How to Start a Limited Partnership in Oregon | A Step-by-Step Guide

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Start a Limited Partnership in Oregon

A limited partnership is an attractive business structure for those who want to start an LLC in Oregon. It combines the best of both worlds, offering limited liability protection for limited partners and the ability to manage the business for general partners actively. This article will outline the steps on How to Start a Limited Partnership in Oregon, covering everything from researching and preparing to registering your limited partnership with the Oregon government and beyond.

Webinarcare Editorial Team will help you gain knowledge through thorough research and market study. Before starting your Oregon Limited Partnership, all the steps in this article must guide you.

Steps in Starting a Limited Partnership in Oregon

What is a Limited Partnership?

A Limited Partnership (LP) is a business structure comprising two types of partners: general and limited. It is a legal entity distinct from its partners and combines certain features of partnerships and corporations.

General partners are responsible for the day-to-day management of the business, make decisions on behalf of the partnership, and have unlimited liability for the partnership’s debts and obligations. This means their assets can be seized to cover the partnership’s liabilities if necessary.

Limited partners, on the other hand, are passive investors who do not participate in business management. They provide capital to the partnership and receive a share of the profits in return. Their liability is limited to the amount they have invested in the partnership, meaning that their assets are generally not at risk for the partnership’s debts beyond their investment.

It is suggested that you speak with a legal professional before you begin setting up your limited partnership in Oregon. They’ll understand what’s best for you and your company. To safeguard your personal assets from business debts, you can always start an LLC rather than a limited partnership.

– WEBINARCARE EDITORIAL TEAM

Steps in Starting a Limited Partnership in Oregon

To form a limited partnership in Oregon, you must consider following the below guidelines that, include research and preparation, establishing the limited partnership structure, drafting the limited partnership agreement, registering the limited partnership, complying with additional Oregon requirements, and ongoing management and compliance and reporting requirements. 

Step 1: Research and Preparation

Before starting a limited partnership in Oregon, you must familiarize yourself with this business structure’s laws and regulations. In the United States, limited partnerships are primarily governed by the Uniform Limited Partnership Act (ULPA). However, each state has its laws and regulations, so it’s essential to know the specific rules that apply in Oregon.

While researching, consider whether a limited partnership is the most suitable structure for your business needs. Limited partnerships are ideal for businesses with one or more passive investors who want to avoid taking on the business’s day-to-day responsibilities. Consider alternative structures like Oregon Corporations if a limited partnership doesn’t seem right.

Step 2: Establishing The Limited Partnership Structure

Once you’ve determined that a limited partnership is the right choice for your business, the next step is to establish the structure of your partnership. This involves choosing a name, hiring a Registered Agent, and determining the roles of the partners.

Choose a Name for the Limited Partnership

The name you choose for your limited partnership is essential to your business identity. In Oregon, there are specific requirements that your limited partnership name must meet, such as including the words “Limited Partnership” or the abbreviation “LP.” Before settling on a name, conduct Oregon Business Name Search through the Oregon Secretary of State Business Name Search to ensure the name you’ve chosen is available and not already used by another business.

Naming requirements for a Limited Partnership in Oregon may include:

  • The name must be unique and distinguishable from other business entities registered in the state.
  • The name must include the words “Limited Partnership,” “L.P.,” or “LP.”
  • Certain words and phrases may be restricted or require additional approval from Oregon.

If the limited partnership 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.

Hire a Registered Agent

A Registered Agent is a person or entity responsible for receiving legal documents and official notices on behalf of your LP. In Oregon, your Registered Agent must:

  • Be a resident of Oregon or a business entity authorized to do business in the state
  • Have a physical address in Oregon (P.O. boxes are not acceptable)

Choosing a reliable and responsible Registered Agent is essential, as failure to receive and respond to legal documents can seriously affect your business. 

You can serve as your own Registered Agent or appoint a friend or family member, or hire a professional Oregon Registered Agent Services. With that, we reviewed some of the best-registered agent services and provided features as an add-on with their formation packages for you to check out.

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Determine the Roles of the Partners

A limited partnership consists of two types of partners: general and limited. General partners are responsible for the day-to-day management of the business and have unlimited liability for the partnership’s debts and obligations. Limited partners, on the other hand, are passive investors who don’t participate in the management of the business and have limited liability up to the amount they’ve invested in the partnership.

