Single-Member LLC Operating Agreement — Oregon

Single-Member LLC Operating Agreement (OREGON)

This Operating Agreement (the "Agreement") of [COMPANY NAME], LLC, an Oregon limited liability company (the "Company"), is entered into and effective as of [__/__/____] (the "Effective Date") by [SOLE MEMBER NAME] (the "Member"), the sole member of the Company, pursuant to the Oregon Limited Liability Company Act, ORS Chapter 63 (the "Act").

Quick-Reference Summary

Article I — Formation

1.1 Formation. The Company was organized as an Oregon limited liability company on [__/__/____] upon the filing of Articles of Organization with the Oregon Secretary of State, Corporation Division, pursuant to ORS § 63.044 and § 63.047.

1.2 Name. The name of the Company is [COMPANY NAME], LLC.

1.3 Principal Office. The principal office of the Company is located at:
[________________________________]
[________________________________]

1.4 Registered Office and Agent. The Company's registered office in Oregon and its registered agent are:

• Registered Agent: [________________________________]
• Registered Office: [________________________________]

1.5 Term. The Company shall continue perpetually until dissolved in accordance with Article VII or ORS § 63.621.

1.6 Sole Member. The Member intends that the Company be a single-member limited liability company under the Act and a "disregarded entity" for federal income tax purposes under Treas. Reg. § 301.7701-3, unless the Member elects otherwise.

Article II — Purpose and Powers

2.1 Purpose. Pursuant to ORS § 63.074, the Company is formed for the following purpose(s) and any other lawful business or activity:
[________________________________]

2.2 Powers. The Company shall have all powers granted to a limited liability company under ORS § 63.077, including the power to own property, enter contracts, sue and be sued, and engage in any lawful act.

2.3 Limitation on Liability. Pursuant to ORS § 63.165, no Member, manager, employee, or agent of the Company shall be personally liable for the debts, obligations, or liabilities of the Company solely by reason of being a Member, manager, employee, or agent.

Article III — Member (Sole Member)

3.1 Identity of Sole Member.

3.2 Initial Capital Contribution. The Member has contributed to the Company the cash and/or property described in Schedule A, with an agreed value of $[____________].

3.3 Additional Contributions. The Member is not required to make additional capital contributions but may do so at the Member's sole discretion. Any additional contribution shall be recorded on Schedule A.

3.4 No Personal Liability. Consistent with ORS § 63.165, the Member is not personally liable for any debt, obligation, or liability of the Company arising in contract, tort, or otherwise.

3.5 Member's Authority. The Member possesses full authority to bind the Company, subject to Article IV.

Article IV — Management

4.1 Management Structure. Check one:

☐ Member-Managed (default under ORS § 63.130). The Member shall manage the Company and shall have full authority to act on its behalf as set forth in ORS § 63.140.

☐ Manager-Managed. The Company is managed by one or more managers, as designated on Schedule B. The Articles of Organization shall reflect this election as required by ORS § 63.047. The Member retains the right to remove and replace any manager at any time, with or without cause.

4.2 Authority of the Member (or Manager). The Member (or designated manager) is authorized to:
(a) Execute contracts, leases, deeds, notes, and other instruments on behalf of the Company;
(b) Open and operate Company bank accounts;
(c) Hire and terminate employees and independent contractors;
(d) Borrow funds, issue notes, and pledge Company assets as collateral;
(e) Acquire, hold, and dispose of Company property;
(f) Engage tax, legal, and other professionals; and
(g) Take any other action permitted under ORS Chapter 63 or this Agreement.

4.3 Standard of Conduct. The Member (and any manager) shall discharge duties to the Company in accordance with the standards of conduct set forth in ORS § 63.155, including the duties of loyalty and care, except to the extent modified by this Agreement.

4.4 Conflict-of-Interest Transactions. A transaction between the Company and the Member (or an affiliate) is not voidable solely because of the Member's interest, provided the transaction is fair to the Company at the time it is authorized.

4.5 Officers (Optional). The Member may, but is not required to, designate officers of the Company. Any such officers serve at the pleasure of the Member.

Article V — Capital Accounts and Distributions

5.1 Capital Account. A capital account shall be maintained for the Member in accordance with Treas. Reg. § 1.704-1(b)(2)(iv).

