An Oregon LLC operating agreement dictates a company’s operations for all company members to reference. In this kind of agreement, you can record information related to your company’s daily activities, ownership division, and general purpose.
All company members can come together to determine the components of their operating agreement. Once they reach a consensus, they can each sign the document to legitimize it. From there, each member can retain a copy to put in their personal archives.
Is an LLC Operating Agreement Required in Oregon?
No, an operating agreement isn’t required in Oregon. However, it can help you outline all the company’s important financial and operational decisions and decide how it will conduct itself.
Title 7, Chapter 63 of the Oregon Administrative Rules contains the official rules for establishing an LLC in Oregon. Although LLC owners can generally operate their business however they see fit, these laws offer some uniformity for businesses within the state.
If you want to set up an operating agreement, you can review the operating agreement statute within Chapter 63. This statute is § 63.057, and it states that an operating agreement can serve as a guideline for regulating and managing an LLC’s affairs as long as the company owners aren’t inconsistent with the law or the established articles of organization.
Costs and Fees
Familiarize yourself with some of the costs and fees of starting and operating an LLC in Oregon:
- Filing fee for a domestic LLC: $100
- Filing fee for a foreign LLC: $275
- Name reservation fee: $100
- Annual report fee: $100
How to Form an LLC in Oregon
Forming an LLC in Oregon is a relatively simple process, which is evident in the following steps:
Step 1 – Choose a Name
You can begin by choosing a unique name for your business. Don’t forget to include some version of “Limited Liability Company,” including LLC or L.L.C., at the end of your business name, as this identifies your company’s entity type.
Select a name that accurately reflects your offerings as a business. You’ll have a lot of creative freedom when picking a name, but ensure you don’t include vulgar language or prohibited phrases.
The name of your business must be different from any other business registered with the Secretary of State. You can check the Oregon Business Directory to find out if another entity has already claimed a name you want.
Step 2 – Choose a Registered Agent
Oregon LLCs are also required to have a registered agent. A registered agent is a person or business responsible for receiving official documents on the company’s behalf. So, if the LLC gets sued, the registered agent will be the one who receives the paperwork.
A registered agent can be a person or a business entity, such as another LLC if the person or business has a physical street address in Oregon. If you don’t want to be your company’s registered agent and don’t want to ask a person or business to fulfill the role, you can use a registered agent service.
Step 3 – File the Articles of Organization
Next, you’ll want to fill out the articles of organization for your company and file them with the state. This document should include information such as the business’s name and address, the registered agent’s name and address, the LLC’s duration (if applicable), and what kind of business the LLC will be conducting.
Step 4 – Fill Out the Operating Agreement
You can skip this step if you decide not to use an operating agreement. Oregon law doesn’t demand creating an operating agreement, but this document can help you better organize your business and lay the ground rules.
Some information to include in your operating agreement is:
- The selection process for managing members
- The departure process for managing members who wish to leave
- A non-compete clause, if desired
- Profit sharing procedures
- The dissolution process
- Members’ distinct responsibilities
Step 5 – Set Up An EIN
You’ll want to get an Employee Identification Number (EIN) from the IRS next. Even if you don’t have any employees, getting an EIN is still essential. This number is like the social security number for your business, and you can use it to file your taxes and open bank accounts.
Step 6 – Comply with Other Regulatory Requirements
Once you’ve filed all the necessary paperwork and set up an EIN, all that’s left to do is to ensure you comply with any other regulatory requirements, such as acquiring business licenses or permits and paying your taxes on time.
Also, don’t forget to file the annual report each year by your company’s anniversary date and pay the $100 filing fee.