As you structure your partnership, carefully consider who will take on the roles of general and limited partners. Remember that general partners will have more responsibility and potential liability, so choose those individuals wisely.

Step 3: Drafting the Limited Partnership Agreement

With the partnership structure established, the next step is to draft a limited partnership agreement. This document sets forth the partnership’s terms and conditions and should be carefully crafted to ensure it meets all legal requirements in Oregon.

Include Essential Elements

A well-drafted limited partnership agreement should include the following essential elements:

  •  Name of the limited partnership
  •  Purpose of the limited partnership
  •  Duration of the limited partnership
  •  Names and addresses of general and limited partners
  •  Capital contributions of each partner
  •  Allocation of profits and losses
  •  Management and decision-making structure
  •  Process for admitting new partners

Address Optional Elements

In addition to the essential elements, it’s a good idea to address the following optional elements in your limited partnership agreement:

  •   Transfer of partnership interests
  •   Withdrawal or removal of partners
  •   Dissolution and winding up the process

To ensure your limited partnership agreement is legally sound and compliant with Oregon laws and regulations, it’s advisable to seek legal advice from a Business Attorney in Oregon with experience in limited partnerships.

Step 4: Registering the Limited Partnership

Once your limited partnership agreement is in place, the next step is to register your limited partnership with the Oregon government. This process typically involves filing a Certificate of Limited Partnership with the Oregon Secretary of State’s office.

Prepare and File the Certificate of Limited Partnership

To file the Certificate of Limited Partnership, complete the required forms, which can typically be found on the Oregon Secretary of State. Include all necessary information and signatures, and pay the filing fee of $100.

Obtain an Employer Identification Number (EIN) from the IRS

After registering your limited partnership with the Oregon government, you’ll need to obtain Oregon Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This number is used to identify your partnership for tax purposes and is required for filing federal and state tax returns.

The application of an EIN 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.

After you have your EIN, you can benefit in several ways. It will give your LLP the absolute advantage necessary to operate at full capacity without encountering legal or judicial issues.

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Register For Oregon Taxes

Depending on your business activities and location, you may need to register for certain Oregon taxes. Check with the Oregon Department of Revenue or a tax professional to determine which taxes apply to your limited partnership.

Step 5: Complying With Additional Oregon Requirements

In addition to registering your limited partnership with the Oregon government, there may be other requirements you need to meet to operate your business legally. These may include obtaining business licenses or permits, filing annual reports with the Oregon Secretary of State, and maintaining proper records and documentation.

Obtain Any Necessary Business Licenses or Permits.

Depending on the nature of your business, you may need to obtain various licenses or permits from state or local authorities. Check with the Oregon Department of Business and Industry or a licensing professional to determine which licenses and permits apply to your limited partnership. However, in Oregon, the costs of Oregon Business Licenses range from $50 – $300.

You can check out the United States Business License & Licensing Fee Resources for more information about the costs in Oregon.

File Annual Reports 

Oregon require limited partnerships to file Annual Reports with the Oregon Secretary of State’s office. These reports typically include updated information about the partnership, such as the names and addresses of partners and any changes to the partnership agreement. 

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Maintain Proper Records and Documentation

As a limited partnership, it’s essential to maintain proper records and documentation, including copies of your limited partnership agreement, tax returns, financial statements, and any other relevant documents. These records should be kept in a safe and accessible location and may be required in the event of an audit or legal dispute.

Step 6: Ongoing Management and Compliance

Starting a limited partnership in Oregon is the beginning. To ensure the ongoing success of your business, it’s crucial to stay on top of management and compliance tasks. It is better to have regular meetings with your partners to ensure everyone is on the same page regarding the direction and performance of your business. These meetings can also help identify and address issues or concerns before they become more significant problems.

As a limited partnership, you must file annual tax returns and pay any required taxes at the federal and state levels. Consult with a tax professional to ensure you comply with all tax laws and deadlines.

