Think about your LLC a year from now: raking in profits and taking Oregon by storm. You have big plans, but before your business can officially take off, you’ll need to make a bit of an investment.
And we’re not talking about renting office space or paying employees – before you sell a single product, there are startup costs associated with launching an LLC in Oregon.
While you’re making plans and dreaming big, make sure that you consider all the possible costs associated with starting an LLC. To help you out, we’ve compiled the most common Oregon startup fees here.
Quick Note: If you’d like to keep your costs of starting an LLC as simple and low as possible, consider hiring ZenBusiness – a reliable business formation service. To get a better idea of the value they offer and how it works, we compared them to the two most well known services:
Bare Minimum Cost to Start an LLC in Oregon
- Optional: LLC Name Reservation Fee
- $50 for online or paper submissions
- Required: Articles of Organization Fee
- $100 for online or paper submissions
Overall Oregon LLC Formation Costs
LLC Name Reservation Fee
Got a great business name in mind? Worried someone might take it? You might consider filing or a name reservation. Reserving a business name isn’t required, but it can be a helpful tool if you aren’t yet ready to start your LLC. In Oregon, instead of filing for a reservation, you’ll register a business name, then cancel that registration before filing your Articles of Organization. Registering a name will cost you $50 for a 120 day hold. But if you’re ready to start your business right away, skip this step and go straight to the Articles of Organization, as this will automatically register your name.
Articles of Organization Fee
This is the big one, the most important (and most expensive) form that you’ll file to start your Oregon LLC. Every Oregon LLC must have an Articles of Organization on record with the Secretary of State before commencing business in the state, so you’ll want to file one online or using a paper copy as soon as you are ready. It will cost $100, no matter how you file it, but it’s a payment you’ll only need to make once, since the Articles of Organization is a one-time filing.
Business and Professional Licenses
Not all Oregon LLCs need professional licenses to conduct business in the state, but some do. Bakeries, for example, need to obtain a Food Handling License from the Oregon Department of Agriculture. On top of that, cities and/or counties have their own licensure requirements, so you’ll need to consult not just state licenses page, but also your local government to see which licenses your LLC needs.
LLC Formation Service
Starting an LLC can be a complicated and time-consuming process. If you want to spend less time on paperwork and more time planning your business, you might opt for an LLC formation service. These services take care of the registration process for you, so you don’t have to spend the time on research, paperwork, and filings.
Most of these services (like ZenBusiness and Northwest) offer basic LLC formation service like Articles of Organization filing, tax consultations, and phone/email support for a flat rate, with options to pay more for premium packages with premium services like Employer Identification Numbers, Operating Agreements, and expedited filing.
Registered Agent Service
Appointing a registered agent is an important part of your LLC formation process. Your registered agent is responsible for handling sensitive legal and tax documents and keeping your business compliant with Oregon business law. In short, you need an agent you can trust.
While you can be the registered agent for your own LLC, this puts pressure on you to keep up with business filings and potential legal disputes. Sometimes it’s better to hand off that responsibility to a professional. A registered agent service ensures that your annual reports and other forms are filed efficiently and on-time, saving you from the penalties of delinquent filings and the stress of having to do it yourself.
Not all registered agent services are equal, so you’ll need to be careful in choosing one. Fortunately, we’ve done some research for you, and we recommend Northwest Registered Agent. In addition to registered agent services, Northwest also handles LLC formation — and they’ll include a registered agent free for one year when you form your business with them. We think they’re the most reliable choice, but if you’d like to evaluate all your options, check out our Best Registered Agent Services guide.
If you have questions or concerns about the LLC formation process or if it’s the best business structure for you, sometimes it’s best not to take chances and consult an attorney. They’re not cheap, but they can provide essential business advice, professional filing assistance, and peace of mind.
Some attorneys offer free consultations (usually 30-60 minutes) but will charge by the hour after that. On average, business attorneys charge between $150-350 per hour. Some will offer a flat rate for setting up an LLC, which can range from $500-2000.
Cost variations depend on the experience and location of the lawyer. Even though there are a whole lot of qualified, experienced business lawyers out there, you only need to choose one. When making this tough decision, consult a website like Avvo, which provides access to a database of Oregon attorneys, so you can search, compare, contrast, and find the best fit for your LLC.
Foreign Qualification Fee
This only applies if your LLC was formed in another state and is now expanding into Oregon. Foreign LLCs file “Applications for Authority” rather than the Articles of Organization.
All foreign business entities are required to foreign qualify in Oregon, or they could incur some pretty severe penalties. Refrain from doing business in the state until you’ve filed your Application for Authority online or on paper and paid the $275 fee. It’s pricey, but like the Articles of Organization, it’s only a one-time filing.
LLC Annual Fees
To keep its records current and accurate, the Secretary of State’s office requires every LLC to submit an Annual Report (or “Renewal”) before its anniversary date each year. You can file your Annual Reports online and each will cost you $100. Because this is a recurring fee, be sure to include it in your yearly budget.
Taxes for an Oregon LLC are fairly straightforward. The federal government classifies LLCs as “pass-through” entities, so they don’t need to file corporate tax returns. Instead, the owners and/or members report income and losses on their personal returns. Additionally, Oregon doesn’t impose “franchise” or “privilege” taxes on its LLCs like some states do, and there’s no in-state sales tax either.
The most common reason an LLC would need to pay Oregon taxes is if it hires employees. Any company with employees must pay a Withholding Tax and an Unemployment Insurance Tax. These both require a Business Identification Number, which you can obtain through the Oregon Business Directory or by submitting a Combined Employer’s Registration Form.
Or, if you’ve deliberately set up your LLC to be taxed as a corporation, it will need to file a corporate tax return and pay the 6.6-7.6% corporate income tax, depending on your income. Learn more about Oregon’s business taxes on the Department of Revenue website.
What If I Don’t Pay?
Looking at all these fees, you might be thinking: how can I pay less? While you might be tempted to look for loopholes or find a way around them, this could cause you bigger problems in the future.
Skip filing the Articles of Organization or the Application for Authority and you won’t be able to start doing business in the state. Miss an Annual Report and your LLC will be listed as “inactive,” which means it’s out of good standing with the state. Businesses without good standing cannot foreign qualify in most states, apply for many business loans, and renew most professional licenses. If you still haven’t filed your Annual Report 45 days after the due date, your LLC can be administratively dissolved.
Late tax payments will incur penalties as well. Late Withholding and Unemployment Insurance taxes, for example, will incur a penalty of 10% of the tax due, plus 1.5% interest per month. Learn more about Oregon’s employer tax laws here. In general, staying on top of your filings and taxes will save you a lot of money and trouble down the road.
Planning Your Expenses
By now, your budget spreadsheet might be looking a little crowded, but have no fear! Most of these are one-time fees that you won’t have to worry about again. Plus, with all these on the books, there won’t be any surprise costs when you register an LLC in Oregon.
Soon, you’ll have these fees behind you and you’ll be forging ahead, growing your business and earning profits. As you do, make sure to keep up with the few recurring fees – like Annual Reports – so your business doesn’t fall out of good standing.