How to Start a Construction Company in Oregon | Essential Guide

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Oregon Construction Company

Starting a construction company in Oregon can be lucrative and rewarding for anyone with the right skills, resources, and determination. With a strong demand for quality construction services and a consistently growing population of 4,359,110 (2024 data), there is always room for new Limited Liability Companies to thrive in this industry. However, starting a construction company is a challenging task and requires careful planning, dedication, and hard work.

In this article, Webinarcare Editorial Team will discuss the necessary steps to Start a Construction Company in Oregon and provide valuable tips for ensuring your success in this competitive industry.

How to Start a Construction Company in Oregon

What is a Construction Company?

A construction company in Oregon is a business that specializes in the planning, design, and execution of construction projects. These projects can range from residential homes to commercial buildings and infrastructure projects such as roads, bridges, and utility systems. Oregon construction companies must adhere to local building codes, regulations, and licensing requirements to ensure their projects are safe, efficient, and compliant with state standards.

Oregon construction companies often offer various services, including general contracting, design-build, and specialized construction services. They collaborate with various stakeholders, such as architects, engineers, developers, and property owners, to bring projects to life. By employing skilled tradespeople, project managers, and other professionals, construction companies in Oregon work to deliver high-quality, durable structures that meet their client’s needs and contribute to their community’s development and growth.

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

– WEBINARCARE EDITORIAL TEAM

How to Start a Construction Company in Oregon

To launch a construction business, you must follow the guidelines that include researching the construction industry, developing a business plan, registering your business, securing funding, purchasing equipment and material, hiring a skilled team, and marketing your construction company.

Step 1: Research the Construction Industry

Before diving into starting your construction company, it’s essential to understand the local construction industry in Oregon. Research your area’s market trends, major players, and potential competition. This will help you identify gaps in the market that your company can fill and allow you to make informed decisions about the types of services you want to offer.

Some key areas to research include:

  • Types of construction projects in demand (residential, commercial, etc.)
  • The average cost of construction projects in your area
  • Local building codes and regulations
  • Key stakeholders in the industry (architects, developers, etc.)
  • Licensing and certification requirements for contractors in Oregon

Step 2: Develop a Business Plan

A well-thought-out business plan is crucial for the success of any new business, including a construction company. Your business plan will act as a roadmap for your company’s growth and development, helping you make informed decisions and keep your business on track.

Some key elements to include in your construction company business plan are:

  • Company Overview: Describe your company’s mission, vision, and goals. Include the legal structure of your business (LLC, corporation, sole proprietorship, etc.) and your company’s name and location.
  • Market Analysis: Summarize your research on the local construction industry, including the target market, competition, and growth opportunities.
  • Services Offered: Clearly define the types of construction services your company will offer, such as general contracting, design-build, or specialized construction services.
  • Marketing and Sales Strategy: Outline how to attract and retain clients and your strategies for generating leads and closing sales.
  • Management and Organization: Detail the roles and responsibilities of your management team and any key personnel you plan to hire.
  • Financial Projections: Provide a realistic estimate of your company’s financial performance over the next few years, including projected income, expenses, and profits.

Step 3: Choose a Business Name

Selecting a name for your Oregon construction company is essential to forming. Your business name should be unique, memorable, and reflective of your products or services. There is a complete guide on Oregon Business Name Search for you to have a proper Oregon construction business name. 

In Oregon, if you do not wish to file your construction business company right away but want to hold the name that you have decided on, then you can reserve your Oregon construction business name for 120 days. You must file a name reservation application with the Oregon Secretary of State to keep the name. 

You can register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for Oregon DBA (doing business as). In this manner, you can choose any name you desire for your business. A DBA allows a company to operate under the name of the person or entity who owns it. If you have decided to file for a DBA, you can file it in three methods, online, by mail, and in person filing.

However, before filing a DBA, you should know that you need to renew your DBA every two years, which costs $50.

You can check the availability of your desired business name by searching the Oregon Secretary of State Business Name Search‘s website.

