Starting a Corporation in Oregon | What You Need to Know


Steve Bennett
Steve Bennett
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Start a Corporation in Oregon

In Oregon, starting a corporation can benefit entrepreneurs looking to establish a separate legal entity for their business. Incorporating your business provides liability protection for its owners and offers potential tax benefits and a professional image. This comprehensive guide will walk you through Starting a Corporation in Oregon, from choosing a corporate name to fulfilling ongoing compliance requirements. Some people consider starting a corporation since it has advantages and benefits rather than Starting an LLC in Oregon.

Webinarcare Editorial Team will help you gain knowledge in starting a corporation with thorough research and market study. It would be best to cross-check all the factors in this article before forming a corporation.

What is a Corporation in Oregon?

A corporation in Oregon is a business organization recognized as a separate legal entity from its owners, also known as shareholders. When a corporation is formed, shareholders invest capital by purchasing shares of stock and, in return, become partial company owners. The corporation is managed by a board of directors elected by the shareholders to oversee the company’s operations and make important decisions. Corporations in Oregon are required to have at least Three directors. One of the main advantages of a corporation in Oregon is that it provides limited liability protection to its shareholders, meaning their assets are not at risk if the corporation incurs debt or is legally sued.

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Common Types of Corporations

Before you start with a corporation, you should know what type of corporation you will form. There are several different forms of corporations you can take into consideration, depending on your corporation’s objectives and ownership structure.

C-Corporation

C-Corporation is the most known type of incorporation. They have almost all corporate distinguishing characteristics. Profits are distributed to corporate owners who are taxed at an individual level. The corporation is taxed similarly to a business unit.

S-Corporation

S-Corporation in Oregon is set up similarly to a C-corporation but has different tax implications and owner limits. An S-Corporation has no more than 100 stockholders and is not taxed separately. These business units must also file paperwork with the Internal Revenue Service (IRS) to obtain their status.

Nonprofit Corporation

Religious, educational, and charity institutions frequently use nonprofit businesses to run their operations without making a profit. Thus, a nonprofit corporation is exempt from paying taxes. The nonprofit organization’s gifts, contributions, or cash are reinvested in the company to fund its growth, future endeavors, or operations.

It is recommended to Start a Corporation in Oregon if you would like to provide limited liability protection to your shareholders rather than Oregon LLC. However, you may want to consult to LegalZoom’s Business Attorney before starting a business.

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How to Start a Corporation in Oregon

To start a corporation in Oregon, you must follow the below steps that, include choosing a corporate name, hiring a Registered Agent, appointing directors, filing for Articles of Incorporation, creating corporate bylaws, holding the initial board of directors, issuing stock, obtaining required licenses and permits, registering with state tax agencies, and annual reporting and ongoing compliance. All these steps are basic ones. It can be changed depending on the type of corporation you form and the nature of your business.

Step 1: Choosing a Corporate Name

The first step in starting a corporation is choosing an available name that complies with Oregon naming rules. Most states require that the name of a corporation be distinguishable from other registered business names and include a corporate designator such as “Corporation,” “Incorporated,” “Company,” or an abbreviation thereof.

Here are some guidelines you must follow while naming your corporation in Oregon-

  • Your business name must contain entity identifiers, such as “Incorporated,” “Limited,” “Corporation,” or “Company,” or an abbreviation, such as “Inc.,” “Co.,” or “Ltd.”
  • Exclude any words in your business name, such as “Trust,” “Bank,” “Credit Union,” or “Trustee,” or words related to a government agency, such as “FBI,” “State Department,” or “Treasury.”

To check the availability of your desired corporate name, you can search the Oregon Secretary of State‘s business name database and Business Name Search in Oregon. If the name is available, you may choose to reserve it for a specific period of 120 days by filing a name reservation application and paying the online name reservation fee of $100 and mail name reservation fee of $100. If your corporation plans to operate under a name other than its legal name, you may also need to register a fictitious or “doing business as” (DBA) name.

The DBA filing can be done by three methods, online, by mail, and in person filing., which costs around $50. In addition, the DBA’s validity in Oregon is two years, which you can file in Oregon Secretary of State.

You can check out How to File a DBA in Oregon for clearer understanding.

