Articles of Organization

To form an Oregon LLC, you must file articles of organization with the Corporations Division of the Oregon Secretary of State. The articles must be signed by at least one person organizing the LLC and delivered, along with a copy, to the Corporations Division, Oregon Secretary of State for filing.

The articles of organization for your new Oregon LLC must include the following information:

• The LLC's name
• The LLC's registered agent and the address of its initial registered office
• Whether the LLC is to be manager-managed or member-managed
• The name and address of each organizer
• The period of the LLC's duration (either perpetual or for a specified time)
• Any other internal operating rules that the members want to specify

The articles may also include other items that the members wish to include (as long as they don't conflict with state law), even if they are also included in the operating agreement.

Your LLC is considered officially "organized" once the signed original of the articles of organization and the $50 filing fee is received by the Corporations Division of the Secretary of State's office. The organizer(s) who sign the articles must be at least 18 years of age, and the articles must indicate their name and title or capacity within the LLC.

There is also a $50 fee to file amended articles of organization.

Registered Agent and Office

All Oregon LLCs are required to have a registered in-state agent. This agent is the person or office designated to receive official state correspondence, including notice if the LLC is served with a lawsuit.

A registered agent in Oregon may be an individual state resident whose business office is identical with the LLC's registered office, or business entity authorized to do business in the State of Oregon. The registered office may be (but is not required to be) the LLC's place of business. The registered agent must have a business office identical with the registered office, which should generally be open during normal business hours.

Operating Agreement

Almost as critical for the LLC as the certificate of formation is the operating agreement. There isn't an official state requirement to have an operating agreement, but it's a vital internal document that specifies how your LLC will operate on both the day-to-day and strategic levels. If there is more than one member, the operating agreement must initially be approved unanimously in writing by the members.

The operating agreement should usually list the LLC's members, specify how much each member has invested, explain how profits will be divided, and state how much proportional "weight" each member has when issues are voted upon.

The operating agreement may also set forth meeting requirements such as the amount of required notice, what constitutes a quorum, voting rules, and so on, but it doesn't have to. Normally, however, the operating agreement does list requirements for the LLC that are already listed in state law and regulations. It can also include such items as restrictions or constraints on the power of the members to adopt, amend, or repeal the operating agreement.

Membership in the LLC

An LLC is required to have at least one member. Members must be either a natural person or a registered business entity. Members may become a member of or acquire an interest in the LLC when it is first started, when they acquire an interest in the LLC in accordance with the articles or operating agreement (or both), or upon consent of the majority of the members.

To join the LLC, the prospective member usually needs to make some kind of contribution-for example, pay cash or transfer property to the LLC-or undertake a binding obligation to do so.

A member can only resign from the LLC in a manner allowed by the articles of organization and/or the operating agreement. One or both of these documents will also usually state the minimum amount of time a member can maintain membership before being allowed to resign.

A member may voluntarily withdraw from the LLC when an event specified in the articles or operating agreement occurs, or after giving six months' notice, unless the articles or operating agreement prohibit the member from doing so. A member may not resign from the LLC except in a way that's in accord with the articles of organization and operating agreement.

A member may be liable for damages caused by a withdrawal not in accordance with the requirements in state law, the articles of operation, or the operating agreement.

Ongoing Requirements

Each Oregon LLC must keep the following records available at its office for review:

• Names and addresses of all past and present members and managers
• A copy of the filed articles of organization and any amendments
• Executed copies of any powers of attorney related to the articles
• Operating agreement with any amendments
• A copy of the LLC's federal, state, and local income tax returns for the three most recent tax years
• A copy of the LLC's financial statements for the three most recent years
• Status of the LLC's business and financial situation
• A description and statement of the agreed value of the property or services contributed by each member, the amount and timing when each member has agreed to contribute in the future, and the date on which each became a member
• If agreed upon, the time at which or the events upon the occurrence of which the LLC is dissolved and its affairs wound up

Also, it's a good idea to keep on file and available the minutes of the meeting of the board and any committees of the owners or members.

Additionally, Oregon LLCs must file an annual report (with a $50 fee) by the first anniversary of filing the LLC's articles of organization. After the first year, the state mails a renewal coupon to the LLC, which must be accompanied by a $50 fee. If names or addresses for the LLC need to be updated after the first annual report has been filed, an amendment to the annual report must be filed with the business registry office.