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Step 4: Register Your Construction Company

Register your business with the appropriate government agencies before officially starting your construction company in Oregon and obtain any necessary licenses and permits. 

Hire a Registered Agent

A Registered Agent is a person or entity responsible for receiving legal documents and official notices for your construction business. The qualifications of a Registered Agent vary depending on the jurisdiction, but generally, they must meet the following criteria:

  • Age: The Registered Agent must be at least 18 years old.
  • Residency: The Registered Agent must reside where the company is registered or authorized to do business in that state. In some jurisdictions, a domestic corporation or limited liability company (LLC) can act as its Registered Agent if it has a physical address in Oregon.
  • Physical Address: The Registered Agent must have a physical street address, not just a post office box, where the company is registered. This is where they will receive official correspondence and legal documents on behalf of the company.
  • Availability: The Registered Agent must be available during normal business hours (9 a.m. to 5 p.m., Monday through Friday) to receive and sign official correspondence and legal documents.
  • Good Standing: If the Registered Agent is a business entity, it must be in good standing with the state and not be in default, suspended, or revoked.
  • Compliance: The Registered Agent should know Oregon requirements and deadlines for the company, such as Annual Reports and Oregon franchise tax filings, and ensure that the company stays compliant. 

You can serve as your Registered Agent, appoint a friend or family member, or hire a Professional Oregon Registered Agent Services.

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File For Articles of Organization or Articles of Incorporation

If you form an LLC for your construction company, you must file the Oregon Articles of Organization, which costs $100. However, you must file the Articles of Incorporation if you form Oregon Corporation for your construction company. The Articles of Incorporation filing fee costs $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

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Create an Operating Agreement

Operating Agreement is a document that contains all of your company’s organizational details. Drafting an operating agreement in Oregon is optional. Yet, having one as an internal document is strongly advised. 

Recommended: Creating an Operating Agreement is like having a personal legal guide at hand; it’s efficient, thorough, and ensures the smooth and compliant operation of your business. With LegalZoom’s operating agreement, it will protect your rights as an owner, keeping misunderstandings at bay and your business on the path to success. That’s why we recommend using –

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Obtain an Employer Identification Number

You must first obtain Oregon Employer identification number (EIN) from the IRS if you will open a bank account or hire an employee for your Oregon construction company. 

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 the 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.

Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –

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Step 5: Obtain the Necessary Licenses and Permits

Starting a construction company in Oregon requires several licenses and permits. Some of the most common licenses and permits you’ll need include the following:

  • Business License: Your local city or county government may require Oregon Business License. The business license fee in Oregon ranges from $50 – $300.
  • Contractor’s License: A contractor’s license is required in most states for construction businesses that perform specific types of work, such as general contracting, electrical, plumbing, HVAC, or other specialized trades. Requirements for obtaining a contractor’s license may include passing an exam, providing proof of experience, and obtaining bonding and insurance.
  • Building Permits: Construction projects typically require permits issued by the Oregon building department. Building permits ensure the construction project complies with local building codes and regulations.
  • Occupational Licenses: Some states may require occupational licenses for specific types of work, such as asbestos abatement, lead paint removal, or the installation of fire protection systems. Check with your state’s licensing board to determine if any special licenses are required for the work your construction company will perform.
  • Oregon Sales Tax Permit: A sales tax permit from the Oregon Department of Revenue allows you to collect sales tax. Currently, the Oregon sales tax rate is 0% since Oregon has no sales tax.
  • Environmental Permits: Depending on the nature of your construction projects, you may need to obtain environmental permits, such as stormwater discharge or air quality permits.

Step 6: Secure Funding

Starting a construction company requires significant capital to cover equipment, materials, and labor costs. To secure funding for your Oregon business, you must explore various financing options and determine the best fit for your needs.

When seeking funding, be prepared to present your business plan and financial projections to potential lenders or investors. This will demonstrate your commitment to your company’s success and help build their confidence in your ability to repay the loan or generate a return on their investment.

However, consider applying for your construction company’s Oregon Small Business Loans.