Step 2: Hire a Registered Agent

Hiring a Registered Agent is essential in starting a corporation. Registered Agent is a person or company responsible for receiving important legal documents, tax notices, and other correspondence on behalf of your corporation. They ensure that your corporation remains compliant with state regulations and requirements. There are Oregon Registered Agent Services to check in forming Oregon Corporation. We reviewed some of the best-registered agent services and provided features as an add-on with their packages.

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Step 3: Appointing Directors

Corporations in Oregon are required to have at least Three directors, though some states may require more. Directors are responsible for overseeing the corporation’s management and making major decisions on behalf of the company. In Oregon, directors must be at least 18 years old and do not need to be state residents.

When appointing directors, it is essential to consider individuals who are knowledgeable, trustworthy, and capable of making sound business decisions. Maintaining a record of appointed directors, including their names, addresses, and terms of service, is also a good idea.

Step 4: Preparing and Filing Articles of Incorporation

After you appoint the initial board of directors in your Oregon corporation, the next step is to write and file a Articles of Incorporation. In writing, the Oregon Articles of Incorporation, the corporation name, principal place of business, the purpose of business, Registered Agent contact information, and the names and addresses of incorporators and initial board members, should be written.

To officially form your Oregon corporation, you must prepare and file Articles of Incorporation with the Oregon Secretary of State. The Articles of Incorporation is a legal document that outlines essential information about your corporation, such as its name, address, purpose, and details about its stock.

The specific requirements for Articles of Incorporation vary by state, but generally, the document must include the following:

  • The corporate name
  • The purpose of the corporation
  • The name and address of the registered agent
  • The names and addresses of the initial directors
  • The number of authorized shares and their par value
  • The name and address of the incorporator(s)

Once the Articles of Incorporation are complete, please submit them to the Oregon Secretary of State’s office, along with the required filing fee. Fees vary by state, but in Oregon, the Articles of Incorporation filing fee costs around $100 for online and by mail filing. It is crucial to provide accurate and complete information on this document, as errors or omissions may result in delays or rejection of your filing.

  • Online Filing: Create an account/Log in to the SOS site, get the online form, fill it, and submit online
  • Offline filing: Send the form by mail to Secretary of State, Corporation Division, 255 Capitol St. NE, Suite 151, Salem, OR 97310

Step 5: Creating Corporate Bylaws

Now you are done filing Articles of Incorporation in Oregon, the next step is to draft corporate bylaws. While not always required by law, creating corporate bylaws is essential in establishing Oregon corporation. Bylaws are the internal rules and regulations that govern the corporation’s operations and management. They outline the rights and responsibilities of directors, officers, and shareholders and provide guidelines for holding meetings and making decisions.

Key provisions to include in your corporate bylaws may include:

  • The corporation’s purpose and principal place of business
  • The roles and responsibilities of directors, officers, and shareholders
  • The process for appointing and removing directors and officers
  • The procedures for holding annual and special meetings
  • The methods for amending the bylaws and Articles of Incorporation
  • The procedures for issuing stock and maintaining shareholder records

Once the bylaws are drafted, they must be adopted by the corporation’s board of directors. Keeping a copy of the bylaws with your corporate records and updating them to reflect changes in the corporation or applicable laws is essential.

Step 6: Holding the Initial Board of Directors Meeting

The initial board of directors meeting is a crucial milestone for your Oregon corporation. During this meeting, the directors will adopt the corporate bylaws, elect officers, and make other key decisions to set the foundation for the corporation’s operations.

The agenda for the initial board meeting may include the following:

  • Adopting the corporate bylaws
  • Ratifying any pre-incorporation actions taken by the incorporator(s)
  • Electing corporate officers (e.g., president, vice president, secretary, treasurer)
  • Designating a corporate bank account
  • Authorizing the issuance of stock
  • Approving necessary licenses, permits, and tax registrations

It is essential to keep detailed minutes of the initial board meeting, documenting the decisions made and actions taken. These minutes should be stored with your corporate records.

Step 7: Issuing Stock

Corporations in Oregon are required to issue stock to their owners, also known as shareholders. When preparing to issue stock, you must determine the number of authorized shares and their par value, as outlined in your Articles of Incorporation. You may choose to issue different classes of stock, each with its rights and privileges, such as voting rights and dividend preferences.