Dissolution

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

• Event(s) specified in the certificate of formation or operating agreement
• A unanimous member vote to dissolve (unless a certain percentage or proportion is stated in the certificate of formation or operating agreement)
• An event that makes it unlawful for the LLC to continue
• The LLC's duration as specified in the articles of organization or the operating agreement expires (if the LLC is not perpetual)
• When the LLC has no remaining members
• Administrative dissolution by the secretary of state
• A court order mandating dissolution

There is a $50 fee for filing articles of dissolution.

Taxes

Oregon imposes a personal income tax on business revenue that passes through to the individual. Certain local governments in Oregon also assess a business income tax. Wages earned by an employee, however, are not subject to the business income tax.

Articles of Incorporation

Oregon state law requires that the new Oregon corporation file articles of incorporation with the Secretary of State, including the following:

• The name and address of each incorporator and initial director.
• The number of shares that the corporation is authorized to issue.
• The name and address of the corporation's initial registered agent.
• The number of shares that the corporation is authorized to issue.

There must be at least one incorporator, either a natural person of legal age or a legal entity, who signs the articles of incorporation.

Oregon also permits optional provisions to be included in the certificate of incorporation for corporations wishing to specify additional criteria, including:

• Any limitation on the duration of the corporation's existence.
• The names and addresses of the initial directors.
• A par value for authorized shares or classes of shares.

Oregon allows a corporation to be formed for any lawful business activity. Except for professional corporations, there is no need to state the corporate purpose in the articles.

Registered Agent and Office

Oregon corporations must have a registered in-state agent who is designated to receive official state correspondence. The agent is the person or business entity designated to receive official state correspondence, including notice if the corporation is served with a lawsuit.

Every corporation must have a registered office in the state, which may be any of its places of business.

Bylaws

A corporation is required to keep its bylaws available at its primary executive office, but it is not required to file them with the state. The incorporators or board of directors should adopt the corporation's bylaws at their first meeting, insuring that there is no conflict with the articles of incorporation or state law. They should also keep the bylaws updated as time goes on.

Bylaws set forth the corporation's basic operating principles from both the managerial and legal perspectives, and should include, as a minimum:

• The authority of directors, how many there are, and how long they serve
• Officers' duties and responsibilities and how long they serve
• How major decisions are reached, with or without meetings
• How, when, and where shareholders' and directors' meetings are held
• How the corporation's stock is issued
• Requirements for publishing annual financial information to shareholders

Directors and Officers

The board of directors is responsible for making the corporation's major decisions. It must consist of one or more members. The number of directors should be specified in the certificate of incorporation, the bylaws, or both.

There must be at least one director, but there are no statutory eligibility requirements. However, the articles of incorporation or the bylaws may specify these requirements.

Officers must be listed in the bylaws or elected by the board of directors. The officers of a corporation oversee the day-to-day operations of the organization and carry out the strategic decisions made by the board of directors. There must be at least a president and a secretary. Their titles and duties are stated in the bylaws and/or specified by the board, but they must be organized so as to be able to sign instruments and stock certificates that comply with state law. Officers may appoint other officers in compliance with the bylaws and board of directors. One of the officers will have the duty of recording the proceedings of stockholder and director meetings and authenticating records for the corporation. An officer may hold more than one office simultaneously unless the certificate or bylaws state otherwise.

Required Reports

A report must be filed with the Oregon Secretary of State each year on the anniversary of its incorporation date, and must include:

• The corporation's name and its state or country of incorporation.
• The street address of its registered office and the name of its registered agent at that office.
• The address of the corporation's principal executive office, if different from the registered office.
• The names and addresses of the president and secretary of the corporation.
• The classification code category most closely designating the primary business activity of the corporation.
• The corporation's federal employer identification number (EIN).

The corporation must provide its shareholders a report of any indemnifications or expenses advanced to a director in connection with a proceeding by or for the benefit of the corporation, with or before notice of the next shareholders' meeting.

Taxes

Oregon imposes a flat rate of 6.6 percent on all corporate revenue generated within the state. Oregon corporations operating in more than one state pay corporate excise taxes according to an apportionment formula, but within the state, the formula is based only on in-state revenue.