Step 7: Purchase Equipment and Materials

Once you have secured funding for your Oregon construction company, you must purchase the necessary equipment and materials to begin operations. This may include items such as:

  • Construction vehicles (trucks, excavators, etc.)
  • Power tools and hand tools
  • Safety equipment (hard hats, safety goggles, etc.)
  • Building materials (lumber, concrete, etc.)
  • Office equipment and supplies (computers, printers, etc.)

Invest in high-quality equipment and materials, as this will help you deliver exceptional results to your clients and build a strong reputation in the industry. Consider purchasing insurance for your equipment, as this can help protect your investment in the case of theft, damage, or accidents.

Step 8: Hire a Skilled Team

Your Oregon construction company’s success will largely depend on your team’s skills and expertise. Hire individuals with experience and knowledge in the construction industry to build a strong workforce. This may include:

  • Project managers
  • Construction laborers
  • Skilled tradespeople (electricians, plumbers, etc.)
  • Architects or engineers
  • Administrative staff (accountants, receptionists, etc.)

In addition to hiring qualified employees, invest in ongoing training and development programs to help your team stay current on industry trends, technologies, and best practices. This will improve the quality of your services and help you attract and retain top talent in the competitive construction industry.

Step 9: Market Your Construction Company

You must develop a comprehensive marketing strategy to attract clients and grow your Oregon construction company. This may include building a professional website that showcases your services, portfolio, and testimonials from satisfied clients; creating and distributing print materials, such as brochures, business cards, and direct mail advertisements; networking with industry professionals, such as architects, developers, and real estate agents, to generate leads and referrals, and utilizing social media and digital marketing strategies to reach a wider audience and drive traffic to your website.

By consistently promoting your Oregon construction company and showcasing your expertise and quality work, you can build a strong reputation in the Oregon construction industry and attract a steady stream of new clients.

Benefits of Forming a Construction Company

Forming a Construction LLC is best for a start-up company since it offers the following advantages.

Limited Liability Protection

LLC provides limited liability protection to its owners, also known as members. This means that the personal assets of the LLC members are separate from the company’s debts and liabilities. In the construction industry, where accidents, property damage, and contractual disputes occur, limited liability protection is crucial to protect business owners’ assets.

Pass-through Taxation

An LLC typically offers pass-through taxation, meaning the company’s profits and losses are reported on the owner’s tax returns. This avoids the double taxation corporations may face, where the company and its shareholders are taxed separately. Pass-through taxation can lead to potential tax savings for the Oregon construction company’s owners.

Flexibility in Management

LLCs have a more flexible management structure than corporations. They do not require a board of directors, and the owners can choose how to manage the company through member or manager management. This flexibility allows Oregon construction companies to adapt their management structure as needed.

Simpler Record-Keeping and Compliance

LLCs still require formalities; they typically have fewer record-keeping and reporting requirements than corporations. This can save time and resources for Oregon construction companies, allowing them to focus on their core business operations.

Credibility

Forming an LLC can provide the Oregon construction company with increased credibility and professionalism in the eyes of clients, vendors, and financial institutions. This can be beneficial in securing contracts and building a positive reputation in the industry.

