an EIN?
The more common reasons you would need an EIN are:
- To hire employees
- To open a bank account in the U.S.
- To file your company’s taxes
- To pay independent contractors
In short, if you make money through your business and it has employees, you must have an EIN.
Is the EIN publicly listed?
The EIN for your LLC will be part of public record.
Can I use my Social Security Number as the EIN?
If you are a sole proprietorship who wants an EIN for your business, you can elect to use your social security number; however, your EIN is part of public record.
Swyft Filings offers EIN services for small businesses in Oregon. Find more information here.
Phase Two: Maintaining Your Oregon LLC
The next phase of forming your Oregon LLC involves steps that focus on getting your business ready to operate. The next few steps are:
- Step 1: Register for Taxes in Oregon
- Step 2: Apply for Permits and Licenses
- Step 3: File the Annual Report
- Step 4: Request a Certificate of Good Standing
Step 1: Register for Oregon State Taxes
Oregon does not charge LLCs with a corporate or franchise tax. LLC members are still required to pay state and federal income taxes on their earnings.
Please Note: If your LLC files a partnership tax return in Oregon, you will be responsible for paying the excise tax. The minimum fee is $150. See the Corporate Tax section below for more information.
State Income Taxes
Oregon’s state income tax rates are listed in the table below:
Corporate Tax Information
You can also choose to have your LLC taxed as a corporation; if so, you will be responsible for paying the corporate excise tax which is based on the greater sum of either the corporation’s income or state sales.
Corporate Excise Tax:
- 6.6% for income under $1 million
- 7.6% for income over $1 million
Additional Tax Information
Other taxes your LLC may need to pay:
- Employee Withholding Tax
- Unemployment Tax
Please Note: Oregon is one of the few states that does not charge a state sales tax.
Step 2: Obtain Business Licenses and Permits
The licenses and permits required for an LLC in Oregon can vary, depending on a number of variables:
- Location (city and county)
- Type of Business
Tip: If you would like to see more in-depth information on licenses and permits, please feel free to visit the content in our learning library that covers business licenses and permits.
Step 3: File an Annual Report
All businesses formed in Oregon are required to file an annual report with the Secretary of State.
What is an annual report?
An annual report maintains your LLC’s information; the form that is filed with the Secretary of State on a periodic basis.
What kind of information is in the annual report?
The information requested in the annual report is similar to what is in the Articles of Organization:
- The name and address of the business
- The name and address of the registered agent
- The names of the members
- The business’s EIN
Is the annual report part of public record?
The annual report filed on behalf of your LLC is a matter of public record.
Fees and Due Date
Due Date: Anniversary date of LLC formation
Frequency: Every year
Implications of Late Filings: Administrative dissolution of LLC
Swyft Filings helps you stay compliant by providing stress-free solutions. File your annual report with us today.
Step 4: Request a Certificate of Good Standing
The last step in forming your Oregon LLC involves requesting a Certificate of Good Standing for your business.
What is a Certificate of Good Standing?
The Certificate of Good Standing confirms that your business is properly formed and in compliance with all state regulations.
Who issues the Certificate of Good Standing?
The Certificate of Good Standing is generally issued by the Secretary of State.
When can I request a Certificate of Good Standing for my business?
Submit your request for a Certificate of Good Standing with the Secretary of State after your LLC is officially formed.
Why do I need a Certificate of Good Standing?
The Certificate of Good Standing adds credibility to your new LLC and offers evidence of compliance for banks, financial institutions, and other businesses.
Additionally, some states require a Certificate of Good Standing before a business can apply for Foreign Qualification.
Does the Certificate of Good Standing have an expiration date?
The Certificate of Good Standing does not expire/does not need to be renewed.
Swyft Filings can create a Certificate of Good Standing for your Oregon LLC. Click here for more information.