Oregon Foreign Qualification

Your business is growing, and you’re planning an expansion to other states. It’s a good problem to have!

But it’s not quite as simple as choosing another location. Because each state has different rules and requirements for business operations, you may need a “foreign qualification” in each state where you plan to do business.

It’s a common misconception that foreign qualification is only for businesses operating outside the U.S. But in this case, “foreign” refers to any business operating in a state that isn’t the state where the LLC was originally formed.

For example, if your LLC is registered in Washington and you are looking to open a second location in Oregon, you may need to complete a foreign qualification in Oregon before you can expand there.

Important Note: If you’d like to save time and have the foreign qualification paperwork taken care of for you, many of the best LLC services can handle this task for you.

What happens if I fail to foreign qualify before doing business in Oregon?

Foreign qualifying is essentially asking permission to do business in the state of Oregon. And the notion that “it’s easier to ask forgiveness than permission” doesn’t apply here. Failing to foreign qualify before starting a business in Oregon yields consequences that are far costlier than registering in the first place. If you fail to foreign qualify, your business:

  • Will no longer be allowed to maintain a lawsuit or proceeding in Oregon courts
  • Can have any of its ongoing legal proceedings stayed by a court
  • Will owe the state all of the fees and LLC taxes it would have paid for the time it was doing in-state business had it been properly registered

Those penalties aren’t worth the risk. Not only will your LLC lose its legal footing in the state, but it will also need to pay all the accumulated fees at once, and they can add up quickly.

But if you transact business without authorization in Oregon, it won’t completely disengage your LLC from its in-state activities. Your current contracts will still be considered valid, and you will still be able to defend lawsuits in state courts.

Want to dig into the legal context for these penalties? Check out the Oregon Revised Statutes Section 63.704.

What is considered “doing business” in Oregon?

We’ve established why you shouldn’t do business without a foreign qualification. But what exactly does it mean to “do business” in Oregon? Many states are vague about this definition, but the Oregon Secretary of State website provides a few specifics. They say you are considered to be “doing business” in Oregon and required to foreign qualify if:

  • You have a stock of goods stored in the state
  • Your LLC has an office or another place of business in the state (like stores or warehouses)
  • Employees or other representatives are providing goods/services to customers in the state for your LLC
  • Your LLC has any other economic presence through which it uses the Oregon economy to produce income

Generally, according to the site, “if you expect to profit from your activities in Oregon, you are probably doing business in Oregon.” In addition, it’s important to always stay on top of your LLC’s taxation requirements to avoid any unwelcome surprises.

If you’re unsure whether or not you need to file for a foreign qualification in Oregon, we suggest seeking legal counsel.

Could I be exempt from foreign qualifying in Oregon?

The foreign qualification, however, isn’t a hard and fast rule for all LLCs performing any kind of action in Oregon. Certain actions do not qualify as “doing business” and therefore don’t require a foreign qualification. Some examples are:

  • Defending, settling, or maintaining any proceeding in an Oregon court
  • Facilitating activities solely related to internal affairs, like meetings of LLC members and/or managers
  • Maintaining bank accounts
  • Holding in-state offices/agencies for the exchange or registration of the LLC’s own securities
  • Selling products or services through independent contractors
  • Creating or acquiring indebtedness
  • Securing and collecting debts
  • Owning real or personal property in Oregon
  • One isolated transaction, completed within 30 days, not in line with a series of similar transactions
  • Transacting business in interstate commerce

See all of your Oregon business activities listed here? You’re most likely exempt from foreign qualifying there. However, it’s still a good idea to check over the details in the Revised Statutes Section 63.701 and contact an attorney if you have any questions.

How to Foreign Qualify Your LLC in Oregon

Foreign qualification in Oregon is simple if you know where to find and send your forms. If you or your legal counsel has decided to foreign qualify your LLC in Oregon, the Application for Authority is your go-to form, and you can submit it online, by mail, or in person. Find resources and directions for all three options here.

Want to get it done as quickly as possible? File online. On the Foreign LLC page, click “Register online” in the Application for Authority section. This will take you to the online filing portal, where you can create an account to continue. Then, just follow the on-screen instructions and when you finish, you’ll be able to pay the $275 fee with a credit or debit card.

But if you’re someone who wants to leave a paper trail, download the application here. Complete it and include a $275 check, made payable to “Corporation Division.” The Secretary of State provides detailed instructions if you need assistance. Finished? Mail it to:

Secretary of State – Corporation Division

255 Capitol St. NE, Suite 151

Salem, OR 97310-1327

Regardless of your filing method, you’ll need to provide verification from the state in which your LLC was formed. This can take the form of a web-verifiable registry number or a Certificate of Good Standing (current within 60 days).

Filing for foreign qualification is a big step, so if you’re eager to see when your LLC has been approved, you can check the Secretary of State’s processing times, updated regularly on the Business homepage. At the time of this writing, online submissions were processed the same day, while mailed or faxed documents were taking about five weeks.

