The process to form an Oregon startup depends on which type of business you're forming.
Before starting a business, it's important to look at each of the main business
types—assumed business name, corporation, limited liability company, etc.—to
determine which factors are most important to you and your own unique circumstance.
Oregon Assumed Business Name
An Oregon assumed business
name is a type of business that does not create a separate legal entity;
the assumed business name is simply that: a business name assumed by an individual
for use in the state.
Known as a DBA or Fictitious Name in other locations, an Oregon assumed business
name is referred to as an assumed business name (ABN or DBA) and can be registered
by a legal person or business in the state. If an individual applies for an assumed
business name, this is what is known as a
Incorporate in Oregon
in Oregon will create a separate business entity from its owners, which
can exist in perpetuity and pass on to new owners upon the original owner's death
Corporations must maintain a
registered agent on file with the state. This registered agent must have
a physical address in Oregon; PO boxes or mail center addresses are not valid registered
agent addresses. Registered agents should be available during normal business hours
to receive service of process on behalf of the corporation.
For-profit corporations will choose one of two tax classifications at the federal
level: C corporation, or S corporation.
Upon filing Articles of Incorporation, a
C corporation is formed. This type of corporation provides great structural
flexibility, allowing for any number of shareholders of any type (individuals, both
US citizens and non-citizens, and corporate entities), but it has a higher tax responsibility.
To form an
S corporation, a business will incorporate with the state, and then submit
an S Corporation Election Form to the IRS. Upon acceptance, this filing enables
the corporation to have a lighter tax burden, but it is limited to 100 shareholders,
all of whom must be US citizens or legal aliens.
Oregon Foreign Corporation
Before transacting business in Oregon, a
foreign corporation registration is required; this is done by submitting
an Application for Authority to Transact Business, along with a Certificate of Good
Standing from the original state of registration (dated within 60 days of registration),
to the Oregon Secretary of State's office.
There are some exceptions to this requirement. While the state is not responsible
for determining whether a business is considered to be "transacting business," they
do include a list of activities that, on their own, are not considered to
be transacting business. This list includes:
Maintaining a bank account
Holding shareholder meetings
Maintaining or defending legal proceedings
Selling through independent contractors
The state can provide an expanded (though not exhaustive) list of business activities
not considered to be "transacting business," but it is best to check with your lawyer
or tax advisor if you are unsure whether your business is required to register as
an Oregon foreign corporation.
An Oregon LLC can
be registered with the Secretary of State, but note that "LLC" is not accepted by
the IRS as a tax classification. Rather, your LLC will select a tax classification
for federal use. Available tax classifications will depend on whether you are a
single-owner LLC or a multiple-owner LLC.
Oregon LLCs are registered by filing Articles of Organization with the Secretary
of State's office. Like corporations, an LLC is required to have a registered agent
on file who resides in the state and can accept service of process on the business's
Oregon Nonprofit Corporation
Forming a 501c3
nonprofit corporation is a process with two main steps.
First, you must register as an Oregon nonprofit corporation by filing nonprofit
Articles of Incorporation with the state.
Then, you must apply for 501c3 tax exempt status from the IRS, something only granted
to nonprofits with specific business purposes (such as religious, charitable, scientific,
It is important to recognize that only when your application has been accepted by
the IRS is your organization legally able to accept tax-deductible donations, enjoy
reduced postage, and take advantage of other federal benefits afforded to a 501c3
nonprofit organization. Before this application is approved, the organization is
strictly an Oregon nonprofit corporation and cannot act as if it were a 501c3 organization.