The process for issuing stock typically involves the board of directors approving a stock issuance resolution, determining the price per share, and recording the issuance in the corporation’s stock ledger. Maintaining accurate and up-to-date records of all stock transactions, including transfers and cancellations, is crucial to ensure proper ownership tracking and compliance with securities laws.

Step 8: Obtaining Required Licenses and Permits

Depending on the nature of your corporation’s activities and location, you may need to obtain various licenses and permits to operate legally. These may include federal, state, and local requirements, such as:

  • A Federal Employer Identification Number (EIN) for tax reporting and employee withholding purposes.
  • State sales and use tax registration, if your corporation sells taxable goods or services
  • Professional or occupational licenses for specific industries (e.g., healthcare, construction, food service)
  • Oregon Business Licenses, zoning permits, and health department approvals

Researching and obtaining all required Oregon licenses and permits before commencing operations and maintaining compliance with any ongoing renewal or reporting requirements is essential.

Step 10: Registering with State Tax Agencies

In addition to obtaining licenses and permits, your Oregon corporation may also need to register with various tax agencies. This may include registering for sales and use tax, obtaining an Employer Identification Number (EIN) in Oregon for payroll tax purposes, and filing state income tax and franchise tax returns.

An EIN will serve as the tax ID for your Oregon corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Oregon can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

Each state has tax requirements, so consult a tax professional or Oregon Department of Revenue for guidance on your specific obligations.

Step 11: Annual Reporting and Ongoing Compliance

Once your Oregon corporation is up and running, you must fulfill ongoing reporting and compliance requirements to maintain good standing. This may include filing Annual Report with the Oregon Secretary of State, updating your corporate records to reflect changes in directors or officers, and staying current on any required licenses or permits.

In addition, it is essential to stay informed about changes in corporate laws and regulations that may impact your business and to seek professional advice when needed.

Paying Your Taxes in Oregon

Even if you have established your corporation in Oregon, pay your taxes and keep everything up to date so you won’t pay any penalty. Unlike an LLC, there is a corporate tax that every corporation in Oregon has to pay. On the other hand, they must pay income taxes based on their business income. Some other types of taxes in Oregon are sales tax, franchise tax (not applicable to all the states), and other state taxes.

Cost of Forming a Corporation in Oregon

In forming a corporation in Oregon, a filing and Annual fee must be paid. Without it, your corporation won’t operate. A corporation’s initial filing fee may vary from state to state. However, in Oregon, it costs $100 for online and by mail filing. The corporation in Oregon also has to file an Annual Report (though it might not be mandatory, it is recommended to file one). Ensure you comply with all the necessary fees and costs so your corporation will run successfully and smoothly.

