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Oregon Business License Basics

Oregon Business License Basics

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Oregon Business License Basics

Starting a small business in Oregon often means registering with several federal, state, and local agencies. Let’s review common Oregon business license registrations so your business starts off right.

Related: Guide to starting a business in Oregon

Setting Up the Business

Before you can apply for business licenses, you should first establish the business structure. This decision impacts your legal responsibilities, taxes, and how much personal liability you might face. Here’s a brief explanation of each type of structure:

Sole proprietorship: This is the simplest form of business structure, where one person owns and runs everything. There’s no separation between the owner and the business, meaning the owner is personally responsible for all debts and legal actions against the business. Taxes are straightforward as the owner reports business income on their personal tax return.

General partnership: Similar to a sole proprietorship, but with two or more people running the business. Partners share profits and losses, and like sole proprietors, they are personally responsible for the business’s debts and legal issues. Partnerships also don’t pay taxes as a separate entity; instead, each partner includes their share of profits or losses in their personal tax filings.

Corporation: A corporation is a more complex entity that is separate from its owners, providing personal liability protection. Owners, known as shareholders, are not personally responsible for the corporation’s debts or legal problems. Corporations can raise money by selling stock and are taxed separately from their owners. This entity requires more requirements, like having board meetings and record-keeping.

Limited Liability Company (LLC): An LLC blends elements of sole proprietorships, partnerships, and corporations. Owners (members) have limited personal liability for business debts and actions. Like sole proprietorships and partnerships, an LLC can pass income directly to owners to avoid double taxation, a common issue with corporations. This structure offers flexibility in management and less strict requirements than a corporation.

Related: Comparison of Business Structures

What Licenses Do Oregon Businesses Need?

With the business structure out of the way, we can begin looking at the different types of registrations businesses in Oregon may need. There isn’t a standard business license, as requirements vary depending on where the business is located and what it does. Here is a general overview of the different registrations your business may need.

Oregon Business Registry

Even though the state of Oregon doesn’t have a general business license, corporations, Limited Liability Companies, and sole proprietors or general partnerships operating under an Assumed Name must sign up for the Oregon Business Registry through the Oregon Secretary of State website.

General Business License

In addition to the Oregon Business Registry, which most businesses will register for, many cities also require businesses to be licensed in order to operate. Rules for business registration vary depending on location and the business’s activities. Below are a few cities that have licensing requirements. 

Portland: All businesses doing business in Portland must register for the City of Portland’s Business License Tax and the Multnomah County Business Income Tax.

Doing business is defined as:

  • Your business has a retail location in Portland
  • Your business performs services in Portland and/or Multnomah County
  • Your business maintains a stock of goods in city limits
  • Your business has residential or commercial rental property in Portland and/or Multnomah County
  • You are self-employed and work in Portland and/or Multnomah County

There is no cost to register for the business license, however, taxes will be collected annually.

Eugene: Only a few types of businesses will need to register with the City of Eugene.  They include payday lenders, public passenger vehicle companies, and tobacco retailers.

Salem:business license in Salem is needed for businesses such as vehicle transportation companies like taxis, limos, Uber, etc., tree trimmers, second-hand dealers, and a few others. 

Gresham: All businesses operating in the City limits of Gresham need a business license.  This includes commercial businesses, home-based businesses, and independent contractors.  Business registration is required for any company operating within the corporate limits of the city.  Additionally, certain businesses such as billiard halls, food service establishments, tattoo artists, ice cream trucks, and more have to register with the Office of the City Clerk.  

Hillsboro: The City of Hillsboro requires all businesses to be licensed in order to operate in the City. 

Take the guesswork out of figuring out what licenses and permits are required to start your business with license research packages from Bizee and LegalZoom.

For as little as $99, you can save a lot of time and know your business is in compliance with local, state, and federal requirements. 

Assumed Name Registration

While not a business license, it’s common for sole Proprietorships and partnerships in Oregon that will operate the business under a name that is different from the full name of the owner(s) to register for an Assumed Name (also known as a Doing Business As or DBA) with the Oregon Secretary of State’s Office.

Building & Zoning Permits

Zoning Permit: In Oregon, zoning permits are issued by local governments to ensure businesses operate in appropriately zoned areas. The permitting process involves reviewing the proposed business use and location for compliance with the local zoning ordinance. Zoning requirements vary between cities and counties, so many businesses should consult their local planning department for specific requirements and procedures.

Building Permit: Oregon requires building permits for new constructions, expansions, or major renovations to ensure compliance with safety and construction standards. Business owners must apply at their local building department, where plans are reviewed for adherence to state and local building codes.

Signage Permit: In Oregon, businesses require sign permits to install exterior signage. Local governments regulate the size, location, and design of signs through their sign ordinances. Sign permit applications are typically submitted to the local building department or planning department, depending on the jurisdiction.

Professional License

A variety of professions in the state are regulated and need to be registered before offering certain services.  A few common professions that require licensing in Oregon include; food-related businesses, accountants, electricians, barbers, and many more.   Additional information, fees, and Oregon licensing requirements for professions are available from the Oregon Department of Consumer & Business Services.

Employer Identification Number (EIN)

Many businesses will register with the Internal Revenue Service (IRS) for an EIN (also referred to as a FEIN, Federal Employer Identification Number, or Federal Tax ID Number). The EIN is the business equivalent of a Social Security Number for an individual. Corporations, Limited Liability Companies, partnerships, and sole proprietorships with employees will all need to register for one. Sole Proprietorships without employees can use the owner’s Social Security Number.

Learn how to apply for an EIN

Next Steps

These are some of the most common business licenses a new business in Oregon will need to register for. While it’s a good start, there are so many different licenses that may be needed, be sure to double-check with the City Clerk’s Office, Chamber of Commerce, and/or Economic Development office in your area before opening your doors.

Author

  • Greg Bouhl

    With over two decades as an entrepreneur, educator, and business advisor, Greg Bouhl has worked with over 2,000 entrepreneurs to help them start and grow their businesses. Fed up with clients finding and acting on inaccurate and outdated information online, Greg launched StartUp101.com to be a trusted resource for people starting a business.

Oregon Business License Basics

Oregon Business License Basics

2 Responses

  1. We own a Short Term Rental home that’s set up as a LLC in Manzanita Oregon. On 8/01/2023 the city is increasing the business license fee to $850 annually. It is currently $250 annually. Any other type of business in Manzanita pays $125 annual business license fee.
    Is the a limitation in Oregon as to how much a business license can increase annually?

    1. Hi Joel – Sorry to hear this. That’s a huge jump and unfortunately, the city can set the rates to whatever they feel is appropriate. Your best best is to gather other business owners and speak up at the next city council meeting, in addition to getting some public support by getting the story out to the local publications. You may also want to reach out to the Chamber of Commerce and maybe even a local attorney to also help push the issue.

      I hope you are able to get this reduced!

      Breg

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