The cost to form an Oregon limited liability company (LLC) is $100. This fee is paid to the Oregon Secretary of State when filing the LLC’s Articles of Organization. Note that once filed with the state, this document formally establishes your Oregon LLC. However, to ready the LLC to do business, there are other start-up costs you need to contend with, and they include;
Other Cost You Will Incur When Registering an LLC in Oregon
Table of Content
- 1. LLC Name Reservation Fee – $50
- 2. Articles of Organization Fee – $100
- 3. Registered Agent Service Fee – $0 – $125
- 4. Attorney Fees: $150 – $2000
- 5. LLC Formation Service
- 6. Business and Professional Licenses
- 7. LLC Annual Fees – $100
- 8. Foreign Qualification Fee – $275
- 9. Taxes: 6.6% – 7.6%
- 1. Choose a Name for Your LLC
- 2. Appoint a Registered Agent
- 3. File Articles of Organization
- 4. Create an Operating Agreement
- 5. Complete Other Tax and Regulatory Requirements
- 6. File Annual Reports
1. LLC Name Reservation Fee – $50
Although reserving a business name isn’t mandatory, it can be a helpful tool if you are not yet ready to form your LLC. In Oregon, instead of filing for a reservation, you’ll register a business name, and then cancel that registration before filing your Articles of Organization.
Have it in mind that registering a name costs about $50 for a 120 day hold. But note that you skip this step and go straight to the Articles of Organization if you are ready to start your business right away, as this will automatically register your name.
2. Articles of Organization Fee – $100
In Oregon, every LLC is expected to have an Articles of Organization with the Secretary of State before starting any business activity in the state. So it is imperative you file one online or use a paper copy as soon as you are ready. This stage and filling will cost $100, no matter how you file it, but it’s a payment you are only expected to make once, since the Articles of Organization is a one-time filing.
3. Registered Agent Service Fee – $0 – $125
Even though you can list yourself as the registered agent, you need to list your registered agent in your articles of organization and maintain one at all times. You must publicly list a physical address that will be a permanent record of your Oregon LLC and be available during business hours to accept legal notices.
However, most prefer to hand off that responsibility to a professional. A registered agent service ensures that your annual reports and other forms are filed efficiently and on-time, saving you from the penalties of delinquent filings and the stress of having to do it yourself. Since not all registered agent services are equal, estimate to spend around $0 – $125 annually.
4. Attorney Fees: $150 – $2000
Most entrepreneurs are always advised to seek the advice or help of an attorney when looking to form a business structure in Oregon. Their expertise does not come cheap, but they can provide very important business advice, professional filing assistance, and peace of mind.
Some attorneys offer free consultations (usually 30-60 minutes) but will charge by the hour after that. On average, business attorneys charge between $150-350 per hour. Some will offer a flat rate for setting up an LLC, which can range from $500-2000. However, also note that these variations depend on the experience and location of the lawyer.
5. LLC Formation Service
In Oregon, forming an LLC can be a complicated and time-consuming process. So most entrepreneurs looking to save time on paperwork opt for LLC formation services. These services take care of the registration process for them.
Note that most of these services offer basic LLC formation service like Articles of Organization filing, tax consultations, and phone/email support for a flat rate, with options to pay more for premium packages with premium services like Employer Identification Numbers, Operating Agreements, and expedited filing.
6. Business and Professional Licenses
Agreeably, not all Oregon LLCs require professional licenses to start business in the state, but some do. For instance, bakeries in Oregon are expected to acquire a Food Handling License from the Oregon Department of Agriculture. Also, cities and/or counties have their own licensure requirements; the more reason entrepreneurs are advised to not only consult just state licenses page, but also local governments to know which licenses the LLC requires.
7. LLC Annual Fees – $100
In Oregon, to ensure that records are current and accurate, the Secretary of State’s office mandates every LLC to submit an Annual Report (or “Renewal”) before its anniversary date each year. Note that you can file your Annual Reports online and each will cost you $100. And since this is a recurring fee, be sure to include it in your yearly budget.
8. Foreign Qualification Fee – $275
For any LLC formed in another state and now looking to expand into Oregon, they are expected to file “Applications for Authority” rather than the Articles of Organization. Also note that all foreign business entities are expected to qualify in Oregon, or they could incur some pretty severe penalties.
For foreign LLCs, they are expected to file an Application for Authority online or on paper at $275. Agreeably it can be quite expensive, but like the Articles of Organization, it’s only a one-time filing.
9. Taxes: 6.6% – 7.6%
Typically in the United States, LLCs are classified as “pass-through” entities, so they don’t need to file corporate tax returns. Instead, the owners and/or members report income and losses on their personal returns.
