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Oregon is a great place to start a business. First of all, the state boasts a highly educated workforce. For example, in the Portland area, almost half of the adult population has a bachelor’s degree or higher.
Secondly, the state has a very strong start-up community. Oregon’s pioneer spirit extends to its DIY culture and a sense of energy to create an independent business.
And lastly, Oregon’s Emerging Small Business certification program gives preference to young small businesses in a variety of government contract opportunities—including a large number of municipal contracts and city contracts.
So, let’s dive into how to start an LLC in Oregon step by step.
To understand how to start a business in Oregon, you need to understand entity formation. Limited Liability Companies (LLCs) and Corporations are the most popular business types.
Business formation is important because it sets your company apart as a professional company and not just a hobby.
A corporation is a legal entity created separately from those who own and operate it. A corporation’s debts and taxes are separate from its owners, thereby offering the greatest personal liability protection of all business structures. The two most common types of corporations are S and C corporations.
LLCs are the most popular business structure, blending the aspects of corporations, partnerships, and sole proprietorships into a simple and flexible business entity. Like corporations, LLC formation protects the owner’s personal assets and also shields them from personal liability similar to a corporation. They also possess the “pass-through” tax benefits of a partnership.
There are two types of LLCs. LLC run by just own person (single-member LLC) and LLCs run by multiple people (multi-member LLCs)
Forming an LLC in Oregon can be difficult and confusing, especially as a first time business owner. But with a company like Inc Authority in your corner, you’ll not only have your LLC formed for you, but you’ll also get expert guidance beyond business formation, so you never have to wonder or worry about what to do next!
DBAs (which stands for “doing business as”) grant business owners the ability to conduct business under an assumed name. A DBA is also referred to as a fictitious business name and is an authorization by the state for your business to operate under an assumed name.
For sole proprietors and owners of LLCs, DBAs offer an affordable way to gain legal recognition for the secondary name of your choice.
A DBA provides privileges like the ability to open a bank account, create enforceable contracts and establish federal employer tax status (getting an EIN). It’s possible to file multiple DBAs, allowing a single LLC to operate different businesses under the same legal umbrella. If you’re starting a business or expanding your LLC in Oregon, get the proper legal recognition early on to start off on the right legal footing.
The Oregon Secretary of State charges a $100 fee to file the Articles of Organization. Oregon LLCs are also required to file an annual report each year with the Secretary of State. The filing fee for domestic LLCs is $100 and the fee for foreign LLCs is $275. When you compare this cost to Massachusetts’ $500 filing fee, you’ll realize how lucky you are to be in such an affordable state.
Under Oregon law, an LLC name must include the words “Limited Liability Company” or the abbreviations “LLC” or “L.L.C.”
Your LLC’s name must 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 may 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.
You don’t have to use your LLC’s official legal name registered in your Articles of Organization when you do business. Instead, you can use an assumed business name, also called a fictitious business name, “DBA” (short for doing business as), or trade name.
To do so in Oregon, you must register your assumed name with the Oregon Secretary of State. You may register online, or complete and mail an Assumed Business Name–New Registration form. The filing fee is $50. The registration must be renewed every two years.
Let’s take a look at how to register a business in Oregon, including payables such as the cost, government fees, and so on.
An Oregon LLC is created by filing Articles of Organization-Limited Liability Company with the Secretary of State. The articles must include:
The articles may be filed online or by mail. The filing fee is $100.
An LLC operating agreement is not required in Oregon, but creating one is highly advisable. The Operating Agreement is the primary document that establishes the rights, powers, duties, liabilities, and obligations of the members among themselves and to the LLC.
The Operating Agreement is an internal document and is not filed with the Department of State. If an existing or newly created LLC does not adopt an operating agreement, its existing articles of organization, bylaws or operating agreement, and/or its member control or limited liability company agreement will collectively become its operating agreement.
Issues that should be defined by your LLC Operating Agreement include:
Once the operating agreement has been adopted, it will provide protection for the members of your LLC. When the members of your LLC have agreed on the terms of your operating agreement and have signed the document, you should keep the agreement in a secure location.
Inc Authority can remind you to do or do for you if you choose to have us handle the paperwork.
The next step you’ll want to tackle is getting your EIN or Tax ID number (TIN). This number is like your business’s social security number, separating you from your business. This protects you from fraud and identity theft.
Additionally, an EIN is required by your bank to open a Business Checking Account, file federal tax returns, obtain payroll services and credit cards, and pay for any LLC cost that Oregon laws require.
To apply for your EIN, you’ll need to complete form SS-4, which can be found on the IRS website.
There are an estimated 38 million home-based businesses in the U.S., so if you’re thinking about starting a business in your home, you’re definitely not alone.
