How to Move an LLC to Oregon

There are many reasons why a business owner may want to move an LLC to Oregon. This article discusses the use of conversion, known in some states as LLC domestication, to transfer an LLC to Oregon.

What is Oregon LLC Conversion?

Oregon LLC conversion is a legal transaction that can change an out-of-state LLC into an Oregon LLC without disrupting the company’s existence or operations.¹ An out-of-state LLC enters an Oregon conversion governed by its current state’s law. After completing the conversion, it is an Oregon LLC governed by Oregon’s LLC laws.² The LLC remains fundamentally the same business entity—with the same rights, assets, and liabilities—throughout the conversion process.³

In some states, a conversion is a legal procedure designed specifically to change a business entity to a different entity form. For example, an LLC might complete a conversion to become a corporation. Those states often have a different procedure (called domestication) that changes an LLC’s legal home state—its state of organization or domicile.

Oregon does not use the term domestication for changes to an LLC’s domicile. Instead, Oregon has one LLC conversion procedure that can change an LLC’s domicile state or its entity type. Oregon’s statutory conversion procedure can:

• Convert an out-of-state LLC into an Oregon LLC;
• Convert an Oregon LLC into an out-of-state LLC;
• Convert an Oregon LLC into another Oregon entity type (e.g., a corporation or partnership); or
• Convert another type of Oregon business entity into an Oregon LLC.⁴

This article assesses Oregon LLC conversions that change out-of-state (or foreign) LLCs into Oregon LLCs.

Why Transfer an LLC to Oregon?

A business owner who moves to Oregon may benefit from an Oregon LLC conversion. But an owner need not live in Oregon for Oregon law to govern an LLC. An owner of an LLC currently organized in another state may want to convert the company to an Oregon LLC for any of the following reasons (among others):

• 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.

What are the Benefits of Oregon LLC Conversion?

An out-of-state business owner can use the Oregon LLC conversion process to move an existing LLC to Oregon without interrupting the business’s ordinary operations. Although there are other legal strategies for officially relocating an existing business, LLC conversion is almost always the least expensive and least burdensome approach. Some of the advantages the conversion process enjoys over alternative methods include:

• Consistent identity and Employer Identification Number. A converting LLC is the same company after the conversion.⁵ It keeps the same Employer Identification Number (EIN) and administrative history. The Oregon LLC can continue using any assumed business names that the business used in Oregon before conversion.⁶
• Day-to-day business as normal. An Oregon LLC conversion is a behind-the-scenes legal transaction that need not alter day-to-day operations. Business offices stay open as normal. Conversion does not affect employment relationships, so employees continue working for the same company—with no break in the employment relationship.
• Same bank accounts and assets. A converted LLC owns all the same property and can keep using the same bank accounts. There is no need to close and re-open accounts or transfer assets between entities.⁷
• Existing contracts are still valid. Any business contracts the LLC entered into before the conversion are still in effect and enforceable after the conversion. The converted LLC is still a party to the agreements and has the same rights and obligations.⁸ Existing business relationships are unaffected by the conversion, and there is no need to renegotiate or re-execute contracts.
• No dissolution necessary. Alternate methods of moving a business may involve dissolution in the current state. The dissolution process is often expensive and time-consuming. Oregon LLC conversion avoids dissolution because the LLC is always the same company—just in a new state.⁹
• Foreign LLC registration is not essential. An LLC that completes an Oregon LLC conversion becomes an Oregon LLC and ceases to be organized under the original state’s law. If the company will no longer do business in the original state, there is no need to register there as a foreign LLC. The LLC can register in the original state as a foreign LLC, but only if it wants to keep doing business there.¹⁰

What LLCs can Convert to Oregon LLCs?

An LLC currently organized in another state can use the Oregon LLC conversion process to become an Oregon LLC only if the current state also authorizes LLC conversions.¹¹ The current state may use a different name—such as LLC domestication—for the procedure. If the current state has no statutory procedure for changing an LLC’s domicile state, the LLC cannot convert to Oregon.

