Not every limited liability company (LLC) lasts forever. In fact, many LLCs in Oregon are only intended to operate for a designated time period. Whatever your reasoning for closing up shop, the state of Oregon has a specific process that all LLCs must go through before they are considered to be officially dissolved.
Which steps are involved in the Oregon LLC dissolution process? Are there different processes for businesses based in Oregon and those expanded from other states? When do you need to dissolve your LLC? We’ll answer all of these questions and more in this article.
How Do You Dissolve an Oregon LLC?
When closing a business registered as an LLC in the state of Oregon, you’ll need to take care to dissolve your business exactly as the state outlines. The most important part of this process is filing the correct paperwork with the relevant legal entities, but this is far from the only vital step.
In addition to filing documentation of your Oregon LLC dissolution, you will need to liquidate the assets of your business, notify all individuals and business entities that have an interest in your company, and resolve any outstanding liabilities with vendors, suppliers, or clients.
There are potentially severe penalties for failing to comply with the Oregon LLC dissolution process, and you as a business owner could be personally responsible for your LLC’s liabilities and debts. Therefore, it’s extremely important that you complete each step outlined in this guide to ensure an effective and compliant dissolution.
As for the question of when you should dissolve your LLC, you should do this as soon as you’re certain you will no longer conduct business through this entity. This gives you an opportunity to close up shop with the knowledge that you’re not transacting any business after you start the dissolution process.
Dissolution for Domestic Oregon LLCs
Is your LLC based in Oregon, and registered as a domestic entity in this state? If so, you’ll start your dissolution process with a document known as the Articles of Dissolution. This form will include some crucial information about your business, so you should fill it out carefully and accurately.
Among the info you’ll need to complete this form is the official business name of your LLC, the effective date of your dissolution, the signature, printed name, and title of your LLC’s members, and a name and phone number where the state can reach a representative of your business if they have any questions.
After you’ve filled out the form, you will need to send it with your $100 filing fee to the Secretary of State Corporation Division by mail, fax, or in person. You can view estimated turnaround times in real time by visiting the Secretary of State website and checking the “Filing Waiting Times” box. At the time of this writing, the expected turnaround time for a faxed or mailed business filing was roughly one business day, although these processing speeds can vary quite a bit.
In addition, the state has a handy guide to closing a business that suggests some additional steps, such as contacting the Oregon Department of Revenue to change your company’s tax status.
But what does this process look like for a business that was formed outside the state and then expanded to Oregon?
Dissolution for Foreign LLCs in Oregon
If you operate a foreign LLC in the state of Oregon, the dissolution process looks quite different than it does for domestic entities. In fact, it’s actually technically called a withdrawal rather than a dissolution.
To dissolve a foreign LLC in this state, you’ll first complete the Withdrawal of Authority to Transact Business document. Much of the information for this form is the same as the info provided for the Articles of Dissolution, but there are some differences for the foreign version.
This form requires your LLC’s official business name, the jurisdiction where your LLC was originally registered, an indication of your surrender of authority and the revocation of your registered agent’s authority, a mailing address for potential future service of process deliveries, a notification that you will inform the state if you change this address, the signatures, printed names, and titles of your LLC’s members, and a contact name and phone number in case the state has any questions.
Once you’ve finished filling out this form, you should submit it to the Corporations Division along with your $275 filing fee. As with the Articles of Dissolution, this filing can be submitted by mail, fax, or by hand, and you can visit the Secretary of State website for estimated turnaround times.
Involuntary Dissolutions in Oregon
We should also discuss the potential for an LLC to be involuntarily dissolved by the state. There are several reasons this could happen, and most of them revolve around significant mistakes made by the LLC’s ownership group.
For instance, Oregon could involuntarily dissolve your LLC if you fail to file your annual reports, if you fail to pay any fees assessed upon your business by the state, if your business fails to comply with an order from the Secretary of State, if the Department of Revenue recommends the dissolution, if your LLC fails to maintain a registered agent, or if you fail to inform the state that you have changed registered agents.
It’s obviously never advisable to operate your LLC in a way that leads to the state dissolving it against your will. However, the penalties in this state aren’t terribly punitive. If the state administratively dissolves your LLC, you’ll need to correct the issues that led to the dissolution, file a reinstatement request form, and pay a $100 fee, along with any other fees that may apply.
Still, if you keep operating your business after the state involuntarily dissolves it, you could open yourself up to all sorts of legal issues due to the continued operation of a non-compliant entity. In general, you should be as careful as possible when it comes to following the rules and regulations in this state.
It’s not that the process for dissolving or withdrawing your LLC in Oregon is terribly difficult. However, it is a process that you need to take great care to complete in a compliant fashion, or you could expose your business to a wide variety of potential legal complications and financial penalties. Trust us when we say it’s much smarter and easier to simply follow the directions with care to avoid any issues.
Do you need more information about operating an LLC in Oregon? Take a look at the following resources: