Oregon LLC Operating Agreement
An Oregon LLC operating agreement is a legally binding document that outlines the basic structure, management, decision-making process, and daily operating procedures for your Oregon LLC. You may also include information such as membership interest and (should the time come) how the LLC will be dissolved.
Unlike the Articles of Organization, your LLC’s operating agreement is an internal document, meaning it’s not filed with the state. However, a well-thought-out operating agreement will be vital to your company’s success and daily functions.
Not sure how to get started? Hire us to form your Oregon LLC! You’ll get a year of our $35 registered agent service and a FREE attorney-drafted operating agreement you can customize to fit your needs.
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FREE Oregon LLC Operating Agreement
Are you forming a single-member Oregon LLC? Use our FREE online tool to create your operating agreement. If you need more time or get stuck, you can always save your progress and come back when you’re ready—no strings attached. Plus, you can always hire us to form your Oregon LLC for you.
We also provide operating agreements for multi-member LLCs and manager-managed LLCs. Sign up for our LLC formation service, and we’ll give you an operating agreement template for your type of LLC.
Does Oregon require LLCs to have an operating agreement?
No. Having an operating agreement for your Oregon LLC is not legally required. However, creating an operating agreement allows you to open a business bank account, protect your limited liability, and establish clarity for potential misunderstandings between members or managers. Plus, you can create a set of business rules tailored to your business and its needs.
What happens if I don’t have an operating agreement?
Without an operating agreement, the state’s default laws will govern your LLC. Unfortunately, Oregon’s LLC laws may not be ideal for your business. For example, per OR Rev Stat § 63.130, unless otherwise stated in an operating agreement, each member of your LLC will have equal management rights. In addition, significant actions such as dissolving the business or merging with another entity will require approval from all members, which may not be ideal if some members plan on taking on more of the company’s day-to-day responsibilities.
Writing a solid operating agreement allows you to establish rules/procedures (within the boundaries of state law) for your Oregon LLC, ensuring your business runs as you see fit.
What should I include in my Oregon LLC operating agreement?
The information you include in your LLC’s operating agreement is entirely up to you. But remember that the rules and procedures you create need to fit within the boundaries of state law. Most business owners will (at minimum) include the following information:
- Company information: Include basic information such as your business purpose, principal address, and registered agent’s name and address.
- Member/management information: List the names of each member/manager and their ownership percentage.
- Management structure: Decide if your LLC will be member-managed or manager-managed.
- Initial contributions: List each person’s initial contribution and (if applicable) the consequences for not meeting future contribution requirements.
- Profits, losses, and distributions: Outline how and when members will be paid. All members typically share profits and losses based on their ownership percentage. Once the bills are paid, the remaining money can be distributed to members whenever you choose.
- Ownership transfer: Outline how and if members can transfer ownership to another individual.
- Compensation: This section should cover how members will be paid for out-of-pocket expenses and services rendered. For example, if one member needs to travel for business purposes, the company should vote on how that individual will be reimbursed.
- Bookkeeping: Each member will likely be responsible for maintaining their own financial records. At the end of each fiscal year, members should prepare an end-of-year statement that will be submitted to whoever handles the LLC’s financials.
- Voting rights: Outline the voting process. For example, you might divide members into voting and non-voting groups–this will be helpful if you have passive investors.
- Dissolution: Although it might seem strange to consider closing your business when you’re just getting started, it’s important to have a plan in case of an emergency or natural disaster. This section should outline how the LLC’s debts will be paid before assets, capital, or other money is paid out to members.
As you can see, building a solid operating agreement for your LLC is incredibly valuable. Why not make it easier for yourself and hire us to form your Oregon LLC? You’ll get a year of our local registered agent service and a FREE attorney-drafted operating agreement you can customize to fit your needs.
Get a FREE operating agreement with our LLC formation service!
Oregon LLC operating agreement FAQs
Are Oregon LLC operating agreements public record?
Nope. Your Oregon LLC operating agreement is an internal document, so you won’t file it with the Oregon Secretary of State. Per 63.057, the operating agreement can be written or oral. However, LLC operating agreements are legally binding, so it’s best to have a written agreement.
Can I write my own operating agreement?
Yes. Although hiring an attorney can be helpful, you are not legally required to hire anyone to write your operating agreement. However, we encourage you to research Oregon state laws and ensure everything relevant to your business is included. You may also want to have a business lawyer review your operating agreement once it’s completed.
I own a single-member Oregon LLC. Do I need an operating agreement?
Yes. Although you may not anticipate having any internal disputes with yourself, a solid operating agreement can help you prove ownership of your company and (more importantly) protect your limited liability.
Does my LLC operating agreement need to be notarized?
The state does not require LLC operating agreements to be notarized. As long as each member has read and signed the document and has continuous access to it, you’re good to go. However, some banks or other lenders may ask for a notarized copy. If you ever need a notarized copy, you can ask if the bank or lender has a public notary on staff.
What happens if I lose my operating agreement?
If your LLC loses its operating agreement, you’ll likely need to write a new one that overrides the old one. You’ll also need to make sure all members sign and date the new agreement.
When you hire us to form your Oregon LLC, a copy of your operating agreement will be safely stored inside your online client account.