How to Move an LLC to Oregon

An out-of-state LLC can change its state of organization to Oregon through statutory conversion. Oregon conversion is a legal transaction that changes an LLC’s state of organization, the state whose law primarily governs the company. An out-of-state LLC, also called a foreign LLC, that converts to Oregon becomes an Oregon LLC governed by the Oregon Limited Liability Company Act (Or. Rev. Stat. §§ 63.001 through 63.992).

The LLC is otherwise the same business entity before and after the conversion process. Whether the conversion can proceed also depends on the laws of the state the LLC is leaving. To find out whether your LLC qualifies and what the process involves, request a free analysis of your LLC move.

Some states use the term domestication for the legal procedure that changes an LLC’s state of organization, also called its domicile. Oregon uses the term conversion for the same transaction. In many states, the same statutory process can accomplish either goal: change an LLC’s domicile or change its entity type.

A business might complete a conversion to change from one entity form to another. For example, an LLC might convert to a corporation. This article deals with conversions that change an out-of-state LLC into an Oregon LLC.

Why Business Owners Move LLCs to Oregon

An Oregon LLC conversion may make sense if a business owner moves to Oregon or if the owners prefer to have Oregon law govern the company. An owner might transfer an LLC to Oregon for any of the following reasons:

• Owner convenience. Business owners who move to Oregon can use the conversion process to bring their businesses with them. A completed Oregon LLC conversion results in the business being primarily governed by the owner’s home state. Limiting the number of state-law systems that an owner needs to be concerned with is more convenient and can avoid confusion and potential legal ambiguity.
• Improved selection of professionals. Individual states have their own business-law and tax systems. An LLC looking to hire a professional, like an accountant or lawyer, needs someone who is familiar with the right state’s system. Oregon residents will have more local professionals to choose from if they are looking for someone who knows Oregon law. An Oregon LLC conversion can therefore make hiring an accountant or attorney easier for an Oregon-based business owner. Working with local professionals can also allow for in-person meetings, more lasting professional relationships, and enhanced networking opportunities for entrepreneurs.
• Lower taxes. Oregon generally ranks in the middle in state tax rankings, with especially low scores for its individual and corporate income tax rates. However, an LLC that converts to Oregon could save on taxes if the tax areas in which Oregon compares favorably to other states are a good fit for the business. For example, Oregon is one of the best states for sales tax, so a retail-oriented business might benefit from an Oregon conversion.
• Fewer states to pay taxes. A conversion could also result in tax savings if it ends the connection, or taxable nexus, with the LLC’s original state. In that case, the LLC may reduce its tax burden by limiting the number of states where it has to pay taxes. That could translate to big tax savings for an LLC currently organized in a high-tax state like New York or California.
• Legal benefits. An owner might want to convert an out-of-state LLC to Oregon if Oregon law offers the company advantages over the original state. An Oregon conversion could make sense if Oregon’s LLC law complements the owners’ plan for management or profit/loss distribution. Oregon also has multiple programs designed to encourage relocation of businesses to Oregon and investment in existing Oregon businesses.
• Reduced reporting. An Oregon LLC conversion sometimes reduces the cost and time a company must spend on reporting. An LLC that is formed in one state but does most of its business in a different state typically must file annual reports in both states. An out-of-state LLC that mostly operates in Oregon may avoid annual reporting in the original state if it converts into an Oregon LLC.

Oregon LLC Conversion Requirements

Oregon LLC conversion under Or. Rev. Stat. § 63.470 is not available for every out-of-state LLC. An LLC converting to Oregon must comply with both Oregon law and the current state’s law. Oregon law controls the process and documents filed in Oregon and determines the conversion’s legal effects.

The current state’s law governs whether the LLC can convert to Oregon (the state must authorize conversion), the content of the written plan of conversion if required, the standard under which the LLC’s members or managers must approve the plan of conversion, and the effective date for the conversion.

Eligibility for Oregon LLC Conversion

An LLC considering conversion to Oregon must confirm that it is eligible for the process. The principal requirement is that the current state must authorize LLC conversions. Not all states do. The current state may call the process conversion, domestication, or another name. The important part is that the state must have a statutory procedure that lets an LLC organized in that state change its domicile to a new state.

Business owners must also review the LLC’s articles of organization and operating agreement to ensure there are no provisions that prevent conversion to a new state. If any restrictions are present, the LLC may need to formally amend the documents to allow the procedure.

An out-of-state LLC must also confirm that Oregon lets LLCs engage in the company’s field of business. In general, an Oregon LLC can do any lawful business that a corporation, partnership, or professional corporation can do. However, there are two broad exceptions.

First, an Oregon law that specifically governs a business area may prohibit LLCs, in which case an out-of-state LLC involved in that field should not convert into an Oregon LLC. Second, if another Oregon law requires a type of business to be organized under a statute other than the Oregon LLC Act, then a business subject to the other statute cannot convert into an Oregon LLC.

