If you own a business that was created in a state other than Oregon, you will need to qualify or register that business in Oregon if you want to do business there. Here is an overview of the rules on how to qualify your foreign (non-Oregon) limited liability company (LLC) to do business in Oregon.
For Oregon purposes, if your LLC is formed in another state, then it is known as a foreign LLC in Oregon. In other words, foreign doesn’t mean from another country. Instead, it means your business was organized under the laws of another state. A domestic LLC, on the other hand, is one that is formed in the state where it is doing business. This is common usage throughout the United States. For example, an LLC formed in Alabama is a foreign LLC in Mississippi.
According to Oregon’s LLC Act, you are required to register your foreign company with the state of Oregon if you are “transacting business” in Oregon. What does this mean? Well, like most states, Oregon’s LLC Act does not specifically define the phrase “transacting business” in relation to foreign registrations.
However, state laws governing when foreign companies must collect state sales tax in their state provide some guidance on the issue. Under these laws, a business must have a physical presence in—or nexus with—the state in order to be required to collect state sales tax on sales to that state’s residents. Generally speaking, physical presence and nexus are synonymous, and mean having:
Certain exceptions may apply and the rules can get more complicated with things like Internet sales. Nevertheless, in general, if you have an office, a store, a warehouse, or employees in another state, you will need to qualify your LLC as a foreign company in that state. For more details, including some possible distinctions between physical presence and nexus, check Nolo’s articles on Internet Sales Tax: A 50-State Guide to State Laws.
Like most states, Oregon’s LLC Act specifies certain activities that do not constitute transacting business in the state. The items listed include:
The LLC Act also specifically states that the latter list is not exhaustive (other activities also may be exempt). For the full, legal description of each of these items, check Section 63.701 of the Oregon Revised Statutes. If your LLC’s only activity in Oregon is one or more of the listed items, you should not need to register with the state.
To register your business in Oregon, you must file an Application for Authority to Transact Business — Foreign Limited Liability Company with the Oregon Secretary of State (SOS). You can download a copy of the application form from the SOS website.
To complete the form, you must provide more or less the same information that you need to create an LLC in your home state. More specifically, for an Oregon application for registration, you need to provide:
You can file the application on paper or online. The filing fee is $275.
If your LLC transacts business in Oregon without authority, it cannot bring a lawsuit in any of the state’s courts. It also will be liable for fees that otherwise should have been paid. However, not being registered does not invalidate your LLC’s acts (for example, its contracts) or prevent your LLC from defending a lawsuit in the Oregon. Also, a member of the LLC is not liable for the LLC’s debts and obligations solely because the company transacted business in Oregon without authority.
If your business is organized as a corporation rather than an LLC, the rules and requirements for foreign qualification in Oregon are similar. You will, however, have to use a different application form, Application for Authority to Transact Business — Business/Professional. See the Oregon Secretary of State website for forms, information, and filing instructions for registering a foreign corporation in Oregon.