5. Business Formation

Establishing the right business entity is one of the most critical decisions you’ll make as an entrepreneur or business owner, and choosing incorrectly can have lasting consequences for your liability protection, tax obligations, and operational flexibility. I guide clients through the complex landscape of entity selection and formation, helping you navigate the nuances between LLCs, corporations, partnerships, and specialized entities to find the structure that best serves your unique business goals and circumstances. Whether you’re a solo practitioner seeking professional liability protection, a tech startup planning for future investment rounds, or a family business looking to optimize tax efficiency, I provide comprehensive legal counsel to ensure your entity is properly formed, compliant with Oregon law, and positioned for long-term success. From drafting operating agreements and bylaws to handling regulatory filings and ongoing compliance requirements, my practice focuses on giving you the solid legal foundation your business deserves, allowing you to concentrate on what you do best—growing your enterprise.

Some business entities defined.

Under Oregon law, the following business entities can be legally formed and operated:

For-Profit Entities

Corporations

  • Business Corporation (aka C Corporations or just Corporations) (ORS Chapter 60)
  • S Corporation (Subchapter S of the IRS Code)
  • Professional Corporation (ORS Chapter 58)
  • Benefit Company/B-Corporation (ORS 60.750-60.770)

Limited Liability Companies

  • Limited Liability Company (LLC) (ORS Chapter 63)
  • Professional Limited Liability Company (PLLC) (ORS Chapter 58)

Partnerships

  • General Partnership (ORS Chapter 67)
  • Limited Partnership (ORS Chapter 70)
  • Limited Liability Partnership (LLP) (ORS Chapter 67)

Sole Proprietorship

  • Individual business ownership (no specific statutory requirements for formation)

Non-Profit Entities

Non-Profit Corporations

  • Public Benefit Corporation (ORS Chapter 65)
  • Mutual Benefit Corporation (ORS Chapter 65)
  • Religious Corporation (ORS Chapter 65)

Cooperative Corporations

  • Cooperative Corporation (ORS Chapter 62)
  • Worker Cooperative (ORS 62.803-62.835)

Specialized Entities

Professional Entities

  • Professional corporations and PLLCs are available for licensed professionals such as doctors, lawyers, accountants, architects, and other regulated professions.

Other Specialized Forms

  • Series LLC (Oregon adopted series LLC legislation in 2018)
  • Low-profit Limited Liability Company (L3C) – though Oregon doesn’t have specific L3C legislation, LLCs can be structured for low-profit purposes

Each entity type has specific formation requirements, governance structures, tax implications, and liability protections. The choice depends on factors like the nature of the business, number of owners, liability concerns, tax considerations, and operational flexibility needs.

For formation of most entities, filing is required with the Oregon Secretary of State’s Corporation Division, along with applicable fees and required documentation.

FAQ

Which business entity type should I choose?

The choice depends on several factors:

  • Liability protection needed – LLCs and corporations provide personal liability protection
  • Tax considerations – LLCs offer pass-through taxation; corporations face double taxation unless S-Corp election made
  • Management structure preferences – Corporations have formal structure; LLCs are more flexible
  • Number of owners – Some entities work better for single owners vs. multiple owners
  • Future growth plans – Corporations may be better for raising investment capital
  • Professional licensing requirements – Licensed professionals may need PC or PLLC

Corporations: What is the required information for crafting Articles of Incorporation?

  • Corporate name
  • Registered agent name and address
  • Number of authorized shares
  • Incorporator name and signature
  • Principal office address (optional)

LLCs: What is the required information for crafting Articles of Organization?

  • LLC name
  • Registered agent name and address
  • Management structure (member-managed or manager-managed)
  • Organizer name and signature
  • Principal office address (optional)

What is a registered agent and do I need one?

A registered agent is a person or entity that:

  • Has a physical Oregon address (not P.O. Box)
  • Is available during normal business hours
  • Receives legal documents and official correspondence on behalf of your business

Every Oregon corporation and LLC must have a registered agent. You can serve as your own registered agent if you have an Oregon address, or hire a registered agent service.

What are the name requirements for Oregon business entities?

Corporation names must:

  • Include “Corporation,” “Company,” “Incorporated,” or abbreviations
  • Be distinguishable from existing entity names on file
  • Not contain prohibited words without proper licensing

LLC names must:

  • Include “Limited Liability Company” or “LLC”
  • Be distinguishable from existing entity names
  • Not contain prohibited words without proper licensing

What tax obligations do Oregon business entities have?

Federal taxes:

  • All entities need an EIN (Employer Identification Number)
  • Tax treatment varies by entity type
  • Corporations file Form 1120; LLCs typically pass-through to owners

Oregon state taxes:

  • Corporations pay Oregon corporate income tax
  • LLCs with more than one member pay minimum tax of $150
  • Single-member LLCs generally no separate Oregon tax filing required
  • Annual reports required for all entities

Do I need business licenses?

License requirements depend on:

  • Type of business activity
  • Business location (city/county requirements)
  • Professional licensing for certain occupations

Check with your local jurisdiction for specific requirements or ask when consulting with this office.