But did you know that all businesses are required by law to have an address where they can accept service of legal documents (like a service of process) from the state or government agencies during normal business days and hours? Without an office, that would be your street address or P.O. box.
As you can imagine, that’s not always possible (or advisable) with a home-based or foreign-filed business. That’s where a registered agent comes in.
A registered agent is a responsible third-party in the same state as your business who receives official government notifications (usually tax forms and notice of lawsuits) on behalf of your LLC in Oregon.
Even if you aren’t planning on starting a home-based business or foreign LLC, having a registered agent is still advisable because it will:
Every Oregon business must have an agent for service of process in the state. This is an individual or business entity that agrees to accept legal papers on the LLC’s behalf if it is sued. The resident agent (called registered agent in most states) must be a Oregon resident or a business entity authorized to do business in Oregon. The registered agent must have a physical street address in Oregon.
Learn more about our registered agent services here.
To keep your personal and business expenses separate and to stay in good standing with the Internal Revenue Service (IRS), you need to open a business bank account for your LLC or corporation.
Setting up a separate bank account for your company makes it easier to for you do business, manage a cash balance, complete, and file your income tax returns with the Department of Revenue, deduct business expenses for taxes, conduct proper accounting, and execute employee payroll. Bank accounts also provide better protection in the event of legal action.
Additionally, business bank accounts create historical relevance through the relationship established with the bank, and can create unrestricted access to long-term funding options, business credit cards, and other financial solutions.
Not all business bank accounts are created equal. That’s why it’s important to distinguish between the good, the bad, and the best business bank accounts.
A business checking is the most common type of business bank account and the first one you’ll want to open for your business. This because business check accounts allow you to:
This one should come as no surprise. A business savings account (like a personal savings accounts) lets you safely save money in a bank. You don’t need this right away though, only when you have an abundance of capital sitting in your business checking account, will you need to open a savings account. It allows you to:
A business certificate of deposit (CD) is a term account that offers maximum security and a guaranteed rate of return. You agree to lend your business’s money to the bank for a set period of time at an agreed-upon interest rate. The interest rates are usually higher than you’d receive from a business savings account or interest-bearing business checking account.
Here are the main features of a business certificate of deposit:
This is a lesser-known type of business a bank account and isn’t for every business owner. You’ll want this type of account if you have a lot of money saved, want higher interest rates than a business savings account or interest-bearing business checking account, but still want some access to your money.
Here are the main features of a business money market account:
Opening a business bank account is as simple as gathering some information together and completing an application. Here are the steps to open a business checking account:
At Inc Authority, we make getting a business bank account easy. How so? Well, when you form your business with us, you gain access to a free Bank of America business checking account. So, don’t wait! Form your LLC in Oregon today!
Additional tax and regulatory requirements may apply to your Oregon LLC. These may include:
EIN: If your LLC has more than one member, it must obtain its own IRS Employee Identification Number (EIN), even if it has no employees. If you form a one-member LLC, you still need to obtain an EIN or elect to have it taxed as a corporation instead of a sole proprietorship (disregarded entity). You may obtain an EIN by completing an online EIN application on the IRS website. There is no filing fee.
Business Licenses: Depending on its type of business and where it is located, your LLC may need to obtain other local and state business licenses. For details, see How to Start a Business in Oregon and the searchable Oregon License Directory.
Department of Revenue: In some cases, for example if you have employees, you’ll need to register with the Oregon Department of Revenue (DOR).
All Oregon LLCs and foreign LLCs authorized to do business in the state must file an Annual Report with the Oregon Secretary of State. LLC annual reports are due for the year in which they are filed. The annual report must be received by the Office of the Secretary of State prior to your LLC’s anniversary date to avoid late filing penalties.
You must file the report online through the Oregon Secretary of State Business Registry Web Renewal webpage. Blank report forms are not available for download. Instead, if you visit the Web Renewal webpage, you can generate a form containing key information for your LLC. The fee for filing the annual report is $100 for domestic LLCs and $275 for foreign LLCs.
Forming a professional LLC or corporation in Oregon is an exciting opportunity, but like starting any business it can be overwhelming. Why not let the business experts at Inc Authority do all the heavy lifting for you?
We’ll form your LLC or corporation, run a business name check, get your EIN, and make sure you have all the licenses and permits needed to run your business. We can also advise you on the things you need to pay, such as LLC cost, Oregon state fees, and other payables.
Not to mention we offer a ton of free management and report tools to help make running your business as simple as possible. Please contact us or visit our website today to get started!
Incorporating is the most powerful thing you can do to legitimize your business. And at IncAuthority.com, our setup LLC services are 100% free. Always. So, don’t wait. Form your free LLC today and enjoy the protection due to you and your business under the law.
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