Some states have laws that prevent LLCs from offering professional services, which are services that can be offered to the public only by a licensed professional. An Oregon LLC can provide professional services as long as the company complies with all relevant ethics rules and the rules and regulations issued by the professional board or equivalent body that regulates the profession.

An out-of-state professional limited liability company, or PLLC, should verify that it has the necessary licenses and complies with all regulations governing the field before converting to Oregon. An Oregon PLLC must identify the types of professional services it offers within its articles of organization. A converted LLC’s articles of conversion serves as its articles of organization, so a converting PLLC’s articles of conversion must identify the professional service(s) the company will offer in Oregon.

Required Documents for Oregon LLC Conversion

The Oregon LLC conversion process involves preparing and adopting several conversion documents that must satisfy both states’ requirements. The conversion documents memorialize the terms of the conversion and control the company when the conversion takes effect.

• Plan of Conversion. A Plan of Conversion designed to comply with the requirements of both Oregon law and the law of the state that the LLC is moving from. The plan must set forth the name and type of the business entity prior to conversion, the name and type of the business entity after conversion, a summary of the material terms and conditions of the conversion, the manner and basis of converting the ownership interests of each owner into ownership interests or obligations of the converted business entity or any other business entity or into cash or other property in whole or in part, and any additional information required by statutes that govern the type of entity into which the LLC is converting.
• Oregon Articles of Conversion. The Oregon Articles of Conversion with all information and any related documents needed for filing with the Oregon Secretary of State’s office.
• Conversion Document for Filing in Prior State. Depending on state law, this document may be called articles of domestication, statement of domestication, articles of conversion, certificate of conversion, statement of conversion, or a similar term.
• Oregon Operating Agreement. A state-specific Operating Agreement to properly structure the LLC as an Oregon LLC, provide rules for profit distributions and decision-making, clarify the federal income tax classification, and help provide maximum liability protection.
• Resolution Authorizing Conversion. A resolution approving the transaction and adopting the Oregon organizational documents as the LLC’s governing documents.

The Articles of Conversion accept electronic signatures under Oregon law. Filing through the Oregon Secretary of State’s office allows e-signature for electronically signed documents. The Secretary of State requires the Articles of Conversion to be filed by mail or in person; e-filing is not available.

The LLC also completes several administrative tasks to implement the conversion.

• conducting a preliminary name search with the Oregon Secretary of State’s Corporation Division to determine whether the LLC’s name is available in Oregon (if the name is unavailable
• a slight name change may be required); obtaining signatures on the Articles of Conversion from the required parties; filing the Articles of Conversion with the Oregon Secretary of State’s Corporation Division;
• filing conversion documents with the Secretary of State or equivalent agency for the state that the LLC is moving from

Cost of Moving an LLC to Oregon

The cost of moving an LLC to Oregon depends on the scope of work involved. The documents and filings described above require professional preparation to comply with both states’ requirements, and coordinating submissions with two separate state agencies adds further complexity. To find out what your specific move will cost, request a free analysis of your LLC move.

In addition to professional service costs, the Oregon Secretary of State charges a $100.00 filing fee when an out-of-state LLC files an Articles of Conversion to move to Oregon. The filing fee that the current state charges for LLCs converting to another state varies between states. For comparison, Oregon’s filing fee for an Oregon LLC moving to a new state is $275.00. Most states charge a lower fee for LLCs converting to a new state.

Processing Time for Oregon LLC Conversion Filings

An Oregon LLC conversion proceeds in several steps. The length of the process depends on how long each step takes.

Each step depends on the responsible person’s turnaround time: the business owners’ time to organize the necessary information, the service provider’s time to review the information and prepare the conversion documents, the owners’ time to approve and sign the draft documents or request revisions, the service provider’s time to file the final conversion documents with state agencies, and the state agencies’ time to accept and process the filed documents.

The Oregon Secretary of State’s Corporation Division reports that in-person and online filings are usually processed on the same day, but documents submitted by mail may take up to 6 to 8 weeks. The conversion becomes legally effective when the conversion documents are officially received and filed by the Secretary of State’s office or on a delayed effective date, up to 90 days after filing, listed in the articles of conversion.

When the conversion takes effect, the Articles of Conversion governs the company and serves as the LLC’s Articles of Organization in Oregon. For a detailed breakdown of each phase in the conversion timeline, see the guide to the LLC domestication process.