FAQs

What is the process for incorporating in Oregon?
To incorporate in Oregon, you must file articles of incorporation with the Secretary of State.
Do I need a lawyer to incorporate in Oregon?
No, you do not need a lawyer to incorporate in Oregon.
Is there a minimum number of shareholders required to form a corporation in Oregon?
No, there is no minimum number of shareholders required to form a corporation in Oregon.
What is the minimum number of directors required for an Oregon corporation?
An Oregon corporation must have at least one director.
Can a corporation have only one employee in Oregon?
Yes, a corporation can have only one employee in Oregon.
What is the cost to incorporate in Oregon?
The filing fee to incorporate in Oregon is $100.
How long does it take to incorporate in Oregon?
It generally takes 1-3 weeks to incorporate in Oregon.
Can I incorporate in Oregon if I am not a US citizen?
Yes, you can incorporate in Oregon if you are not a US citizen.
Does Oregon have an annual report requirement for corporations?
Yes, Oregon requires corporations to file an annual report and pay a $100 fee.
What are the tax advantages of incorporating in Oregon?
Oregon has a relatively low corporate income tax rate and no sales tax.
Can I change the name of my corporation in Oregon after incorporation?
Yes, you can change the name of your corporation in Oregon after incorporation.
Are there any residency requirements for officers or directors of an Oregon corporation?
No, there are no residency requirements for officers or directors of an Oregon corporation.
What are the initial corporate formalities required in Oregon?
1) Preparing and filing articles of incorporation; 2) Adopting bylaws; 3) Appointing initial directors and officers; 4) Issuing shares of stock.
What information is required to be included in the articles of incorporation in Oregon?
The name and purpose of the corporation, the number of authorized shares, the names and addresses of the incorporators, and the name and location of the corporation’s registered agent.
Are there any specific rules for naming my corporation in Oregon?
Yes, the name of the corporation must be distinguishable from other registered entities in Oregon and cannot imply illegal activity.
Can I reserve a corporation name in Oregon before incorporating?
Yes, you can reserve a corporation name in Oregon for 120 days by filing a Name Reservation Request with the Secretary of State.
Can I incorporate my business in Oregon online?
Yes, you can file your articles of incorporation online through the Oregon Secretary of State’s Business Xpress portal.
Does Oregon have an alternative to the traditional C corporation?
Yes, Oregon also allows for the formation of a Limited Liability Company (LLC).
Will forming a corporation in Oregon protect my personal assets?
Yes, forming a corporation in Oregon can protect your personal assets from business debts and lawsuits.
How do I file taxes for my Oregon corporation?
You must file an Oregon corporate income tax return annually and pay any applicable state taxes due.
What is the Oregon Corporate Memorandum Tax?
The Corporate Memorandum Tax is a one-time tax assessed on shares of authorized but unissued stock in Oregon corporations.
Can I incorporate in Oregon and operate in other states?
Yes, you can incorporate in Oregon and operate in other states by obtaining authorization to do business in those states.
How do I dissolve my Oregon corporation?
To dissolve an Oregon corporation, you must file Articles of Dissolution with the Secretary of State.
Can I revive an Oregon corporation that has been dissolved?
Yes, you can revive a dissolved Oregon corporation by applying for reinstatement with the Secretary of State.
Is there a penalty for failing to file an annual report in Oregon?
Yes, failing to file an annual report in Oregon can result in a $100 penalty and possible dissolution of the corporation.
Can I change the registered agent for my Oregon corporation after incorporation?
Yes, you can change the registered agent for your Oregon corporation by filing a Statement of Change of Registered Agent with the Secretary of State.
Can I file an amended articles of incorporation in Oregon?
Yes, you can file an amended articles of incorporation in Oregon if you need to change information contained in your original articles.
Can I convert an existing business into an Oregon corporation?
Yes, you can convert an existing business into an Oregon corporation by filing Articles of Conversion with the Secretary of State.
What is the process for starting a corporation in Oregon?
To start a corporation in Oregon, you need to file Articles of Incorporation with the Oregon Secretary of State.
How much does it cost to form a corporation in Oregon?
In Oregon, filing Articles of Incorporation costs $100 (as of 2021).
Do I need to have shareholders to start a corporation in Oregon?
No, although corporations generally issue shares of stock to their owners or shareholders.
Can I form a corporation in Oregon without an attorney?
Yes, in Oregon, you can file Articles of Incorporation yourself without hiring an attorney. However, it is a good idea to have an attorney review your paperwork.
What corporate tax laws should I be aware of in Oregon?
Oregon’s corporate income tax rate is 7.6 percent, and corporations are also subject to a minimum tax of $150.
Can non-US residents start a corporation in Oregon?
Yes, non-US residents are permitted to start a corporation in Oregon.
How long does the process of forming an Oregon corporation generally take?
It typically takes about a week to process Articles of Incorporation in Oregon.
Does the state of Oregon require that corporations adopt bylaws?
Yes, all corporations must adopt bylaws according to Oregon law.
Can an Oregon corporation issue preferred stock?
Yes, Oregon corporations can issue both common and preferred stock.
What is a registered agent, and do I need one for my Oregon corporation?
A registered agent is an individual or business entity responsible for receiving legal and tax documents on behalf of the corporation. Oregon requires all corporations to appoint a registered agent.
Can I change the name of my Oregon corporation after I’ve formed it?
Yes, you can change the name of your Oregon corporation by filing an Amendment to the Articles of Incorporation.
Are there any annual reporting requirements for Oregon corporations?
Yes, Oregon corporations are required to file annual reports and pay an annual fee.
What types of businesses are prohibited from forming corporations in Oregon?
Certain professions, such as attorneys, doctors, and architects, are prohibited from forming corporations in Oregon.
Can an Oregon corporation operate in other states?
Yes, an Oregon corporation can operate in other states, but it must be registered to do business in those states.
How many shareholders can an Oregon corporation have?
There is no limit to the number of shareholders that an Oregon corporation may have.
What is the role of the Secretary of State in Oregon when it comes to forming a corporation?
The Secretary of State is responsible for processing Articles of Incorporation for corporations in Oregon.
Do I need to obtain any licenses or permits to form a corporation in Oregon?
No, unlike some other types of businesses, there are no specific licenses or permits required to form a corporation in Oregon.
Are there any residency requirements for forming an Oregon corporation?
No, there are no residency requirements for forming an Oregon corporation.
Can I form a nonprofit corporation in Oregon?
Yes, you can form a nonprofit corporation in Oregon by filing Articles of Incorporation with the Oregon Secretary of State.
Can I have a corporation with just one owner in Oregon?
Yes, you can form a single-member corporation in Oregon.
Can a corporation be dissolved in Oregon?
Yes, a corporation can be dissolved in Oregon by filing Articles of Dissolution with the Oregon Secretary of State.
How do I obtain an EIN for my Oregon corporation?
You can apply for an EIN (Employee Identification Number) for your Oregon corporation with the IRS online.
What are the advantages of forming a corporation in Oregon?
The advantages of forming a corporation in Oregon include limited liability protection for individual owners, being able to raise capital by issuing stock, and reduced tax implications.
Can an Oregon corporation have multiple classes of stock?
Yes, Oregon corporations can issue both common and preferred stock, and can have multiple classes of each type.
How are corporations taxed in Oregon?
In Oregon, corporations pay a corporate income tax of 7.6 percent, and also face a minimum tax of $150.
Can I start a series LLC in Oregon?
Yes, Oregon is one of several states that allows for series LLCs, which operate similar to standard LLCs but allow for the creation of distinct series within a single entity.
What is a professional corporation, and can I form one in Oregon?
A professional corporation is a type of corporation designed for licensed professionals, such as doctors or lawyers. Oregon permits the formation of professional corporations for certain licensed professions.

