Articles of Organization

The formation of an Oklahoma LLC means that you have to file articles of organization (along with the $100 filing fee) with the Business Filing Department of the Oklahoma Secretary of State's office. The articles, which must be signed by at least two persons organizing the LLC, must include:

• The LLC's name
• The duration of the LLC and, if not perpetual, the date of its dissolution
• The street address of the LLC's principal place of business
• The address of the LLC's registered office
• The name of the LLC's initial registered agent there

Your new LLC is officially deemed "organized" after the LLC's articles of organization and an exact copy are delivered to the Business Filing Department with the filing fee.

A certificate of organization will be issued and delivered, along with the conformed copy, to the LLC's representative by the state. The original articles of organization will be filed with the Secretary of State.

Registered Agent and Office

All Oklahoma LLCs must continuously maintain both a registered agent and registered office in the state-the person or office designated to receive official state legal and administrative correspondence.

An Oklahoma LLC's registered agent may be the LLC itself, an individual Oklahoma resident, or a corporation, LLC, or partnership authorized to do business in Oklahoma. The registered agent's business office must be the same as the corporation's registered office.

The registered office may be-but doesn't have to be-the LLC's place of business.

Operating Agreement

The LLC's next most critical document is its operating agreement. Having an operating agreement is not officially required by the state, but it's a very important internal document that sets forth how the LLC will run. The operating agreement should list the LLC's members, how much each one has invested, how any profits will be distributed, and how much relative weight each member has when voting.

The operating agreement can also include requirements for meetings (notice, quorum, voting rules, etc.) and similar functions, but it doesn't have to. Often, however, it does include operating constraints and allowances that are already contained in state law and regulations. It also may contain constraints on the members' authority to change or repeal the operating agreement or any provision thereof.

Membership in the LLC

An Oklahoma LLC must have at least one member. Members may acquire an interest in the LLC either in proportion to their contribution or in some other way that is in accordance with the LLC's operating agreement.

The contributions of a member to the LLC may consist of cash, property, services rendered, or a promissory note or other binding obligation to contribute cash or property or to perform services.

An Oklahoma LLC member is not allowed to withdraw from the LLC unless the LLC's written operating agreement specifically allows such a withdrawal. A member who withdraws due to wrongful conduct is liable to the LLC for any resulting damages, which may include the reasonable cost of replacing the services that the withdrawn member was obligated to perform. The operating agreement may also make provisions for expelling a member, with or without cause, which shall include reasonable provision for the distributable interest.

If the LLC is manager-managed, unless the articles of organization or the operating agreement states otherwise, managers will be elected by a majority vote of the members, and can be removed by the written agreement consent of the entire membership.

Ongoing Requirements

Every Oklahoma LLC must file an annual certificate with the Oklahoma Secretary of State confirming that it is an active business and providing the address of its principal place of business.

An Oklahoma LLC must keep the following types of records open for inspection at its principal executive office:

• The names and addresses of each current and former member and manager
• Records setting forth the relative voting rights of the members
• A copy of the articles of organization and any amendments
• Copies of the LLC's federal, state, and local income tax returns and financial statements for the past three years
• Copies of current and previous operating agreements and all amendments
• The amount of cash and a statement of the agreed-upon value of other property or services contributed by each member
• The times or events upon which members are to make any additional contributions
• The events which would trigger the LLC's dissolution and the winding up of its affairs

It's also a good idea to keep copies of the minutes of the various meetings of the members and managers.

Dissolution

An Oklahoma LLC is dissolved when any one of the following events occurs:

• On the occurrence of an event or events specified in the articles of organization or operating agreement
• Expiration of the LLC's duration
• Written agreement to dissolve by all members
• The entry of a court order

Taxes

An LLC offers members certain tax advantages over a corporate structure. This includes access to more deductions, since the LLC is not required to be a separate tax entity like a corporation. Instead, it is considered a "pass-through entity" for tax purposes, meaning that LLC owners report business profits and losses on their individual tax returns.

The tax rate for Oklahoma LLCs, therefore, varies based on the Oklahoma taxable net income per reporting period and the rest of the LLC owner/member's financial situation. Oklahoma's personal income tax structure consists of seven brackets with a top rate of 5.65 percent that takes effect at an income level of $8,700.

Oklahoma's top income tax rate is 30th highest among states levying personal income taxes.

Articles of Incorporation

Before it can begin conducting business in the state, a new Oklahoma corporation must file a certificate of incorporation with the Business Filing Department of the state Secretary of State's office. The certificate must be executed (signed) and delivered by at least one incorporator, who must be a natural person, partnership, association, or corporation.