FAQs

What are the legal requirements to start a construction company in Oregon?
You must register your company with the Oregon Construction Contractors Board and obtain a contractor’s license.
How do I apply for a contractor’s license in Oregon?
The application process includes passing a qualifying test, providing proof of insurance and work experience, and paying a fee.
What type of insurance is required for a construction company in Oregon?
Liability insurance and worker’s compensation insurance are usually required.
Is there a minimum score requirement for the qualifying test in Oregon?
Yes, you must achieve a minimum score of 70%.
How long does it take to obtain a contractor’s license in Oregon?
It typically takes several weeks to a few months to complete the process.
Are there any restrictions on operating a construction company in certain parts of Oregon?
Yes, some cities and counties may have their own regulations and zoning requirements that you must follow.
How much does it cost to start a construction company in Oregon?
The cost of starting a construction company varies depending on the scale and location of your business.
Are there any educational qualifications required for starting a construction company in Oregon?
No, formal education is not a requirement to start a construction company in Oregon.
What are the advantages of starting a construction company in Oregon?
Oregon is known for its booming construction industry, tax incentives, and business-friendly climate.
Is it necessary to have a business plan to start a construction company in Oregon?
Yes, having a solid business plan is crucial to secure funding and set goals.
Can I operate a construction company from home in Oregon?
Yes, it is feasible to run a construction company from home if you have the necessary permits and licenses.
What is the tax structure for construction companies in Oregon?
The corporate tax rate in Oregon is around 6.6%, and the state does not have a sales tax.
What are the most popular construction projects in Oregon?
Commercial construction, residential remodeling, and infrastructure development are some popular construction projects in Oregon.
How do I build my client base as a new construction company in Oregon?
Network with real estate agents, contractors, and local businesses, and utilize social media to promote your services.
What equipment will I need to start a construction company in Oregon?
The necessary equipment will depend on the type of construction work you will be doing.
Can I subcontract work to other construction companies in Oregon?
Yes, subcontracting work is a common practice in the construction industry.
How do I find appropriate suppliers for my construction company in Oregon?
You can search for suppliers through local directories and business associations.
What are the occupational safety regulations in Oregon?
Oregon Occupational Safety and Health Administration (OSHA) enforces regulations to promote safety in workplaces.
How do I stay up-to-date with construction regulations in Oregon?
Stay informed by subscribing to industry newsletters, attending seminars, and joining professional organizations.
Are there any financing options available for starting a construction company in Oregon?
The Small Business Administration (SBA) and local lenders offer financing options, including loans and grants.
Can a foreign national start a construction company in Oregon?
Yes, a foreign national can start a construction company in Oregon if they meet the legal requirements.
How much experience do I need in the construction industry to start a company in Oregon?
Contractors typically need at two years of full-time work experience to apply for a license in Oregon.
Do I need to incorporate my construction company in Oregon?
It is not necessary to incorporate your construction company in Oregon, but there may be benefits to doing so, such as personal asset protection.
Do I need to renew my contractor’s license in Oregon?
Yes, licenses must be renewed every two years in Oregon, including completion of continuing education requirements.
How do I secure financing for my construction company?
You can consider loans, grants, and crowdfunding.
Can I use a registered agent for my construction company in Oregon?
Yes, you can use a registered agent if you are not located in Oregon.
Can I use my construction company license in other states besides Oregon?
No, the Oregon Contractor’s License is only valid in Oregon.
What are the steps to starting a construction company in Oregon?
Research industry and legal requirements, create a solid business plan, obtain financing, obtain necessary permits and licenses, and begin building your clientele.
What are the requirements for obtaining a contractor’s license in Oregon?
To obtain a contractor’s license in Oregon, you must be at least 18 years old, have a qualifying individual to serve as a qualifier, and pass the required exams.
How do I register my construction company in Oregon?
To register your construction company in Oregon, you will need to submit an application to the Business Registry of the Oregon Secretary of State.
What is the difference between a contractor and a subcontractor in Oregon?
A contractor is responsible for overseeing and managing a construction project from start to finish, while a subcontractor is hired by a contractor to perform specific tasks within the project.
How do I find construction bids in Oregon?
Construction bids in Oregon can be found by checking online postings, subscribing to trade publications, and networking with other industry professionals.
What are the tax implications for starting a construction company in Oregon?
It is important to consult with a financial professional to understand the tax implications of starting a construction company in Oregon, including payroll taxes, sales taxes, and business taxes.
How do I obtain a building permit in Oregon?
Building permits in Oregon are obtained from the local governing authority, such as a city or county government. The process may include submitting plans, obtaining inspections, and paying fees.