An out-of-state LLC also needs to confirm that Oregon law allows LLCs to conduct the type of business that the company does. In general, an Oregon LLC can do any lawful business that a corporation, partnership, or professional corporation can do.¹² However, there are two broad exceptions:

1. 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.
2. 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.¹³

Oregon PLLC Conversion

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.¹⁴ 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.¹⁵ 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.¹⁶ 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.¹⁷

How Much Does Oregon LLC Conversion Cost?

An out-of-state LLC using Oregon’s LLC conversion process to become an Oregon LLC should anticipate labor costs to the service provider, filing fees to state agencies, and (if needed) statutory agent fees.

Labor Costs

Converting LLCs often hire service providers to handle some or all aspects of the conversion process. A service provider’s tasks typically include gathering and reviewing information; preparing conversion documents; communicating with business owners and state agencies; circulating documents for review and signature; and submitting conversion documents to state agencies for filing.

Service-provider fees for managing an LLC conversion vary between providers and according to the scope of the provider’s involvement in the project. Service providers may charge a flat fee or bill hourly.

Filing Fees

A converting LLC needs to pay filing fees when submitting conversion documents. The fees are paid to the Oregon Secretary of State’s office and to the current state’s equivalent office. Oregon charges a $100.00 filing fee when an out-of-state LLC files an articles of conversion to move to Oregon.¹⁸

The filing fee that the current state charges for LLCs converting to another state varies between states. Oregon’s 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.

Registered Agent Fees

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.¹⁹

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.

How Long Does Oregon LLC Conversion Take?

The Oregon LLC conversion process involves multiple phases completed by different parties. Each party’s turnaround time for each phase determines the total time needed to complete the conversion. Factors that decide the process’s end-to-end timeframe include:

• The business owners’ or managers’ turnaround time to organize and transmit the necessary information to the service provider or other document preparer;
• The document preparer’s turnaround time to receive and review information and prepare the conversion documents;
• The owners’ or managers’ turnaround time to review the draft conversion documents and sign or request revisions;
• The service provider’s turnaround time to submit the final, signed conversion documents to the Oregon Secretary of State’s Corporation Division and the current state’s equivalent agency; and
• The state agencies’ turnaround time to process and file the conversion 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 6-8 weeks.

What Laws Govern Oregon LLC Conversion?

An Oregon LLC conversion must be conducted so as to satisfy both Oregon law and the original state’s law. Most states’ LLC conversion processes involve similar steps, but specific requirements often vary. An LLC converting to Oregon may find that its current state has requirements that Oregon does not have (or vice versa). The person responsible for managing the conversion must be familiar with both states’ legal requirements.

Oregon’s conversion rules and requirements are detailed throughout this article. The current state’s law specifically controls the filing requirements for documents filed in that state and the approval standard needed to officially adopt the LLC’s plan of conversion.²⁰

When both states address a part of the conversion process, it is important that the LLC comply with both states’ rules. For example, Oregon’s conversion law lists items that must be included within an LLC’s plan of conversion.²¹ The current state’s conversion law will likely contain a similar list. A converting LLC’s plan of conversion must include every item included within Oregon’s list or within the current state’s list. An item required by the current state must be in the plan of conversion even if Oregon does not expressly require it.

What is the Oregon LLC Conversion Process?

The Oregon LLC conversion process consists of two components: document preparation and administrative tasks.

Document Preparation

Conversion of an out-of-state LLC into an Oregon LLC requires careful drafting of several conversion documents. The conversion documents must meet all of both states’ legal requirements.

• Plan of Conversion. A Plan of Conversion that is designed to comply with the requirements of both Oregon law and the law of the state that the LLC is moving from.
• 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 Corporation Division.
• 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, certificate of conversion, or a similar term.²²
• 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.

Administrative Tasks

The out-of-state LLC and its owners or other representatives must complete several administrative tasks to finish its conversion into an Oregon LLC.

