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Oregon LLC |
Advantages of Limited Liability Company
- Limited Liability: Owners of a LLC have the limited liability protection of a corporation.
- Flexible Profit Distribution: Limited liability companies can select varying forms of distribution of profits. Unlike a common partnership where the split is 50-50, LLC have much more flexibility.
- No Minutes: Corporations are required to keep formal minutes, have meetings, and record resolutions. The LLC business structure requires no corporate minutes or resolutions and is easier to operate.
- Flow Through Taxation: All your business losses, profits, and expenses flow through the company to the individual members. You avoid the double taxation of paying corporate tax and individual tax. Usually, this will be a tax advantage, but circumstances can favor a corporate tax structure.
Disadvantages of Limited Liability Company
- Limited Life: Corporations can live forever, whereas a LLC is dissolved when a member dies or undergoes bankruptcy.
- Going Public: Business owners with plans to take their company public, or issuing employee shares in the future, may be best served by choosing a corporate business structure.
- Added Complexity: Running a sole-proprietorship or partnership will have less paperwork and complexity. A LLC may federally be classified as a sole-proprietorship, partnership, or corporation for tax purposes. Classification can be selected or a default may apply.
By Oregon and other state law in order to proceed with forming a llc, you need to prepare a written abstract detailing your llc purpose, the names of your initial Oregon LLC members, the name and address of your Oregon registered agent, the details of which will be introduced into the body of your LLC operating agreement and related Oregon LLC formation documents assembled for application to the state of Oregon.
Oregon’s Business Tax Climate Ranks 10th
Oregon ranks 10th in the State Business Tax Climate Index, which measures the impact on business of five major elements of the tax system: the percentage of income taken by all taxes, the individual income tax rates, the corporate income taxes, the sales tax rate, and the complexity of the tax system. Neighboring states ranked as follows: Washington (9th), Idaho (31st), Nevada (6th) and California (38th).Oregon’s State/Local Tax Burden Below National Average
Oregon’s state/local tax burden was consistently at or above the national average between 1990 and 1994. Estimated now at 9.5% of income, Oregon’s state/local tax burden stands at 34th nationally, below the national average of 10.0%.
Oregon’s Individual Income Tax System
Oregon’s personal income tax system consists of three separate brackets with a top rate of 9% kicking in at an income level of $6,300. That rate ranks 3rd highest among all states levying an individual income tax. Oregon’s 2002 individual income tax collections were $1,044 per person (5th highest nationally).
Oregon’s Corporate Income Tax System
Oregon’s corporate tax structure consists of a flat rate of 6.6% on all corporate income. Among states levying corporate income taxes, Oregon’s rate ranks 29th highest nationally. In 2001, corporate tax collections reached $93 per capita.
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