If you’re an entrepreneur in Oregon, you may be eager to start your business and sell to your customers. However, before you can open your storefront and make your first sale, you must fill out and file some administrative paperwork. For many small business owners, forming an Oregon LLC makes the most sense because it allows for pass-through income and minimal liability to each founding member.
Thankfully, Oregon makes the LLC formation process relatively simple and cost-effective. We’ve broken down all the various costs associated with forming an LLC so you can anticipate these expenses and get your business off the ground that much sooner.
The name of your new business venture is supremely important because it’s what you’ll use on every piece of paperwork. From the articles of organization to any business license, you must have a proper LLC name.
So, the first step to choosing a name is to ensure that it’s not already taken. The Oregon Secretary of State has a free business entity lookup tool you can use to search for other companies in the state. This tool allows you to find exact and partial matches so you can see if another company has a name similar to yours.
But what if you know your name is unique and want to reserve it so no one else takes it? In Oregon, you’ll have to file an Application for Name Reservation Form and pay a filing fee of $100. When you reserve a business name in Oregon, it will be yours for 120 days. Afterward, you must renew the reservation and pay a new filing fee.
While your LLC name may suit your business, what if you want to use a different name without forming a brand-new entity? In that case, you can register a DBA (doing business as). Many companies use DBAs to create more informal or informational names unrelated to their “official” name. DBAs give you much more flexibility to adjust your business as you see fit.
To register a DBA, you must file an Assumed Business Name form and pay a filing fee of $50. DBA registration is valid for two years before you have to renew it.
Once you have a name and are ready to officially register your business with the state, you must file an Articles of Organization form with the Secretary of State and pay a filing fee of $100.
It’s important to note that the articles of organization only provide basic information about your business to the SOS office, not a detailed account of your company’s structure. These details include the name, address, and organizing members of your LLC. You must also list your registered agent and their office if it differs from your company’s.
A registered agent is someone who can accept official and legal documents on behalf of your business. Oregon requires all LLCs to have a registered agent when filing the articles of organization.
If you’re creating a single-member LLC (meaning you’re the sole business owner), you can act as your own registered agent. Since you’re the only one who has to worry about official documentation, it may not make sense to hire a third-party agent.
However, if you’re forming a multi-member LLC, it’s often best to rely on a third-party registered agent service. This way, there’s no conflict of interest, and everyone will be notified when a letter is sent to the agent’s office. Typically, registered agents can charge anywhere from $199 to $400 for the year, depending on the size and complexity of your business.
An operating agreement is much more organized and detailed than the articles of organization. Oregon does not require an operating agreement, but it’s always smart to have this document available. This agreement outlines how your company will be structured, including each member’s responsibilities and duties. The agreement may also spell out what to do if a founding member dies or wishes to leave the business.
You can create this agreement yourself with your other founding partners. If you’re forming a single-member LLC, you may not need an operating agreement because you’re the only owner. However, multi-member LLCs need this document to ensure there is no confusion later on. So, while you can create it yourself, it’s often better to rely on a third-party service.
Typically, law firms and business consultation companies offer operating agreement creation services. The main advantage of using a third-party is that you know the agreement will be legally sound and will cover all potential scenarios. This way, there are no surprises when something happens to the business. Third-party creation services can charge anywhere from $200 to over $1,000.
Oregon is unique compared to most other states because it doesn’t impose a sales tax. So, there’s no need to get a seller’s permit or apply for a sales tax agreement. Also, Oregon does not have a generic business license requirement. Overall, if you’re starting a retail business in the Beaver State, you should be able to get your storefront (physical or digital) up and running immediately.
That said, other types of businesses require unique licensing. Here are some common options to consider when forming an LLC in Oregon.
Other types of businesses will also require additional licensing and permitting. For example, if you want to open a dispensary, a tattoo parlor, or a hair salon, you’ll need to apply for a permit with the corresponding state agency. Cities and counties may also set their own licensing fees and requirements, so you’ll have to do some homework before starting your business.
To maintain your LLC, you must file an annual report with the Secretary of State. In Oregon, the renewal date is the same as your registration date. So, if you formed your LLC on March 1st, you’ll need to file the annual report by March 1st every year. The SOS office sends a reminder letter 45 days before the date so you never forget.
The cost of filing this report is $100. Unless you’ve made any significant changes to your business in the last year (e.g., moving addresses, adding or losing members, etc.), the report will be pretty simple and straightforward.
Thankfully, while forming an LLC doesn’t cost too much in Oregon, you can write off most of these expenses on your business taxes. The IRS allows companies to deduct startup costs, such as the following:
Articles of Organization | $100 |
Food Service Permit (Multnomah County) | $730 to $1,160 |
Liquor License (Brewery) | $1,000 |
Business Name Reservation (Optional) | $100 |
DBA Registration (Optional) | $50 |
Registered Agent Services (Optional) | $199 to $400 annually |
Operating Agreement Creation (Optional) | $200 to $1,000+ |
As you can see, it’s not too expensive to form an LLC in Oregon, especially if you don’t need any extra permits or licenses. Although the state is not as much of a tax haven as other states, it’s a fantastic option for small businesses who want to connect with customers and avoid cumbersome sales taxes. Now that you have all this information, you can start your new venture as soon as possible!
Typically, it takes about two to three business days for your LLC to be approved in Oregon. If you mail your paperwork (instead of filing online), it could take longer.
Yes, you can absolutely use a business account to pay for startup costs and filing fees. However, if you’re trying to secure a business account before forming your LLC, keep in mind that most banks require excellent credit and a comprehensive business plan.
This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness. It also does not indicate any affiliation between Tailor Brands and any other brands, services or logos.
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