• Conduct preliminary name search. Check the official records of 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 to complete the conversion.)
• Obtain signatures on the Articles of Conversion. The Articles of Conversion must be signed by the required parties. The Oregon Secretary of State’s Corporation Division allows the Articles of Conversion to be e-signed.
• File the Articles of Conversion. File the Articles of Conversion with the Oregon Secretary of State’s Corporation Division. The Secretary of State requires the Articles of Conversion to be filed by mail or in person (no e-filing). The Articles of Conversion should be accompanied by the Oregon Secretary of State’s Information Change Form if the out-of-state LLC is registered with the Oregon Secretary of State.
• File conversion documents with prior state. File the conversion documents with the Secretary of State or equivalent agency for the state that the LLC is moving from.

What Is the Legal Effect of Oregon LLC Conversion?

An Oregon LLC 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.²³ When the conversion takes effect, the Articles of Conversion governs the company and serves as the LLC’s Articles of Organization in Oregon.²⁴

An LLC’s conversion to Oregon has the following legal effects when completed:

• 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.²⁵ It keeps the same legal identity and still uses the same EIN 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.²⁶
• 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.²⁷
• 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.²⁸ Conversion does not affect a member’s personal liability (or lack of liability) for the business’s debts.²⁹
• 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.³⁰
• 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.³¹
• 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.³² 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.

1. Or. Rev. Stat. § 63.470(1).
2. Or. Rev. Stat. §§ 63.001, et. seq.
3. Or. Rev. Stat. § 63.479(a).
4. Or. Rev. Stat. §§ 63.470(1)-(2).
5. Or. Rev. Stat. § 63.479(a).
6. Or. Rev. Stat. § 63.479(h).
7. Or. Rev. Stat. § 63.479(b).
8. Or. Rev. Stat. § 63.479(c).
9. Or. Rev. Stat. § 63.479(a).
10. See, e.g., Or. Rev. Stat. § 63.470(2)(d) (Oregon LLC converting into another state includes an application to transact business as a foreign LLC unless the LLC will no longer do business in Oregon.
11. Or. Rev. Stat. § 63.470(1)
12. Or. Rev. Stat. § 63.074(1).
13. Or. Rev. Stat. § 63.074(3).
14. Or. Rev. Stat. § 58.015(7).
15. Or. Rev. Stat. § 63.074(2).
16. Or. Rev. Stat. § 63.047(1)(g).
17. See Or. Rev. Stat. § 63.001(2) (“articles of organization” is the document that forms an Oregon LLC and includes articles of conversion and articles of merger).
18. O.R.S. § 56.140(1); see also Or. Rev. Stat. § 63.001(2) (“articles of organization” includes articles of conversion).
19. Or. Rev. Stat. § 63.111.
20. Or. Rev. Stat. § 63.473(1).
21. Or. Rev. Stat. § 63.470(3).
22. Fourteen states use the term articles of domestication to refer to the document that must be filed with the state to approve the domestication: Iowa, Massachusetts, Minnesota, Nebraska, New Hampshire, New Jersey, North Dakota, South Dakota, Utah, Vermont, Virginia, Wisconsin, Wyoming, and Indiana. The corresponding document may be called a statement of domestication (Alaska, Arizona, Connecticut, Idaho, Illinois, Mississippi, and Pennsylvania); articles of conversion (Florida, Nevada, North Carolina, Oregon, and Washington) or certificate of conversion (California, Delaware, Georgia, Michigan, Ohio, and Texas). It may also be called a statement of conversion (Colorado, Maine), certificate of domestication (Kansas), request for conversion (Louisiana), or statement/plan of domestication (District of Columbia).
23. Or. Rev. Stat. §§ 63.051; 63.476(2).
24. See Or. Rev. Stat. § 63.001(2).
25. Or. Rev. Stat. § 63.479(a).
26. Or. Rev. Stat. § 63.479(h).
27. Or. Rev. Stat. § 63.479(b).
28. Or. Rev. Stat. § 63.479(c).
29. Or. Rev. Stat. § 63.479(f).
30. Or. Rev. Stat. § 63.479(c).
31. Or. Rev. Stat. § 63.479(d).
32. Or. Rev. Stat. § 63.479(e).