What type of insurance is required for my construction company in Oregon?
Construction companies in Oregon are required to carry general liability insurance, workers’ compensation insurance, and automobile insurance.
How can I prepare for the Oregon contractor license exams?
To prepare for the Oregon contractor license exams, study the state laws and regulations regarding building code and construction safety, and seek out educational courses or study materials specific to your trade.
Is there a minimum net worth requirement to start a construction company in Oregon?
There is no minimum net worth requirement to start a construction company in Oregon, but it is important to have adequate working capital and financial planning in place.
Can I get help from the state government to start my construction company in Oregon?
The state government of Oregon offers assistance through programs such as the Small Business Development Center and the Governor’s Office of Small Business Assistance.
What is the prevailing wage in Oregon for construction work?
The prevailing wage for construction work in Oregon varies based on the region and type of work performed. Consult the Bureau of Labor and Industries for more information.
Are there any advantages to being a minority or woman-owned construction business in Oregon?
Minority and woman-owned construction businesses in Oregon may be eligible for certain small business grants and loans, as well as preferences in state contracts through the Minority Business Enterprise and Women’s Business Enterprise programs.
What is the contracting authority in Oregon?
The contracting authority in Oregon is the Construction Contractors Board, which oversees licensing and disciplinary actions for all contractors in the state.
Are there any mentorship programs available for new construction company owners in Oregon?
The Oregon Association of Minority Entrepreneurs offers a mentorship program for minority business owners, and SCORE offers mentorship and workshops for small business owners in general.
How do I protect against claims of construction defects in Oregon?
To protect against claims of construction defects, it is important to work with experienced professionals, follow building codes and regulations, and carry adequate insurance coverage.
Is there a minimum amount of experience required to become a contractor in Oregon?
There is no set amount of experience required to become a contractor in Oregon, but it is important to have a thorough understanding of the skills and knowledge needed to be successful in your trade.
How do I handle construction waste disposal in Oregon?
Construction waste disposal in Oregon must comply with state and local regulations. It is important to properly sort and dispose of waste materials, including potentially hazardous materials.
What is the Oregon Construction Contractors Board bond?
The Oregon Construction Contractors Board bond is a bond required for licensed contractors that serves as financial protection for their clients and helps ensure payment for any work done.
Is there a limit on how much a construction company can bid on public contracts in Oregon?
There is no set limit on how much a construction company can bid on public contracts in Oregon, but there may be certain regulations and requirements depending on the project.
What kind of permits do I need for excavation work in Oregon?
Excavation work in Oregon may require permits for activities such as drainage, open excavation, and rock blasting. Consult with the local governing authority for specific requirements.
What are the penalties for construction code violations in Oregon?
Penalties for construction code violations in Oregon may include fines, license revocation or suspension, and legal action from affected parties.
Do I need to have a certified payroll system for my construction company in Oregon?
Construction companies in Oregon that work on certain public works projects may be required to use a certified payroll system to ensure compliance with prevailing wage regulations.
How do I choose the right construction specialty for my company in Oregon?
The right construction specialty for your company in Oregon depends on various factors such as skills, experience, demand, and competition. Consult with industry professionals and conduct market research before making a decision.
What kind of safety training is required for construction workers in Oregon?
Construction workers in Oregon must undergo training on safety topics such as hazard recognition, fall protection, and electrical safety.
How long does it take to get a contractor’s license in Oregon?
Obtaining a contractor’s license in Oregon may take several months, depending on the necessary education, experience, and examination requirements.
Are there any tax incentives for hiring apprentices in Oregon construction?
Employers who hire and train apprentices in Oregon construction programs may be eligible for certain tax credits and incentives.
Can I use an out-of-state license to work as a contractor in Oregon?
Out-of-state contractors may be able to obtain a reciprocal license in Oregon if they meet certain criteria, such as having a similar license in their home state and the necessary education and experience.
What are the popular construction projects in Oregon?
The popular construction projects in Oregon are infrastructure projects such as bridges, water treatment facilities and damns or also roads and apartments or commercial buildings, which includes restaurants, storefront retail buildings, and office buildings.

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Conclusion

Starting a construction company in Oregon can be challenging yet rewarding for those prepared to invest the time, effort, and resources necessary for success. By following the steps outlined in this article and dedicating yourself to providing exceptional service and quality work, you can create a thriving construction business that stands out in the competitive Oregon market.

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