Starting an LLC in Oregon is fairly straightforward because there are not many requirements you need to fulfill. However, that does not mean you will be able to start a business on the same day.
There are still things you need to do that require some time and effort, especially when organizing all the legal documents and that’s the core focus of this article on how to start an LLC in Oregon.
However, if you wish to form your own Business entity, then starting an LLC in Oregon could just be a suitable solution for you. We’ll help you through the process and provide some additional helpful resources for reference.
Steps to Start an LLC in Oregon
1. Pick a name for your LLC
You need to first choose a name for your LLC before applying to form an Oregon business entity. However, do not just pick any name you like because there are rules concerning the name you choose. You can check the availability of your preferred business name at the state’s e-filings website.
Once you’ve found a name you want to use, make sure it does not conflict with an existing Oregon LLC. This is because you will have to submit the names of your organization and all of its members. You should also make your LLC name as easy to understand as possible because it may be used when people refer to your business or merchandise.
2. Develop a business plan
A well-planned business is better off than one that is not planned. This is why it is essential you develop a plan to ensure smooth operations moving forward. A good business plan will help you set out your company’s vision and goals, identify weaknesses and determine how best to overcome them.
Your business plan must be realistic, cost-effective, and possess the potential to generate revenue. It also should have a clear description of what makes your business unique from competitors.
3. File Articles of Organization
The next step to starting an LLC in Oregon is filing the appropriate documents to form a legal entity. Before you can file these documents, you must first pay a nonrefundable filing fee. Filing fees range from $100-$250 depending on the LLC’s assets and whether it has more than one member.
The documents detail what type of LLC you’re forming, the name of your organization, the name, and address of each member, as well as other information. You can file Articles of Organization through Oregon’s online filing system.
4. Set up LLC Operating Agreement
The next step to starting an LLC in Oregon is creating an operating agreement, which is a binding contract that regulates all aspects of your business entity. Your operating agreement will include provisions for member interest, manager authority, and voting rights amongst other things.
While the law does not mandate you to form an operating agreement, it is a good idea to do so. A well-drafted operating agreement will help prevent misunderstandings amongst your members and keep in line with your organization’s vision and mission.
5. Get an EIN for your business
Once you’ve started an LLC in Oregon, you will have to obtain a tax identification number from the IRS for your business entity. You get this number when you complete an application and send it to the IRS.
The Internal Revenue Service also allows you to apply for a Tax Identification Number online, although you will still have to print out the form, sign it, and mail it in. Once you have your EIN, you need to enter it in the Articles of Organization and Operating Agreement. Failure to register an EIN can result in penalties or fines from the IRS.
6. Decide on a registered agent to use
You need to designate a registered agent for your LLC in Oregon. A registered agent is a person or entity that handles official communication for your LLC with the county or state government agencies and courts.
You can use a professional registered agent or choose from the list of registered agents provided by the Secretary of State. You can also work directly with county and state offices to appoint an individual as the organization’s registered agent, such as an accountant, attorney, or business consultant.
7. Obtain Business Permits or License
While there is no requirement for obtaining a business license for your LLC in Oregon, you may need one depending on the nature of your business. For example, if your LLC is providing any type of professional services or selling goods or services to the public, you will need to register with the state’s agencies.
Depending on which type of service you are providing, this may require additional permits. You can find out which permits you need by contacting the county and city offices where you will primarily do business.
8. Understand the State Tax Requirements
There are a couple of taxes you will have to pay when you form an LLC in Oregon. You will be required to pay the standard employer payment, which is a tax on employees’ wages and benefits. This will be if your company employs at least one employee or if you elect this option as an employer.
Additionally, you will also be required to pay federal and state income taxes. You will need to pay federal tax at the individual’s tax rate and a corporation’s rate which is usually the same as your state. There are certain times when you can get an even lower tax rate.
Forming an LLC in Oregon is not too time-consuming or complicated. All you need to do is complete the necessary forms and then provide the state with the information they need to officially record your business. Once you’ve initiated the process to start an LLC in Oregon, it is highly recommended that you draft an operating agreement and register with the IRS.
These documents will help you run your business smoothly and efficiently by clearly outlining roles and responsibilities for its members as well as financial details such as what expenses can be covered during times of loss.