In addition, Oregon doesn’t impose “franchise” or “privilege” taxes on its LLCs like some states do, and there’s no in-state sales tax either. The key reason an LLC would need to pay Oregon taxes is if it hires employees. Any company with employees is expected to pay a Withholding Tax and an Unemployment Insurance Tax.
Note that both require a Business Identification Number, which you must obtain through the Oregon Business Directory or by submitting a Combined Employer’s Registration Form. Also, if you’ve intentionally set up your LLC to be taxed as a corporation, it will need to file a corporate tax return and pay the 6.6-7.6% corporate income tax, depending on your income.
How to Form an LLC in Oregon in 7 Steps
If you are looking to start your business in Oregon or you already have been operating as a sole proprietor, you should consider forming an LLC. LLCs limit an owner’s personal liability for business debts and lawsuits and offer a lot of flexibility when it comes to ownership, management, and taxation of the business. Here are the steps you need to take to form a limited liability company (LLC) in Oregon.
In the State of Oregon, an LLC name is expected to include the words “Limited Liability Company” or the abbreviations “LLC” or “L.L.C.” Also note that any name you choose will have to be distinguishable from the names of other business entities already on file with the Oregon Secretary of State. Names may be checked for availability at the Oregon Secretary of State Business name database.
You can also reserve a name for 120 days by filing an Application for Name Reservation with the Oregon Secretary of State Corporation Division. The reservation may be filed online through the Oregon Central Business Registry webpage.
2. Appoint a Registered Agent
Every Oregon LLC must have an agent for service of process in the state. An Oregon Registered Agent is a person or company who agrees to receive notices, legal mail, and court documents (called Service of Process) in the event your LLC is sued or involved in a court case.
Note that your Oregon LLC’s Registered Agent needs to have a physical street address within the state where notices and other documents can be served. PO Boxes and Private Mailbox Rentals (like The UPS Store) are not allowed. They should also maintain normal office hours and be available from 9am to 5pm, Monday through Friday, in case service of process arrives.
3. File Articles of Organization
Just like it was stated above, an Oregon LLC is formed by filing Articles of Organization-Limited Liability Company with the Secretary of State. The article is expected to include:
- The LLC’s name
- The LLC’s duration—perpetual or limited
- The address of the LLC’s principal office
- The name and address of the LLC’s registered agent
- The address where the Secretary of State should mail notices to the LLC
- Whether the LLC will be member-managed or manager-managed
- Whether the LLC will provide professional services
- The name and address of each organizer of the LLC, and
- The name and address of at least one member or manager with direct knowledge of the LLC’s operations.
An LLC Operating Agreement contains the rules between the members of the LLC. This includes (but is not limited to) the rights and duties of each Oregon LLC member, how profits/losses are divided, and how taxes are paid. In the absence of an operating agreement, state LLC law will govern how your LLC operates. If an operating agreement is created, it need not be filed with the Articles of Organization.
5. Complete Other Tax and Regulatory Requirements
Have it in mind that other tax and regulatory requirements may apply to your LLC. These may include:
- EIN: Once your LLC has more than one member, it is expected to acquire its own IRS Employer Identification Number (EIN), even if it has no employees. However, if you form a one-member LLC, you can also obtain an EIN for it only if it will have employees or you elect to have it taxed as a corporation instead of a sole proprietorship (disregarded entity). This number can be acquired by completing an online EIN application on the IRS website. There is no filing fee.
- Business Licenses: Although this tends to depend on the type of business and where it is located, you may be required to obtain other local and state business licenses.
- Department of Revenue: If you have plans or you already have employees, you’ll need to register with the Oregon Department of Revenue (DOR).
6. File Annual Reports
Finally, note that every Oregon LLCs and foreign LLCs authorized to do business in the state must file an Annual Report with the Oregon Secretary of State. The LLC annual reports are due for the year in which they are filed. This annual report is expected to be received by the Office of the Secretary of State prior to your LLC’s anniversary date to avoid late filing penalties.
You are also expected to file the report online through the Oregon Secretary of State Business Registry Web Renewal webpage. The fee for filing the annual report is $100 for domestic LLCs and $275 for foreign LLCs.
Forming or running an LLC can be costly, but finding a way around them could cause you bigger problems in the future. For instance, if you miss an Annual Report, your LLC will be listed as “inactive,” which means it’s out of good standing with the state.
Late tax payments will incur penalties as well. Also, filling on your own is often the cheapest option, but completing all of the forms and filing them yourself can be complicated. Hiring a lawyer is another option, but will often cost you hundreds, if not thousands of dollars.
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