Also Read

How to Save Money While Forming Your Oregon Corporation

First and foremost, it’s essential to do your research before diving into the process of forming your corporation. Understanding the requirements and potential costs associated with setting up a business entity in Oregon will help you plan ahead and avoid any unexpected expenses. There are various resources available online that can provide valuable information on the steps involved in forming a corporation, as well as tips on how to do it cost-effectively.

When it comes to choosing a name for your corporation, it’s important to keep in mind that there are guidelines and restrictions in place. Before you go through the process of registering your business name, make sure to check for any potential conflicts or similarities with existing businesses in Oregon. This will not only save you time and effort but also prevent any legal issues down the line that could result in additional costs.

Another way to save money while forming your Oregon corporation is to handle as much of the paperwork and administrative tasks yourself as possible. While hiring a lawyer or business consultant can provide valuable expertise and guidance, it can also be costly. By taking the time to educate yourself on the process and requirements, you may be able to handle the majority of the paperwork without the need for professional assistance.

It’s also worth considering the various options available for filing your business formation documents. Many entrepreneurs choose to file online through the Oregon Secretary of State’s website, as this tends to be a more affordable and efficient option compared to filing by mail or in person. Additionally, some online filing services offer streamlined processes that can help you save time and money when setting up your corporation.

Furthermore, when it comes to choosing a registered agent for your Oregon corporation, there are ways to cut costs without sacrificing quality. While using a professional registered agent service can provide peace of mind and ensure compliance with state regulations, it can also come with a price tag. Some entrepreneurs opt to designate themselves or a trusted individual as the registered agent to save money on this aspect of forming a corporation.

In conclusion, forming your Oregon corporation doesn’t have to break the bank. By doing your research, handling tasks yourself, choosing a cost-effective filing method, and exploring alternatives for registered agent services, you can save money while still setting up your business entity effectively. With careful planning and consideration, you can ensure that your corporation is established in a financially responsible manner that sets you up for success in the long run.

Conclusion

Starting a corporation in Oregon involves several critical steps, from choosing a corporate name to fulfilling ongoing compliance requirements. Following the steps outlined in this guide and seeking professional advice when needed, you can successfully establish your Oregon corporation and enjoy the benefits of limited liability, potential tax savings, and a professional business image.

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