Formation of Limited Liability Company with the state of Oregon (USA)
Limited Liability Companies (LLC) are regulated by Chapter 63 Limited Liability Companies of Commercial Code, Oregon Statues, Vol. 2. An LLC is a combination of a corporation and a partnership which has become extremely popular in recent years. Like a corporation, an LLC has a legal existence separate from its owners; and the owners and managers are not personally liable for the company’s debts and obligations. Like a partnership or an S-corporation, an LLC is automatically treated as a pass-through entity for tax purposes. Key elements of the Oregon LLC include:
· The Oregon LLC Act gives members contractual freedom to create voting and non-voting classes of membership, customize their capital contributions and shares of profits and losses .
· The Articles of Organization or an LLC Agreement may not only govern the allocation of profits and losses, but may also govern the voting relationship among members.
· Personal liability is limited for owners and managers to the amount of their investment in the company, just like a corporation.
· Non-U.S. owners of an Oregon LLC with no U.S. source income pay no U.S. taxes whatsoever. The Oregon LLC may be formed by one or more organizer or member.
The Oregon LLC company may not use a name identical or similar to an existing company within the State of Oregon and must end in the words or abbreviations ‘Limited Liability Company’, ‘L.L.C’., or ‘LLC’. The use of the following words is also prohibited: Bank, Insurance, or Reinsurance.
Articles Of Organization And Operating Agreement
A corporation is legally created by filing Articles of Incorporation with the Oregon Secretary of State. The Articles must include: the LLC’s name and registered address, name of registered agent, name and address of each organizer of the LLC and whether the LLC will be member-managed or manager-managed.
An LLC does not issue shares and therefore does not have shareholders. The owners of an LLC are referred to as members. An Oregon LLC may have a minimum of one Member (owner) or more. Members may be individuals or corporate bodies of any citizenship or jurisdiction. There is no limit on the number of members allowed in the Oregon LLC.
The management of an Oregon LLC is based on an agreement between its owners, who are known as members. An Oregon LLC may, but is not required to, adopt an Operating Agreement. Management of an LLC can be governed by its member(s) or by elected manager(s).
In a member-managed LLC, every member has equal rights in the management and conduct of the LLC’s business and may be decided by a majority of the members. In a manager-managed LLC, the managers have equal rights in the management and conduct of the LLC’s business may be exclusively decided by the manager or, if more than one, by a majority of the managers. All of these default rules can be altered by the articles of organization or an operating agreement.
The LLC must have at least one manager of any nationality.
Registered Office And Local Agent/Secretary
Oregon law requires for Oregon LLCs to have a registered agent in the state of incorporation and throughout the life of the company. The registered agent’s name and address are included on the formation documents. This information is a matter of public record. The registered agent is responsible for receiving important legal and tax documents including: notice of litigation (service of process), franchise tax forms and annual report forms.
There is no statutory requirement to have a company Secretary for Oregon LLC.
There are no statutory requirements concerning meetings of members or record keeping. It is recommended that with two or more members, a Members’ Agreement be entered into. If held by members, meetings can take place anywhere in the world and in any way convenient to the members.
Usually 1 business week. We require up to 10 working days for legalization of the documents and delivery by courier.
Oregon Limited Liability Company (LLC) does not pay U.S. state or federal income tax if its owners are not U.S. citizens or green card holders, its offices are located outside of the U.S., and the LLC does no business in the U.S. The IRS tax treatment of an Oregon LLC is on the flow-through tax basis. That is the LLC is not taxed on its profits. The income of the LLC is distributed to its members who are taxed on a personal income basis.
Non-resident aliens are not taxable by the U.S. on income derived out of the U.S. If an LLC derives its income outside of the U.S., the non-resident aliens do not file tax returns.
Audit And Financial Returns
Oregon LLC is not required to file state or federal tax returns. Whilst there is no requirement to file audited accounts or annual returns with the authorities, a company is required to keep financial records, which should reflect the financial position of a company. To maintain legal existence, Oregon LLCs must file an annual report every year with the Oregon Secretary of State. LLC annual reports are due for the year in which they are filed.