Advantages of Limited Partnerships in Oregon

Here are some key advantages of forming a limited partnership in Oregon:

  • Limited Liability for Limited Partners: One of the main benefits of a limited partnership is that limited partners enjoy limited liability protection. This means their assets are generally not at risk for the partnership’s debts and obligations beyond their investment in the partnership. This limited liability can be attractive for investors who want to participate in a business venture without taking on the same level of risk as general partners.
  • Pass-through Taxation: Limited partnerships are typically subject to pass-through taxation, meaning the partnership’s profits and losses flow to the partners’ individual tax returns. This structure avoids double taxation, as the partnership is generally not subject to federal income tax. Instead, each partner is responsible for paying taxes on their share of the partnership’s income at their individual tax rate.
  • Flexibility: A limited partnership allows for flexibility in the management structure. General partners have the authority to make decisions and manage the business, while limited partners can remain passive investors. This division of responsibilities and decision-making power can appeal to both parties. It allows general partners to maintain control over the business operations and limited partners to invest without being involved in day-to-day management.
  • Ease of Formation: A limited partnership is typically less complicated and expensive than a corporation. Limited partnerships generally require filing a Certificate of Limited Partnership with the state and creating a limited partnership agreement, which is less complex than the documentation required for a corporation.
  • Attracting Capital: Limited partnerships can attract capital from investors who want to participate in a business venture without taking on the responsibilities and risks of being a general partner. This structure can help businesses secure funding while allowing limited partners to benefit from the partnership’s profits.
  • Continuity of the Partnership: In Oregon, limited partnerships can continue to exist even if one of the general partners dies, withdraws, or is replaced, as long as there is at least one remaining general partner. This continuity can provide stability and help ensure the ongoing success of the partnership.

Can a Foreign Limited Partnership Do Business in Oregon?

Yes, a foreign Limited Partnership can do business in Oregon by registering as a foreign LP with the Oregon Secretary of State or appropriate state agency. The foreign LP must provide a certificate of good standing from its home state and pay any required registration fees.

What are the Tax Implications of Forming a Limited Partnership in Oregon?

Limited Partnerships are generally considered pass-through entities for tax purposes, meaning that the profits and losses of the business are passed through to the individual partners, who report them on their personal income tax returns. However, specific tax implications may vary depending on the state and the nature of your business. It is recommended to consult with a tax professional to determine your specific tax obligations.

