How to Qualify a Foreign LLC in Oregon

Your business is growing, and you’re planning an expansion to other states. It’s a good problem to have!

But it’s not quite as simple as choosing another location. Because each state has different rules and requirements for business operations, you may need a “foreign qualification” in each state where you plan to do business.

It’s a common misconception that foreign qualification is only for businesses operating outside the U.S. But in this case, “foreign” refers to any business operating in a state that isn’t the state where the LLC was originally formed.

For example, if your LLC is registered in Washington and you are looking to open a second location in Oregon, you may need to complete a foreign qualification in Oregon before you can expand there.

Important Note: If you’d like to save time and have the foreign qualification paperwork taken care of for you, many of the best LLC services can handle this task for you.

What happens if I fail to foreign qualify before doing business in Oregon?

Foreign qualifying is essentially asking permission to do business in the state of Oregon. And the notion that “it’s easier to ask forgiveness than permission” doesn’t apply here. Failing to foreign qualify before starting a business in Oregon yields consequences that are far costlier than registering in the first place. If you fail to foreign qualify, your business:

• Will no longer be allowed to maintain a lawsuit or proceeding in Oregon courts
• Can have any of its ongoing legal proceedings stayed by a court
• Will owe the state all of the fees and LLC taxes it would have paid for the time it was doing in-state business had it been properly registered

Those penalties aren’t worth the risk. Not only will your LLC lose its legal footing in the state, but it will also need to pay all the accumulated fees at once, and they can add up quickly.

But if you transact business without authorization in Oregon, it won’t completely disengage your LLC from its in-state activities. Your current contracts will still be considered valid, and you will still be able to defend lawsuits in state courts.

Want to dig into the legal context for these penalties? Check out the Oregon Revised Statutes Section 63.704.

What is considered “doing business” in Oregon?

We’ve established why you shouldn’t do business without a foreign qualification. But what exactly does it mean to “do business” in Oregon? Many states are vague about this definition, but the Oregon Secretary of State’s website provides a few specifics. They say you are considered to be “doing business” in Oregon and required to foreign qualify if:

• You have a stock of goods stored in the state
• Your LLC has an office or another place of business in the state (like stores or warehouses)
• Employees or other representatives are providing goods/services to customers in the state for your LLC
• Your LLC has any other economic presence through which it uses the Oregon economy to produce income

Generally, according to the site, “if you expect to profit from your activities in Oregon, you are probably doing business in Oregon.” In addition, it’s important to always stay on top of your LLC’s taxation requirements to avoid any unwelcome surprises.

If you’re unsure whether or not you need to file for a foreign qualification in Oregon, we suggest seeking legal counsel.

Could I be exempt from foreign qualifying in Oregon?

The foreign qualification, however, isn’t a hard and fast rule for all LLCs performing any kind of action in Oregon. Certain actions do not qualify as “doing business” and therefore don’t require a foreign qualification. Some examples are:

• Defending, settling, or maintaining any proceeding in an Oregon court
• Facilitating activities solely related to internal affairs, like meetings of LLC members and/or managers
• Maintaining bank accounts
• Holding in-state offices/agencies for the exchange or registration of the LLC’s own securities
• Selling products or services through independent contractors
• Creating or acquiring indebtedness
• Securing and collecting debts
• Owning real or personal property in Oregon
• One isolated transaction, completed within 30 days, not in line with a series of similar transactions
• Transacting business in interstate commerce

See all of your Oregon business activities listed here? You’re most likely exempt from foreign qualifying. However, it’s still a good idea to check the details in the Revised Statutes Section 63.701 and contact an attorney if you have any questions.

How to Foreign Qualify Your LLC in Oregon

Foreign qualification in Oregon is simple if you know where to find and send your forms. If you or your legal counsel has decided to foreign qualify your LLC in Oregon, the Application for Authority is your go-to form, and you can submit it online, by mail, or in person. Find resources and directions for all three options here.

Want to get it done as quickly as possible? File online. On the Foreign LLC page, click “Register online” in the Application for Authority section. This will take you to the online filing portal, where you can create an account to continue. Then, just follow the on-screen instructions, and when you finish, you’ll be able to pay the $275 fee with a credit or debit card.

But if you’re someone who wants to leave a paper trail, download the application here. Complete it and include a $275 check, made payable to “Corporation Division.” The Secretary of State provides detailed instructions if you need assistance. Finished? Mail it to:

Secretary of State – Corporation Division

255 Capitol St. NE, Suite 151

Salem, OR 97310-1327

Regardless of your filing method, you’ll need to provide verification from the state in which your LLC was formed. This can take the form of a web-verifiable registry number or a Certificate of Good Standing (current within 60 days).

Filing for foreign qualification is a big step, so if you’re eager to see when your LLC has been approved, you can check the Secretary of State’s processing times, updated regularly on the Business homepage. At the time of this writing, online submissions were processed the same day, while mailed or faxed documents were taking about five weeks.

After your form is in and your fee is paid, sit back, take a deep breath, and pat yourself on the back. Your LLC is on its way to foreign qualification, and you’re embarking on another chapter in the life of your business.

Oregon Secretary of State Contact Information

Name Requirements to Remember

Don’t forget that, like other states, Oregon has its own business name requirements. Make sure to follow them, or you might hit a snag in your foreign qualification process. The state requires that your LLC name:

• Contains an identifier like “limited liability company,” “L.L.C.,” or LLC”
• Doesn’t use the terms “cooperative,” “corporation,” “corp.,” “incorporated,” “Inc.,” “limited partnership,” “L.P.,” “LP,” “Ltd.,” “limited liability partnership,” “L.L.P.,” or “LLP”
• Is distinguishable and available in the Secretary of State’s business records. Perform an Oregon LLC name search to make sure the name you want is available.

You can also reserve your Oregon business name if you’re not quite ready to foreign qualify your LLC.