Dissolving a Business in Oregon 2024: A Step-by-Step Guide

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How to Dissolve a Business in Oregon

Closing an LLC in Oregon may be a tough decision, but our comprehensive guide is here to help and make the process smooth and worry-free. Understanding the dissolution process is crucial for avoiding future legal and financial liabilities, whether due to financial circumstances or new ventures. Let us be your trusted partner in this final phase of your LLC journey, ensuring seamless closure and protection against liability concerns.

Embark on this final step confidently, as our expert advice guides you through the requirements, procedures, and best practices of dissolving your business in Oregon. Navigate legal formalities, manage outstanding obligations, and file the necessary paperwork with ease, all with the support of LLCBase. Tackle this challenge with us and achieve a secure and successful closure in the ever-changing Oregon business landscape.

What is a Business Dissolution

Oregon LLC Dissolution refers to the process of legally ending the existence of a Limited Liability Company (LLC) registered in the state of Oregon. Dissolving an LLC involves several steps, such as following the LLC’s operating agreement, obtaining necessary approvals from members, settling outstanding debts and taxes, and filing the required dissolution documents with the Oregon Secretary of State.

The dissolution process ensures that the LLC is no longer legally recognized as a separate entity and cannot conduct business activities. Properly dissolving an LLC in The Beaver State is essential to avoid potential legal and financial liabilities for the members involved.

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Dissolve Your Business in Oregon: 4-Step Guide

Let’s walk you through a 4-step guide to help you dissolve your business in Oregon efficiently and effectively:

Step 1: Follow Your Oregon Operating Agreement

You should have drafted an operating agreement when you initially formed an LLC. This document outlines the procedures and rules for how the business will be managed and operated. The operating agreement should also include information on how to dissolve the LLC.

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Consult Your Operating Agreement

The LLC operating agreement is a crucial document governing your Oregon LLC’s management, operation, and dissolution. It is a legally binding contract between the LLC members, outlining their rights, responsibilities, and obligations.

When you dissolve your Oregon LLC, the first step is to consult your operating agreement. Carefully review the specific provisions related to dissolution and winding up the business. This section should outline the necessary steps, conditions, and requirements for the members to dissolve the LLC properly.

Determine the Required Approvals and Procedures

Upon reviewing the operating agreement, you must identify the required approvals and procedures for dissolution.  These may vary depending on the terms agreed upon by the LLC members.  Common approval methods include:

  • Unanimous Written Consent: In some cases, the operating agreement may require all members to provide written consent for dissolution.
  • Majority Vote: More commonly, the operating agreement will require a majority vote of the members to approve the dissolution. The agreement should specify the percentage needed for approval (e.g., a majority of 51% or a supermajority of 66%).
  • Specific Conditions: The operating agreement may outline specific conditions or events that trigger the dissolution process, such as the death or withdrawal of a member, bankruptcy, or reaching a predetermined end date.
Document the Decisions and Approvals

Once you have determined the proper procedure for dissolution, follow the steps outlined in the operating agreement. It is essential to document all decisions and approvals related to the dissolution of your Oregon LLC. This documentation may include the following:

  • Written consent signed by all members.
  • Meeting minutes reflecting the discussion and vote on dissolution.
  • Any other written records or correspondence related to the dissolution decision.

Maintaining accurate records of the decisions and approvals is crucial. They will be necessary when filing the dissolution documents with the Oregon Secretary of State. They may be required in case of a dispute or legal issue related to the LLC’s dissolution.

Step 2: Close All Tax Accounts

Before you can dissolve your Oregon LLC, you must ensure that all outstanding debts and taxes are settled.

Settle Outstanding Debts and Taxes

Before dissolving your Oregon LLC, settling all outstanding debts and taxes is essential to avoid potential legal and financial liabilities. You must address any balances due to the Oregon Department of Revenue, Oregon Employment Department, and other state or federal agencies that may apply to your business operations.

