Thanks to their tax and liability benefits, many people who choose to start a business organize their new venture as a Limited Liability Company (LLC). However, although many online services will claim they can start your company in a few easy steps, the process requires careful consideration.
Here are five things to keep in mind as you move forward with your plans to start an LLC:
The name you choose is important
First, keep in mind the name of an LLC must include either “Limited Liability Company,” “LLC,” or “L.L.C.” in the name. It is also vital to ensure the name of your business is different from others filed in the state. The Oregon Secretary of State’s office maintains a list business owners can use to check the availability of their desired name.
An operating agreement provides additional security
Oregon does not require LLC’s to have an operating an agreement. However, creating one offers several benefits. The operating agreement can outline:
- Ownership duties
- Transfers of ownership
- Voting structures
- Tax liabilities
- Value of members’ interests
- Rights of first refusal
- Non-compete provisions
Without an operating agreement, resolving disputes can be much harder
Plan for reporting requirements
LLC’s in Oregon must file an Annual Report with the Secretary of State. The annual report includes any updates to the registered agent’s address, the LLC’s financial activities for the previous year, and a $100 fee.
You may need to acquire an IRS Employer Identification Number
Even if an LLC has no employees, if the company has more than one member, it must complete the EIN application and receive an employer number. LLCs with one member must acquire an EIN if they hire employees or if they decide to be taxed as a corporation.
To ensure your business starts on firm footing, consult with an Oregon small business attorney early in the process. They can help you determine what agencies require registration of your business, create your operating agreement, and guide you every step of the way.