Do you own a limited liability company (LLC) created in a state other than Oregon, but you want to expand your business to the Beaver State? If so, you’ll need to qualify your foreign LLC in order to transact business in Oregon.
What is a foreign qualification and how do foreign LLCs function within the state of Oregon? In this guide, we’ll answer these questions and more.
Guru Tip: If you’d rather hire an online service to handle this process for you, many of the best LLC services can handle it for you.
What Is a Foreign Qualification?
A foreign qualification enables your limited liability company to do business in the state of Oregon. It doesn’t matter which state you originally formed your business in ― or in other words, the state your domestic LLC is located in ― as the qualification process to register a foreign LLC in Oregon is the same regardless of where your domestic LLC is based.
The confusion surrounding foreign qualification usually centers on what it means to “do business” in a state outside of your primary state. This gets especially problematic considering some states don’t strictly define what it means to transact business in that state. However, Oregon state law does define “doing business” in the state.
What Qualifies as ‘Doing Business’ in Oregon
The Oregon Department of Revenue provides the following definition: “‘Doing business’ means being engaged in any profit-seeking activity in Oregon. A taxpayer having one or more of the following in this state is doing business in Oregon:
What Does NOT Qualify as ‘Doing Business’ in Oregon
Meanwhile, according to the Secretary of State, the following activities are not considered to be “doing business” in Oregon, and you do not need to qualify a foreign LLC to pursue them:
How to Get Foreign Qualification in Oregon
If you want to foreign qualify your LLC in Oregon, you will need to file an Application to Transact Authority with the Corporation Division of the Secretary of State’s office. You can file this application online or by mail. In either case, this form will require the following information:
Filing Fee: $275, with the check made payable to the “Corporation Division.”
What Is the Penalty for Not Getting Foreign Qualification in Oregon?
There are two major penalties for failing to qualify a foreign LLC in Oregon. First, your business will not be able to file a lawsuit in an Oregon court (though it can still defend against lawsuits). And second, your business will be liable for any unpaid fees.
Should I Hire a Business Service Provider to File My Oregon Foreign Qualification?
If you don’t want to handle your foreign qualification on your own, you have options. Some entrepreneurs choose to hire a lawyer to prepare and file their Certificate of Authority, which can be a good option if you’re concerned about getting the job done right. However, attorney’s fees can be quite expensive.
The other option is to hire a business service provider like Incfile or ZenBusiness to register your foreign LLC with the state of Oregon.
These companies can typically get your foreign qualification done for a fraction of the price of an attorney. This is our preferred route if you don’t want to go with the DIY option.
The process for getting a foreign qualification in the state of Oregon isn’t particularly complicated compared to some other states. You can file online or by mail, and you can simply provide a registry number in place of a Certificate of Existence, which saves you an extra step. In addition, Oregon’s rules and regulations regarding which LLCs need to foreign qualify are considerably looser than many states. Still, this isn’t a process that should be taken lightly, because the penalties for not qualifying a foreign LLC in Oregon can be severe ― especially if you are unable to sue a third party in the event of a breach of contract.
We hope this article managed to answer your questions about obtaining an Oregon foreign qualification, and we wish you a prosperous business future!