The certificate must be accompanied by a $50 minimum fee based on the authorized capital specified in your certificate, calculated as follows:

1. For no-par shares (i.e., without par value), multiply the number of authorized shares by $50. This means that the minimum $50 filing fee allows you to authorize just one share without par value.
2. For shares with a stated par value, multiply the par value amount of each share by the number of par value shares authorized.

The filing fee for par value shares is $1 for each $1,000 of capital or fraction thereof. The minimum $50 filing fee allows you to authorize $50,000 of capital (for example, 50,000 shares with a par value of $1 each or 500,000 shares with a par value of 10 cents each). Most incorporators authorize par value shares with a total par value of $50,000 in order to authorize an adequate number of shares for the minimum filing fee.

The following information must be included in the certificate of incorporation:

• The name and address of each incorporator
• The total number of shares authorized for issue
• The par value of each share (or a statement that the shares have no par value) or, if applicable, the number of shares and par value of each class of shares 
• The address of the corporation's registered office in the state
• The name of the corporation's registered agent there 
• The nature of the corporation's business 
• If the powers of the incorporator(s) are to end when the certificate is filed, the names and addresses of the initial directors.

Oklahoma law also allows (but does not require) optional items to be included in the certificate of incorporation for those corporations who wish to formally specify additional information, such as:

• Provisions for managing the business and regulating its affairs
• A specific provision authorizing a court to order, in certain situations, a meeting between the corporation and its shareholders or creditors
• Preemptive shareholder rights
• Changing the number of votes required for corporate action
• The duration of the corporation, if not perpetual
• Personal liability of shareholders for corporate debts in certain situations.
• Limitations on a director's liability for money damages to the corporation or its shareholders in certain situations

Registered Agent and Office

Every Oklahoma corporation must have a registered agent in the state-the person or office designated to receive official state correspondence, both administrative and legal.

The registered agent must be an Oklahoma resident whose business office is the same as the registered office, the corporation itself, or a business entity authorized to conduct business in the Sooner State that has a business office identical to the registered office.

Bylaws

Bylaws lay out the corporation's basic managerial and legal operating principles that manage their business and affairs. An Oklahoma corporation must keep a copy of its bylaws at its principal executive office, but is not required to file them with the state. At its initial meeting, the incorporators, initial directors, or the board of directors should-prior to any payment of stock to the corporation-adopt corporate bylaws, and then keep them updated as time goes on.

The board of directors of a corporation may adopt, amend, or repeal bylaws, unless the articles reserve this right to the shareholders. Bylaws normally address:

• Shareholders and directors meetings
• The authority, number, and tenure of directors
• Voting procedures
• The duties, responsibilities, and tenure of officers
• How stock is issued
• How and when annual financial information is provided to shareholders

Directors and Officers

A corporation's board of directors consists of one or more individuals in accordance with the certificate of incorporation or bylaws. The number of directors may be increased or decreased by amending the certificate of incorporation or the bylaws, but no decrease in the number of directors can have the effect of shortening the term of any incumbent director.

Officers are listed in the initial bylaws or elected by the board of directors, and may appoint other officers in accordance with the bylaws. At least one officer will have the responsibility for preparing minutes of director and shareholder meetings.

It is allowed for an officer to hold more than one office in the corporation unless otherwise prohibited by law or by the corporation's bylaws.

Required Reports

Oklahoma corporations must file a report with the Oklahoma Tax Commission each year either between July 1 and August 31 or by the corporation's income tax return deadline, depending on the corporation's choice. This report must show:

• The amount of the corporation's authorized capital stock, interests, and certificates, and the amounts thereof which are paid up
• The number of units into which the corporation's stock is divided
• The par value of each stock unit and the number of units issued and outstanding
• The address of the corporation's place(s) of business
• The value of all property owned or used in its business in or out of the state
• The value of all property owned or used in its business within the state as it existed on the last day of the tax year
• The total amount of all business during the tax year, regardless of location
• The total amount of business transacted within the state during the tax year
• The names and addresses of the corporation's officers

Taxes

Oklahoma corporations are subject to a flat tax of six percent on all corporate income. This tax ranks the state 36th highest among states levying corporate income taxes. Oklahoma corporations also pay an annual franchise tax, currently set at a rate of $1.25 for each $1,000 of capital invested or used in Oklahoma. Corporations can pay the franchise tax annually when they file their Oklahoma corporate income tax returns.

"S corporation" status is recognized by the Oklahoma Secretary of State. A "subchapter S" corporation (frequently referred to as an "S corp") is treated as a pass-through entity for tax purposes in the same way as a sole proprietorship or partnership. The S corp does not file a tax return on its own behalf; instead, all tax-related data for the S corp is filed as part of the owner's individual income tax.