FAQs

What is a limited partnership?
A limited partnership is a type of partnership in which the general partner manages the business and is responsible for its debts and obligations, while limited partners typically only contribute capital and have limited liability.
How do I form a limited partnership in Oregon?
To form a limited partnership in Oregon, you must file a Certificate of Limited Partnership with the Oregon Secretary of State.
What information do I need to include in my Certificate of Limited Partnership in Oregon?
You will need to include the name of your limited partnership, the name and address of the general partner, and the name and address of each limited partner.
How much does it cost to file a Certificate of Limited Partnership in Oregon?
The filing fee for a Certificate of Limited Partnership in Oregon is $100 as of 2021.
Can I file my Certificate of Limited Partnership online in Oregon?
Yes, you can file your Certificate of Limited Partnership online through the Oregon Secretary of State’s website.
How long does it take to process a Certificate of Limited Partnership in Oregon?
It typically takes about 5 business days for the Oregon Secretary of State to process a Certificate of Limited Partnership.
Do I need to have a written partnership agreement for my limited partnership in Oregon?
While not required by law, it is strongly recommended to have a written partnership agreement to avoid any misunderstandings or disputes among partners.
Is there a minimum number of partners required to form a limited partnership in Oregon?
Yes, a limited partnership in Oregon must have at least one general partner and one limited partner.
Can a limited partner in Oregon be held liable for the partnership’s debts and obligations?
No, limited partners in Oregon have limited liability and are not personally liable for the partnership’s debts and obligations beyond their capital contributions.
Can the general partner of a limited partnership in Oregon be an individual or does it have to be a business entity?
The general partner of a limited partnership in Oregon can be either an individual or a business entity.
How often do I need to file an annual report for my limited partnership in Oregon?
Limited partnerships in Oregon are required to file an annual report once a year.
Is there a fee to file an annual report for my limited partnership in Oregon?
Yes, the fee to file an annual report for a limited partnership in Oregon is $100 as of 2021.
Can I dissolve my limited partnership in Oregon at any time?
Yes, a limited partnership in Oregon can be dissolved at any time by a vote of the partners.
What is the tax structure for limited partnerships in Oregon?
Limited partnerships in Oregon are pass-through entities, meaning the partnership itself is not taxed but rather the income and losses are passed through to the individual partners for tax purposes.
How do I obtain a tax identification number for my limited partnership in Oregon?
A tax identification number, also known as an employer identification number (EIN), can be obtained from the Internal Revenue Service (IRS) by filling out and submitting Form SS-4.
Do I need a business license to form a limited partnership in Oregon?
Yes, limited partnerships in Oregon are required to obtain a business license from the Oregon Business Registry.
How do I register my limited partnership with the Oregon Department of Revenue?
Limited partnerships in Oregon can register with the Department of Revenue by submitting Form OR-100 to the Oregon Department of Revenue.
What is a registered agent and do I need one for my limited partnership in Oregon?
A registered agent is a person or business entity designated to receive legal documents on behalf of the partnership. Limited partnerships in Oregon are required to have a registered agent with a physical address in the state.
Can I name my limited partnership anything I want in Oregon?
No, the name of a limited partnership in Oregon must comply with the Oregon Secretary of State’s naming requirements.
What is the abbreviation for limited partnership in Oregon?
The abbreviation for limited partnership in Oregon is LP.
Can a limited partnership in Oregon engage in any type of business activity?
Limited partnerships in Oregon can engage in any legal business activity, as long as it complies with state and federal laws.
What is the difference between a limited partnership and a limited liability partnership in Oregon?
A limited liability partnership (LLP) is similar to a limited partnership except that all partners have limited liability and are not generally held liable for the actions of the partnership or the other partners.
How are profits and losses distributed among partners in a limited partnership in Oregon?
Profit and loss distributions in a limited partnership in Oregon are typically based on the terms outlined in the partnership agreement.
Can a limited partner also be a general partner in Oregon?
No, limited partners in Oregon cannot also be general partners.
Can a limited partnership in Oregon have a board of directors?
Yes, limited partnerships in Oregon can have a board of directors if specified in the partnership agreement.
Can a limited partnership in Oregon be a member of another partnership or entity?
Yes, a limited partnership in Oregon can be a member of other partnerships or entities.
Are limited partnerships in Oregon required to keep any records?
Yes, limited partnerships in Oregon are required to maintain records of financial transactions and other business activities.
Can a limited partnership in Oregon issue stock or sell ownership interests?
No, limited partnerships in Oregon cannot issue stock but can sell ownership interests in the form of partnership interests or units.
What happens if a limited partner dies or withdraws from the partnership in Oregon?
The partnership agreement will typically outline what happens when a limited partner dies or sells their interest in the partnership. Usually, the partnership will either buy back the interest or allow another limited partner to purchase it.
What is a limited partnership in Oregon?
A limited partnership in Oregon is a type of business structure where at least one partner (the general partner) is responsible for managing the business while the other partners (limited partners) provide capital but have less control over the company’s operations.
How do I start a limited partnership in Oregon?
To start a limited partnership in Oregon, you need to file a “Certificate of Limited Partnership” with the Oregon Secretary of State.
What are the requirements for forming a limited partnership in Oregon?
To form a limited partnership in Oregon, you need at least one general partner and one limited partner, and you need to file a Certificate of Limited Partnership with the Oregon Secretary of State.
