The Oregon limited liability company (LLC) operating agreement is a legal document that outlines the day-to-day operations of the company and determines each member’s status in the company.
The LLC operating agreement, or business operating agreement, has a relatively free form, meaning that the company members are free to include any kind of provision in the operating agreement as long as it is within the legal framework provided by federal and state laws.
Is an Operating Agreement Required in Oregon?
No, the operating agreement is not a required document in Oregon. Although it is optional, many parties that want to optimize their business and prevent misunderstandings between members draft the operating agreement.
4 Main Types of Operating Agreements
Here, you can find the four main types of operating agreements used in Oregon:
Types of Operating Agreements
Single-member LLC operating agreement: Used when there is only one member establishing the company. It is good for determining the identity of the company and differentiating it from the identity of the member as an individual.
Multi-member LLC operating agreement: Here, the operating agreement determines each member’s initial contribution to the company, their interests, rights, and duties.
Member-managed LLC operating agreement: Used when the members decide to manage the company personally. It outlines their managerial rights and duties.
Manager-managed LLC operating agreement: This determines the managerial rights and duties of a professional manager in case the members decide to delegate their decision-making powers to them.
Laws and Legal Requirements for LLC Operating Agreements in Oregon
Chapter 63 of the Oregon Revised Statutes, also called the Oregon Limited Liability Company Act, regulates the status of LLCs in Oregon.
Moreover, Section 63.057 regulates the status of operating agreements in Oregon.
Section 63.001(25) defines an operating agreement as follows:
“‘Operating agreement’ means any valid agreement, written or oral, of the member or members as to the affairs of a limited liability company and the conduct of the limited liability company’s business.”
How to Form a Limited Liability Company (LLC) in Oregon
The easiest way to form an LLC in Oregon is to follow the steps below:
How to Form a LLC in Oregon
#1. Choose a Business Name For Your LLC
The first step in the process of LLC formation in Oregon is to choose a business name that is distinguishable from other registered business names in the state. The state authorities will reject any LLC registration application where the business name is indistinguishable from others.
To make sure your business name is distinguishable, you should do a search in the Oregon Business Registry Database.
#2. Choose the Type of LLC
You can choose between two main types of LLCs:
Domestic LLCs: Companies that are established and registered in Oregon.
Foreign LLCs: Companies that are founded outside Oregon but are registered in Oregon.
#3. Nominate an Agent
Before you submit your application, you should also nominate the registered agent. They will be in charge of receiving official notifications and documents on behalf of the LLC.
You can nominate an individual with a registered address in Oregon or an entity with the authority to operate in Oregon.
#4. File the Formation Documents
Depending on the type of LLC you are establishing, you should file different documents:
For foreign LLCs, you should file the Application for Authority to Transact Business. You can file it online or by filling out the form in hard copy. Foreign LLCs should also provide the Certificate of Existence from the state of the company’s initial establishment.
#5. Pay the Required Fee
For domestic LLCs, the filing fee is $100, while the filing fee for foreign LLCs is $275.
If you submit your application online, you will be able to pay with your credit card. If you are applying via mail, you should write a check, attach it to the application documents, and send it to the following address:
Secretary of State, Corporation Division, 255 Capitol St. NE, Suite 151, Salem, OR 97310-1327
#6. Create your LLC Operating Agreement
After registering your LLC, you should create an operating agreement outlining all your business procedures and preventing potential disputes between the members.