  • Oregon Secretary of State: Ensure you have paid any outstanding franchise taxes and fees, including the annual Oregon LLC tax and any additional taxes that apply to your business.
  • Employment Development Department: If your LLC has employees, ensure you have paid any required payroll taxes and filed all necessary employment tax returns with the Oregon Employment Department.
  • Other Agencies: Depending on your business activities, you may need to settle outstanding debts with other state or federal agencies, such as the Internal Revenue Service (IRS), for federal taxes.
File Final Tax Returns with the Oregon Department of Revenue

After settling all outstanding debts and taxes, you must file your final tax returns with the Oregon Department of Revenue. This process involves:

  • Filing a Final no form: Complete and submit the Limited Liability Company Return of Income (no form) for the final tax year of your LLC’s existence. Indicate on the form that it is your final return, and report all income, deductions, and credits associated with your LLC’s activities during the tax year.
  • Paying Remaining Balances: Along with filing your final no form, ensure that you pay any remaining balances due to the Oregon Department of Revenue, including any late fees or penalties that may apply.
  • Closing Tax Accounts: Inform the Oregon Department of Revenue that you are dissolving your LLC and request the closure of your tax accounts. This is important to avoid any confusion or future tax obligations related to your dissolved LLC.

By properly closing all tax accounts and filing your final tax returns, you can ensure a smooth dissolution process and avoid any potential legal and financial issues arising from unresolved tax obligations.

Step 3: File a Certificate of Dissolution

Once all necessary approvals have been obtained and all tax accounts have been closed, you can officially dissolve your Oregon LLC by filing a Certificate of Dissolution with the Oregon Secretary of State.

Complete the Certificate of Dissolution 

To officially dissolve your Oregon LLC, you must complete and file the Certificate of Dissolution with the Oregon Secretary of State. This form is available on the Secretary of State’s website and requires the following information:

  • LLC Name: Provide the exact name of your LLC as it appears on your Articles of Organization.
  • Secretary of State File Number: Include the LLC’s file number assigned by the Oregon Secretary of State.
  • Dissolution Date: Specify the effective date of dissolution, which can be the filing date or a future date not more than 90 days from the filing date.
  • Signatures: Include the signatures of all members who have approved the dissolution or their authorized representatives.
Review the Form for Accuracy

Before submitting the Certificate of Dissolution, please review it carefully to ensure all information is accurate and complete. Any errors or omissions may cause delays in processing the dissolution or even result in the rejection of the form.

Mail or Deliver the Form to the Oregon Secretary of State

After completing the Certificate of Dissolution, you can mail or hand-deliver it to the Oregon Secretary of State’s office. The address is:

  • Secretary of State, Corporation Division, 255 Capitol St. NE, Suite 151, Salem, OR 97310

Please note that a filing fee may be associated with submitting the Certificate of Dissolution. Check the Secretary of State’s website for the current fee schedule and acceptable payment methods.

Once the Certificate of Dissolution is filed and approved, your Oregon LLC will be officially dissolved, and you will receive a confirmation document from the Secretary of State. This document is proof of the LLC’s dissolution and should be kept with your business records.

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Step 4: Notify Interested Parties

Once your LLC has been officially dissolved, it is essential to notify all interested parties of the dissolution. This includes creditors, vendors, and customers. Informing these parties will help ensure that all outstanding debts and obligations are settled and any future liabilities are avoided.

Notify Creditors, Vendors, and Customers

After your LLC has been officially dissolved, informing all interested parties of the dissolution is important to ensure a smooth winding-up process. These parties may include:

  1. Creditors: Notify all creditors of the dissolution to settle any outstanding debts or obligations. This may involve paying off loans, lines of credit, or other liabilities.
  2. Vendors: Inform your vendors about the dissolution so they can cease providing goods or services and close any open accounts.
  3. Customers: Notify your customers about the dissolution to address any outstanding orders, contracts, or warranties. Depending on your business, this may involve refunding, fulfilling outstanding orders, or transferring contracts to another provider.
Settle any Legal Matters

If your LLC is involved in any ongoing legal disputes or matters, it is crucial to resolve these issues before the dissolution is complete. Consult with an attorney to address any pending litigation or legal obligations.