Is it necessary to have an attorney to start a limited partnership in Oregon?
No, it is not necessary to have an attorney to start a limited partnership in Oregon. However, it can be helpful to consult with an attorney who has experience in business law.
How much does it cost to start a limited partnership in Oregon?
The fee for filing a Certificate of Limited Partnership with the Oregon Secretary of State is $100.
Can I form a limited partnership in Oregon if I am not a resident of the state?
Yes, you can form a limited partnership in Oregon even if you are not a resident of the state.
How long does it take to start a limited partnership in Oregon?
It typically takes around 7-10 business days to process the filing of a Certificate of Limited Partnership with the Oregon Secretary of State.
What is the role of the general partner in a limited partnership in Oregon?
The general partner in a limited partnership in Oregon is responsible for managing the day-to-day activities of the business.
What is the role of the limited partner in a limited partnership in Oregon?
The limited partner in a limited partnership in Oregon primarily provides capital and is not involved in the day-to-day management of the company.
Do I need a business license to start a limited partnership in Oregon?
Yes, you will need to obtain a business license from the Oregon Secretary of State to start a limited partnership in Oregon.
What is the taxation structure for a limited partnership in Oregon?
A limited partnership in Oregon is not taxed at the entity level. Instead, the profits and losses are passed through to the individual partners, who then report this information on their personal tax returns.
How does liability work in a limited partnership in Oregon?
In a limited partnership in Oregon, the general partner is personally liable for any debts or obligations of the partnership while the limited partner’s liability is limited to the amount of their capital contribution.
Are there any annual reports or filings required for a limited partnership in Oregon?
Yes, you will need to file an annual report with the Oregon Secretary of State, which includes information such as the address of the partnership, name and address of each partner and the name and address of all registered agents.
Is there a limit to the number of partners in a limited partnership in Oregon?
No, there is no limit to the number of partners that can be part of a limited partnership in Oregon.
Can I use a PO Box as the address for my limited partnership in Oregon?
No, you cannot use a PO Box as the registered office address for your limited partnership. You must provide a physical address for the office.
Are there any ongoing fees or taxes required for my limited partnership in Oregon?
Yes, you may be required to pay the Oregon excise tax, which is based on your net income, and there may be other local and state business tax obligations.
Can a limited partner in a limited partnership in Oregon be an employee of the business?
No, a limited partner in a limited partnership in Oregon cannot be an employee of the business.
Do I need to obtain any permits or licenses specific to my industry in Oregon to run a limited partnership?
Yes, depending on your industry and location in Oregon, you may need to obtain additional permits or licenses specific to your business.
Can I change the ownership structure of my limited partnership in Oregon?
Yes, you can add or remove partners or change the ownership structure of your partnership when needed.
Can my limited partnership name be different from the names of the partners in Oregon?
Yes, your limited partnership name can be different from the names of the partners in Oregon.
How do I do business under an assumed name as a limited partnership in Oregon?
To do business under an assumed name as a limited partnership in Oregon, you need to register the assumed name with the Oregon Secretary of State.
Are there any restrictions on where I can operate my limited partnership in Oregon?
No, there are no restrictions on where you can operate your limited partnership in Oregon unless there are laws or regulations specific to your industry which may impose additional restrictions.
What is the securities law in Oregon for limited partnerships?
Oregon securities law requires that limited partnerships in Oregon must file a notice of transaction unless the offering falls under specific exemptions by rule or regulation.
Is there mandatory insurance for limited partnerships in Oregon?
No, there is no mandatory insurance for limited partnerships in Oregon, but it’s best to get general liability insurance and personal and property insurance to protect your company from liability.
Do limited partners get a voice in running the business in Oregon?
No, limited partners in a limited partnership in Oregon do not have a voice in running the business, but they have the right to receive a share of the profits from the business.
Are limited partnership agreements mandatory for businesses in Oregon?
Yes, in Oregon, it is mandatory for limited partnerships to have a written partnership agreement before starting operations.
How frequently do I have to hold meetings or record votes as a limited partnership in Oregon?
Limited partnerships in Oregon are not required to hold annual meetings, and partners are not required to record their votes. However, record keeping is still essential for the business, especially for auditing in case of taxation or legal reasons.
Can partners contribute different amounts to the limited partnership funds in Oregon?
Yes, partners can contribute different amounts to the limited partnership funds in Oregon.
What are the implications if a general partner dies, gets insolvent, or goes bankrupt in Oregon?
If a general partner dies, gets insolvent, or goes bankrupt in Oregon, the limited partners may take involved in managing the business but this circumstance needs evaluation of the partnership agreement.
Can a partner take out multiple roles or change their roles in the company in Oregon?
Yes, partners in a limited partnership in Oregon can change their roles in the company if there is mutual agreement, as well as take multiple roles concurrently especially if need arises for fetching maximum benefits.

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Conclusion

Starting a limited partnership in Oregon can be a rewarding experience, providing you with the benefits of limited liability protection for passive investors and the opportunity to manage your business actively. By following the steps outlined in this article and staying on top of ongoing management and compliance tasks, you can establish a successful limited partnership and enjoy the benefits of this unique business structure.

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