5.2 Allocation of Profits and Losses. Consistent with ORS § 63.185, all items of income, gain, loss, deduction, and credit shall be allocated 100% to the Member.

5.3 Distributions. Distributions of cash or property shall be made to the Member at such times and in such amounts as the Member determines, subject to ORS § 63.229 (no distribution that would render the Company unable to pay its debts as they become due or whose total assets would be less than its total liabilities).

5.4 Tax Distributions. The Member may cause the Company to distribute amounts sufficient to enable the Member to satisfy federal, state, and local tax liabilities attributable to Company income.

5.5 Minimum Excise Tax. If the Company is taxed as a partnership (or S corporation upon election), the Company shall timely pay the Oregon minimum excise tax of $150 to the Oregon Department of Revenue.

5.6 In-Kind Distributions. Distributions in kind shall be permitted only upon the Member's written election, consistent with ORS § 63.219.

Article VI — Transfer of Interest / Charging Order (ORS § 63.259)

6.1 Membership Interest Defined. Consistent with ORS § 63.239, the Member's interest in the Company is personal property and consists of (a) economic rights (rights to distributions) and (b) governance rights (rights to manage and vote).

6.2 Voluntary Transfer. The Member may assign, sell, pledge, or otherwise transfer all or any portion of the Member's interest, consistent with ORS § 63.249. Upon any transfer that results in the Company having more than one member, this Agreement shall be amended or replaced to reflect the multi-member structure.

6.3 Admission of Additional Members. A transferee of an economic interest does not become a Member unless admitted in writing by the Member, consistent with ORS § 63.245 and § 63.255.

6.4 Charging Order. Pursuant to ORS § 63.259, on application by a judgment creditor of the Member, a court may charge the Member's transferable interest with payment of the unsatisfied amount of the judgment. The charging order constitutes a lien on the Member's interest and the right to receive distributions otherwise payable to the Member.

6.5 Limitations of Oregon Charging-Order Protection — Disclosure. The Member acknowledges and has been advised that:
(a) ORS § 63.259 does not contain "sole and exclusive remedy" language found in some other states' LLC statutes;
(b) Oregon courts have not uniformly held that the charging order is the only remedy available to a judgment creditor of a sole member;
(c) Federal bankruptcy law may, under cases such as In re Albright and In re Ehmann, permit a bankruptcy trustee to step into the shoes of a sole member; and
(d) The Member should consult counsel regarding additional asset-protection planning if outside creditor exposure is a concern.

6.6 Death or Incapacity of Sole Member. Upon the Member's death or adjudicated incapacity:
(a) The Member's economic interest passes to the Member's estate, trust, heirs, or legatees by will, trust instrument, or intestate succession; and
(b) The successor-in-interest is admitted as a Member of the Company without dissolution, in order to avoid administrative dissolution under ORS § 63.621.

The Member designates the following successor-in-interest (revocable; may also be designated by will, trust, or pour-over):
[________________________________]

Article VII — Dissolution

7.1 Events of Dissolution. The Company shall be dissolved upon the first to occur of:
(a) The written election of the Member to dissolve;
(b) An event causing dissolution specified in this Agreement;
(c) Entry of a decree of judicial dissolution under ORS § 63.661; or
(d) Administrative dissolution by the Oregon Secretary of State under ORS § 63.647.

7.2 Winding Up. Upon dissolution, the Member (or a person designated by the Member) shall wind up the Company's affairs pursuant to ORS § 63.637, including:
(a) Collecting Company assets;
(b) Paying or making provision for Company liabilities;
(c) Distributing remaining assets to the Member in the order specified by ORS § 63.625; and
(d) Filing Articles of Dissolution with the Oregon Secretary of State under ORS § 63.631.

7.3 Notice of Claims. The winding-up Member may give notice to creditors under ORS § 63.641 and § 63.644 to bar untimely claims.

Article VIII — State-Specific Provisions

8.1 Oregon Law Controls. This Agreement shall be governed by and construed in accordance with the laws of the State of Oregon, and ORS Chapter 63 shall control to the extent of any conflict with this Agreement that the Act does not permit to be modified.

8.2 Annual Report. Pursuant to ORS § 63.787, the Member shall ensure the Company timely files its annual report with the Oregon Secretary of State by the anniversary of formation, accompanied by the $100 filing fee.