Distribute Remaining Assets to Members

After all outstanding debts, obligations, and legal matters have been addressed, the remaining assets of the LLC should be distributed among the members. The distribution process should follow the provisions outlined in the operating agreement, which may specify the following:

  • Distribution percentages: The operating agreement may outline the percentage of remaining assets each member is entitled to receive based on their ownership interest.
  • Order of distribution: The operating agreement may provide a specific order in which assets are to be distributed, such as cash first, followed by tangible property, and then intangible assets.
  • Valuation of assets: In some cases, the operating agreement may require assets to be appraised or valued before distribution to ensure fair and equitable dispersal among the members.

You can bring your Oregon LLC to an orderly and legally compliant conclusion by properly notifying all interested parties and wrapping up remaining business affairs. This will help protect you and the other members from any potential legal and financial liabilities arising after the dissolution.

Filing Fee to Dissolve Oregon LLC

It is impossible to predict the exact filing fee to dissolve or cancel your Oregon LLC in 2023, as fees are subject to change. However, as of  2021, no fee is associated with submitting the Certificate of Dissolution or the Certificate of Cancellation to the Oregon Secretary of State.

To file a Certificate of Dissolution, you must:

  1. Complete the form with the required information, including the LLC name, file number, and dissolution date.
  2. Obtain signatures from the approving members or their authorized representatives.
  3. Mail or hand-deliver the form to the Oregon Secretary of State’s office.

To file a Certificate of Cancellation, you must:

  1. Complete the form with the required information, such as the LLC name, file number, and the reason for cancellation.
  2. Obtain signatures from the approving members or their authorized representatives.
  3. Mail or hand-deliver the form to the Oregon Secretary of State’s office.

Please note that fees may change over time. Confirming the current fee schedule on the Oregon Secretary of State’s website or by contacting their office directly before filing any documents in 2023 is always recommended.