Legal Effect of Oregon LLC Conversion

Oregon LLC conversion moves an out-of-state LLC to Oregon. The company otherwise continues its existence as the same entity with the same date of formation. The company expends substantially less time and money on administrative matters compared to other methods for changing a business’s state of domicile. Oregon law declares that the legal effects of a conversion to Oregon are as follows:

• Uninterrupted existence. The LLC continues to exist as the same company before, during, and after the conversion. The conversion does not create a pause or a gap in the LLC’s existence. It keeps the same legal identity and still uses the same Employer Identification Number and any other tax identification numbers. If the out-of-state LLC did business in Oregon under an assumed business name prior to conversion, the Oregon LLC can continue using the assumed business name after the conversion.
• Company property. The Oregon LLC holds title to all the out-of-state LLC’s real estate and still owns all of its other assets. There is no need to sign deeds or other transfer instruments, and the conversion in no way limits the LLC’s property rights.
• Company obligations. The Oregon LLC has all of the out-of-state LLC’s legal, contractual, and regulatory obligations from before the conversion. The LLC’s debts, taxes, and liabilities are unchanged except that they are now owed by the Oregon LLC. Conversion does not affect a member’s personal liability, or lack of liability, for the business’s debts.
• Contracts. The LLC is still a party to its business agreements, and legal contracts remain valid and enforceable. The company has the same contractual rights and duties after the conversion.
• Legal proceedings. Any civil cases, administrative proceedings, and comparable legal matters that involve the LLC move forward without regard to the conversion. All pending matters proceed as scheduled except that the Oregon LLC’s name can be substituted for the LLC’s prior name, if needed.
• Ownership interests. All membership interests or equity that members held in the out-of-state LLC are converted under the agreed terms described in the plan of conversion. That typically means that ownership interests in the out-of-state LLC become ownership interests in the Oregon LLC in the same percentages. The members may instead choose to convert interests into cash, other property, debt owed by the Oregon LLC, or ownership interests in a different entity, or any combination, as long as the written plan of conversion clearly describes the agreed conversion terms.
• No dissolution necessary. Conversion does not formally terminate the LLC in the original state. Dissolution, liquidation, and winding up affairs are unnecessary. Conversion does not trigger contractual rights that take effect in the event of dissolution, liquidation, or winding up. Filings in the original state are limited to the equivalent of the statement of conversion. Registration as a foreign LLC in the original state is also not essential; the company can register as a foreign LLC in the original state if it will still do business there, but it does not have to.

Moving an LLC Out of Oregon

Oregon permits outbound LLC conversion under Or. Rev. Stat. § 63.470(2). An Oregon LLC can convert to another state’s jurisdiction, provided that the destination state also authorizes the procedure.

Oregon Outbound Conversion Requirements

An Oregon LLC that converts to another state must file an Articles of Conversion with the Oregon Secretary of State’s Corporation Division. The outbound filing must include a plan of conversion approved by the LLC’s members or managers. Oregon does not require a separate certificate of surrender. The Articles of Conversion completes the Oregon side of the transaction. The destination state will require its own formation and conversion documents.

Filing Fees for Moving an LLC from Oregon

The Oregon Secretary of State charges a filing fee of $275.00 for an outbound Articles of Conversion. The destination state will charge separate filing fees for its formation and conversion documents.

Oregon LLC Laws That Apply After the Move

The Oregon Limited Liability Company Act (Or. Rev. Stat. §§ 63.001 through 63.992) imposes ongoing requirements on all domestic LLCs, including those formed through conversion from another state. An LLC that converts to Oregon becomes subject to these obligations immediately upon effectiveness of the conversion.

Oregon Annual Report and Compliance Requirements

Oregon requires domestic LLCs to file an Annual Report with the Oregon Secretary of State every year. The filing fee is $100.00 per year. This annual reporting requirement is one item to consider when evaluating the total cost of maintaining an Oregon LLC after conversion.

Oregon LLC Operating Agreement Requirements

Oregon refers to an LLC’s internal governance document as an “Operating Agreement” under Or. Rev. Stat. § 63.001(25). The Operating Agreement governs the LLC’s internal affairs, including the rights and obligations of members and managers, profit distributions, and management structure. The Operating Agreement is not filed with the state; it is maintained by the LLC as a private document.

Oregon Registered Agent Requirements

Every Oregon LLC must have a registered agent listed with the Oregon Secretary of State. The registered agent is a person with legal authority to accept service of process and other important communications for the company. An Oregon LLC’s registered agent must be an Oregon resident individual, such as a member or manager of the company, or an entity with an Oregon address and authority to do business in Oregon.

LLCs often hire commercial registered agents to avoid publishing a member or manager’s name and address. A commercial registered agent charges an annual fee in return for acting as a business’s registered agent. The annual fee for a commercial registered agent is relatively low, typically around $100.00, so hiring a commercial registered agent can also be a good way for a company to keep important communications organized and consistent.

Alternatives to Oregon LLC Conversion

When conversion is not available because the other state’s law does not authorize it, a merger-based reorganization achieves the same result. The reorganization involves forming a new Oregon LLC and merging the out-of-state LLC into it, with the Oregon LLC as the surviving entity.

The surviving LLC succeeds to all property, contracts, and obligations of the original LLC by operation of law. The Oregon Secretary of State charges a filing fee of $100.00 for the merger filing, in addition to the $100.00 formation fee for the new Oregon LLC. For a detailed explanation of how the reorganization process works, see our guide to LLC reorganization.

For a state-by-state comparison of LLC conversion and domestication laws across all states, see our guide to LLC domestication and conversion by state.