8.3 Oregon Excise Tax / Corporate Activity Tax. The Company shall file the appropriate Oregon tax returns and pay the $150 minimum excise tax (if applicable) under ORS § 317.090 and the Corporate Activity Tax if commercial activity exceeds the statutory threshold.

8.4 No Series LLC. The Member acknowledges that Oregon law does not authorize series LLCs. Any segregation of assets shall be accomplished through subsidiary entities or contractual arrangements.

8.5 Operating Agreement; Statutory Override. The Member intends this Agreement to constitute the "operating agreement" within the meaning of ORS § 63.057 and § 63.431, and to override the default rules of the Act to the maximum extent permitted by Oregon law.

8.6 Non-Waivable Provisions. Notwithstanding any provision of this Agreement, the Member acknowledges that certain provisions of ORS Chapter 63 cannot be waived or modified, including the duty of good faith and fair dealing under ORS § 63.155, the rights of third-party creditors, and statutory protections for involuntary dissolution.

8.7 Indemnification. Consistent with ORS § 63.160, the Company shall indemnify the Member and any manager or officer against losses, damages, and expenses (including reasonable attorneys' fees) incurred in connection with the Company's business, except for acts or omissions involving (a) willful misconduct, (b) a knowing violation of law, or (c) any transaction from which an improper personal benefit was derived.

Article IX — General Provisions

9.1 Entire Agreement. This Agreement constitutes the entire agreement of the Member regarding the operation of the Company and supersedes any prior agreement on the same subject matter.

9.2 Amendment. This Agreement may be amended only by a written instrument signed by the Member.

9.3 Severability. If any provision is held invalid or unenforceable, the remaining provisions shall continue in full force and effect.

9.4 Successors and Assigns. This Agreement binds and inures to the benefit of the Member and the Member's heirs, executors, administrators, successors, and assigns.

9.5 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts and by electronic signature with the same effect as an original.

9.6 Notices. Notices to the Member shall be effective when delivered in person, by certified mail, or by electronic mail to the address on file with the Company.

9.7 Headings. Headings are for convenience only and do not affect interpretation.

Signature Block

IN WITNESS WHEREOF, the undersigned, being the sole Member of the Company, has executed this Operating Agreement as of the Effective Date.

ACKNOWLEDGMENT (Optional but Recommended)

State of Oregon, County of [____________________]

On [__/__/____], before me, the undersigned notary public, personally appeared [SOLE MEMBER NAME], known to me (or satisfactorily proven) to be the person whose name is subscribed to this instrument, and acknowledged execution thereof.

Notary Public: _______________________________
My commission expires: [__/__/____]

Schedule A — Capital Contributions

Schedule B — Managers (if Manager-Managed)

Pre-Execution Checklist

☐ Articles of Organization filed with Oregon Secretary of State (ORS § 63.047)
☐ EIN obtained from IRS (Form SS-4)
☐ Registered agent confirmed and consents in writing
☐ Initial capital contribution made and recorded on Schedule A
☐ Federal tax classification confirmed (disregarded, S-corp, or C-corp)
☐ Oregon BIN obtained if Company will have employees
☐ Annual report calendar reminder set for formation anniversary (ORS § 63.787)
☐ Oregon minimum excise tax and Corporate Activity Tax considered
☐ Business bank account opened in Company name
☐ Local business licenses and permits obtained
☐ Required insurance (general liability, professional liability, workers' comp) in place
☐ Operating Agreement signed and stored with corporate records
☐ Successor-in-interest designated (Section 6.6) and coordinated with estate plan
☐ Legal review by Oregon-licensed attorney completed

Sources and References

• Oregon Revised Statutes, Chapter 63 — Limited Liability Companies (Oregon Legislature): https://www.oregonlegislature.gov/bills_laws/ors/ors063.html
• ORS § 63.259 (Rights of Judgment Creditor Against Member): https://oregon.public.law/statutes/ors_63.259
• Oregon Secretary of State — Business Registry (Annual Report): https://sos.oregon.gov/business/Pages/default.aspx
• Oregon Department of Revenue — Corporation Excise and Income Tax: https://www.oregon.gov/dor/programs/businesses/pages/corp-requirements.aspx
• Charging Orders in Oregon (Heltzel Williams Compass): https://www.heltzel.com/compass/2012/summer/giving-debtors-their-charging-orders.php