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FAQs

What is the process for dissolving a business in Oregon?
To dissolve a business in Oregon, you must file articles of dissolution with the Oregon Secretary of State.
Can you dissolve a business in Oregon without filing articles of dissolution?
No, in Oregon, filing articles of dissolution is required to dissolve a business.
Is there a fee to file articles of dissolution with the Oregon Secretary of State?
Yes, there is a fee to file articles of dissolution with the Oregon Secretary of State. The fee varies depending on the business entity type.
How do I determine the fee for filing articles of dissolution in Oregon?
You can find the fee for filing articles of dissolution in Oregon on the Oregon Secretary of State’s website.
Can I dissolve my business in Oregon if I have outstanding debts or taxes?
No, you must pay off all outstanding debts and taxes before you can dissolve your business in Oregon.
Can a business owner dissolve their business without permission from other owners?
No, if there are other owners of the business, they must all agree to dissolve the business before it can be dissolved.
What happens to the business’s assets when it is dissolved in Oregon?
The assets of a dissolved business in Oregon are distributed according to the business’s articles of incorporation or bylaws.
How long does it take to dissolve a business in Oregon?
The amount of time it takes to dissolve a business in Oregon depends on the complexity of the business and whether all necessary steps have been taken.
Is a notice of dissolution required in Oregon?
Yes, a notice of dissolution is required to be published in a newspaper in the county where the business was located.
Can I dissolve a nonprofit corporation in Oregon?
Yes, you can dissolve a nonprofit corporation in Oregon by following the same process as for a for-profit corporation.
What happens if I don’t dissolve my business in Oregon?
If you don’t properly dissolve your business in Oregon, you may be held liable for future taxes or legal issues related to the business.
Can I dissolve my business in Oregon if I am in the middle of a lawsuit?
No, you must resolve any outstanding legal disputes before you can dissolve your business in Oregon.
Can I dissolve my business in Oregon if I have shareholders?
Yes, if you have shareholders, they must approve the dissolution before it can be completed.
Do I need an attorney to dissolve my business in Oregon?
It is not required to hire an attorney to dissolve your business in Oregon, but it is recommended to ensure that the process is handled correctly.
Can I dissolve my business in Oregon if I am bankrupt?
Yes, you can dissolve your business in Oregon if you are bankrupt, but may have to follow additional bankruptcy proceedings.
Where can I get more information on dissolving a business in Oregon?
You can visit the Oregon Secretary of State’s website to get more information on dissolving a business in Oregon.
Is there a penalty for failing to file articles of dissolution in Oregon?
Yes, there may be penalties for failing to properly dissolve a business in Oregon, including fines or legal action.
What happens if I fail to notify all creditors before dissolving my business in Oregon?
Failing to notify all creditors before dissolving a business in Oregon can result in legal action or financial penalties.
Can I dissolve my Oregon business if I have employees?
Yes, but you must follow all Oregon laws regarding the termination of employees.
How do I ensure that all Oregon business regulations are followed during the dissolution process?
It is recommended to consult with an attorney to ensure that all Oregon business regulations are followed during the dissolution process.
Can I reopen my business in Oregon after dissolving it?
Yes, you can reopen your business in Oregon if you follow all necessary steps to do so.
Do I need to cancel any licenses or permits when dissolving my Oregon business?
Yes, you must cancel all applicable licenses or permits when dissolving your Oregon business.
Who must sign the articles of dissolution in Oregon?
The articles of dissolution in Oregon must be signed by a majority of the board of directors or members.
When does a dissolved business officially cease to exist in Oregon?
A dissolved business in Oregon officially ceases to exist when the Oregon Secretary of State issues a certificate of dissolution.
Can I dissolve my Oregon business if it has outstanding lawsuits?
No, any outstanding lawsuits must be resolved before dissolving a business in Oregon.
What do I do with any remaining assets when dissolving my business in Oregon?
Any remaining assets of a dissolved business in Oregon should be distributed according to the business’s articles of incorporation or bylaws.
Can I object to the dissolution of my business in Oregon?
Yes, if you object to the dissolution of your business in Oregon, you should consult with an attorney or contact the Oregon Secretary of State.
Are there any special requirements for dissolving a foreign business in Oregon?
Yes, foreign businesses must follow additional steps in order to properly dissolve in Oregon, including obtaining a certificate of withdrawal.
Does Oregon require that a business be dissolved in the same way it was incorporated?
No, Oregon only requires that a business be properly dissolved according to state laws. Different entity types may have different processes for dissolution.
Is it possible to dissolve a business in Oregon without notifying the state?
No, dissolving a business in Oregon requires the filing of paperwork with the Secretary of State.
Can I dissolve my Oregon business on my own, or should I use a lawyer or accountant?
It is possible to dissolve your Oregon business on your own, but consulting with a lawyer or accountant can ensure the process is done correctly and without legal consequences.