After your form is in and your fee is paid, sit back, take a deep breath, and pat yourself on the back. Your LLC is on its way to foreign qualification and you’re embarking on another chapter in the life of your business.

Name Requirements to Remember

Don’t forget that, like other states, Oregon has its own business name requirements. Make sure to follow them, or you might hit a snag in your foreign qualification process. The state requires that your LLC name:

  • Contains an identifier like “limited liability company,” “L.L.C.,” or LLC”
  • Doesn’t use the terms “cooperative,” “corporation,” “corp.,” “incorporated,” “Inc.,” “limited partnership,” “L.P.,” “LP,” “Ltd.,” “limited liability partnership,” “L.L.P.,” or “LLP”
  • Is distinguishable and available in the Secretary of State business records. Perform an Oregon LLC name search to make sure the name you want is available.

You can also reserve your Oregon business name if you’re not quite ready to foreign qualify your LLC.

Should I hire a service to file my Oregon foreign LLC?

Considering all the work that goes into expanding your business to a new state, you’ve likely got a lot on your plate. Rather than trying to juggle everything yourself, you can bring on an individual or company to help you secure your LLC’s Oregon foreign qualification.

For example, business attorneys understand all the legal nuances involved, providing peace of mind that the job will get done correctly. But if you go this route, be sure you have the budget for it. Lawyer fees for Oregon foreign LLC qualifications can be a prohibitively expensive option for businesses operating on tight budgets.

If you’re operating on a limited budget, but still want to have your Oregon foreign LLC professionally registered, go with an online business service provider. There are plenty of reputable companies that can help you out with Oregon foreign qualifications, but here are a couple of our favorites:

  • MyCompanyWorks ($99): MyCompanyWorks is one of the only service providers offering foreign qualifications for less than $100. This company receives excellent customer reviews and has a great track record of success, making it a smart choice for a wide range of entrepreneurs.
  • IncFile ($149): IncFile offers a free LLC formation service that we have always appreciated, and its pricing for foreign qualifications is a reasonable $149. IncFile has the best customer feedback reputation in the industry, with tens of thousands of positive reviews available online.
  • Northwest Registered Agent ($225): Northwest is more of a premium service, with the best customer support in the industry, in our opinion. They also include a year of their namesake registered agent service with every foreign qualification. There’s a reason Northwest is our #1 pick among the best registered agent services!

Frequently Asked Questions

When Is the Best Time to Foreign Qualify an LLC?

We think you should foreign qualify your LLC before you begin conducting business in a new state. If you don’t, your business could be subject to a broad range of fines and penalties for operating an LLC in a state where you don’t have permission to do so.

How Long Does It Take Oregon to Process a Foreign Qualification?

You’ll typically need to wait roughly five weeks for the state to process a mailed or faxed application. However, online submissions are usually processed within a few hours.

Where Can I Learn More About the Oregon LLC Licensing and Permitting Requirements?

Chances are, you’ll require at least one license or permit to operate your LLC in compliance with Oregon state law. For more information about business licenses and more in this state, check out Oregon’s State License Requirements webpage.

Do I Need to File an Annual Report for My Foreign LLC in Oregon?

Yes. Whether you operate a domestic or foreign LLC in this state, you are required to file an Oregon LLC Annual Report.

What Is the Total Expected Cost of Operating an LLC in Oregon?

The overall costs of operating an Oregon LLC can vary considerably based on the specifics of your business. However, we created a helpful guide to help you identify and plan for every expense your LLC will face in this state.

Should I Use an LLC Service, Hire an Attorney, or Foreign Qualify My Own LLC?

The answer to this question lies in your personal preferences, but we can give some general pointers. An attorney will cost the most by a mile, but also provides expertise you won’t find with the other options. The DIY route is free of charge but can require quite a bit of legwork and provides no peace of mind that the process is being completed correctly.

Using an LLC service means your business will be foreign qualified by professionals who know what they’re doing, while also costing significantly less than a lawyer. This “best of both worlds” attribute is what makes LLC services our preferred option.

How Do Online LLC Services Work?

Using an online LLC service removes much of the hassle from the foreign qualification process. With these services, all you need to do is provide them with the name, location, and industry your business operates in, along with some info about yourself and your Oregon registered agent.

The service then registers your Application for Authority with the state to qualify your LLC to do business in Oregon.

Are LLC Service Websites Legit?

Absolutely. There are quite a few reputable companies offering LLC formation service and foreign qualifications these days, including the two options we discussed earlier: MyCompanyWorks and IncFile.

In fact, while we certainly have our opinions about which ones offer the best pricing and features, every one of the incorporation services we discuss on this website is entirely legitimate and trustworthy.

Need to save time?

Let’s face it, there’s never enough time in the day, especially when you’re running a company. And properly registering your LLC in Oregon involves research and time, time that you could be using to continue growing your business.

If the thought of paperwork, fees and state correspondence makes your head spin, consider using a service like Northwest Registered Agent to foreign qualify your business. Services like Northwest ensure that your forms are filed correctly and on time, potentially saving you thousands of dollars in penalties, not to mention a bunch of time and stress.

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