How much does it cost to dissolve a business in Oregon?
The filing fee for dissolving a business in Oregon varies depending on the type of entity, but can range from $50 to $100.
Should I file Articles of Dissolution if I only want to dissolve my Oregon business temporarily?
No, Articles of Dissolution signify a permanent dissolution of a business in Oregon.
Do I need to file Articles of Dissolution to dissolve a sole proprietorship business in Oregon?
Sole proprietorships do not have to file formal dissolution paperwork, but they may need to notify government agencies, creditors, and clients that the business is closed.
What happens to my business assets when I dissolve my Oregon business?
The assets of an Oregon business that is dissolved are typically sold or distributed to pay any outstanding debts or to the owners of the business.
Am I still responsible for paying taxes after dissolving my Oregon business?
Yes, dissolved businesses are still responsible for filing outstanding tax returns and paying any owed taxes.
Can I avoid paying any owed taxes if I dissolve my Oregon business?
No, the IRS and Oregon Department of Revenue will still pursue any owed taxes even if the business is dissolved.
What are the consequences of failing to properly dissolve my Oregon business?
Failure to properly dissolve an Oregon business can result in legal and financial consequences, such as debts and taxes remaining due.
Do I have to formally dissolve partnership agreements in Oregon?
Yes, partnership agreements in Oregon must be formally dissolved by filing the appropriate paperwork with the Secretary of State.
How is an LLC dissolved in Oregon?
An LLC is dissolved in Oregon by filing Articles of Dissolution with the Secretary of State.
What happens to members’ capital accounts when dissolving an LLC in Oregon?
Members’ capital accounts in an LLC in Oregon are disbursed during the dissolution process to pay any outstanding debts or to members.
How is a corporation dissolved in Oregon?
A corporation is dissolved in Oregon by filing Articles of Dissolution with the Secretary of State.
How are debts and liabilities handled during the dissolution of an Oregon corporation?
During the dissolution process, debts and liabilities of a corporation are typically paid off with money from the business, and any excess is distributed to shareholders.
Can I revive a dissolved Oregon business?
Yes, it is possible to revive a dissolved Oregon business by filing a reinstatement application and meeting necessary requirements and obligations.
How do I cancel my Oregon business registration with the Department of Revenue?
To cancel your business registration with the Oregon Department of Revenue, contact them in writing or online and provide the necessary information.
When must annual renewals be filed with the Secretary of State for an Oregon corporation?
Annual renewals for an Oregon corporation are due on or before the anniversary date of the corporation’s formation.
How does the Secretary of State confirm receipt of dissolution paperwork for an Oregon business?
Confirmation of receipt of dissolution paperwork in Oregon can be requested through the Oregon Secretary of State’s office or online via the Oregon Business Registry.
What notice must be given to known creditors and claimants in Oregon upon dissolving a business?
Known creditors and claimants must be provided notice of the Oregon business dissolution at least 20 days before the effective date.
Can a donor advised fund continue after the dissolution of the sponsoring organization in Oregon?
No, if the organization sponsoring a donor advised fund in Oregon is dissolved, the fund must be distributed to its designated recipients.
What happens to reserved entity names when dissolving an Oregon business?
Reserved entity names in Oregon do not expire immediately upon business dissolution, but the name may be used by others without interference or consequence.
What happens to business registrations and licenses when dissolving an Oregon business?
Business registrations and licenses in Oregon may need to be surrendered or terminated during business dissolution.
Will any legal agreements survive the dissolution of an Oregon business?
Legal agreements of a dissolved Oregon business may survive dissolution, but typically do not remain enforceable without the business.
Are employee rights affected by the dissolution of an Oregon business?
Employee rights in an Oregon business may be affected by dissolution, such as requirements for severance pay or timely notification of termination.
What’s the implication of the quiet tax payment statute on the dissolution of an Oregon business?
Benefiting shareholders can be attacked under the quiet tax payment if after the dissolved corporation paid various taxes and all the creditor, the Dissuaying Attorney General leavages outstanding claim after two years, the benefiting shareholders became joint liability and will be required to pay the claim.

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Conclusion

Dissolving your Oregon LLC is an important and often emotional decision that signifies the end of a business journey. While it may be challenging, ensuring that all legal requirements and obligations are met is essential to avoid future complications or liabilities. By diligently following the steps outlined in this guide and working closely with the relevant state agencies, you can smoothly navigate the dissolution process while maintaining compliance with Oregon regulations.

As you close this chapter in your business journey, remember that new opportunities may lie ahead. We invite you to explore LLCBase with your Oregon LLC dissolution needs. We wish you the best of luck in your future endeavors and hope to assist in any way we can.

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