Launching a business in Oregon involves more than just having a great idea – it also requires completing specific legal and administrative tasks to officially set up the business.
Many first-time business owners find themselves uncertain about the registration process, wondering which forms they need and where to submit them. This practical guide breaks down the Oregon business registration procedure into clear, manageable steps. We’ll provide you with the information you need to select your business structure, secure required licenses, and complete the necessary paperwork, allowing you to establish your company confidently.
Related: Starting A Business In Oregon Checklist
Step 1: Business Structure
The first step in registering a business in Oregon is selecting a business structure, which is also called a business entity. A business structure is how a company is legally organized to operate. The most common types of business structures in Oregon are sole proprietorships, general partnerships, corporations, and Limited Liability Companies (LLCs).
Related: Comparison of Business Structures
A sole proprietorship is an unincorporated business owned and run by one person, and it’s the simplest and a very common form of business entity. The owner has complete control over the business, receives all profits, and is responsible for all debts and liabilities. Pros include ease of formation, minimal paperwork, and simple tax filing. Cons involve unlimited personal liability, which means your personal assets may be at risk, and there are fewer options for startup funding.
Related: How to start a sole proprietorship in Oregon
A general partnership is a business owned by two or more people. In this structure, two or more individuals own and operate the business together. Each partner shares in the profits, losses, and management responsibilities, and they are all personally liable for the business’s debts and obligations. Pros include ease of formation, shared management, and relatively simple tax filing. Cons include unlimited personal liability for each partner, potential conflicts in decision-making, and challenges in raising capital.
A corporation is a separate legal entity from its owners (shareholders), which means the owners are not generally personally liable for the business’s debts and obligations. There are two main types of corporations: C corporation and S corporation, and the primary difference lies in the tax treatment. Pros include limited liability for shareholders, easier access to capital through stock issuance, and greater credibility with customers and suppliers. Cons involve more complex formation, extensive record-keeping, and potential double taxation (in the case of C corporations).
Related: How to form an Oregon Corporation
A Limited Liability Company is a hybrid business entity that combines the features of a corporation and a sole proprietorship or partnership. It offers personal liability protection for the owners and the ability to choose how the business is taxed. Pros include limited liability, tax flexibility (LLCs can choose to be taxed as a sole proprietorship, partnership, or corporation), and fewer formalities compared to corporations. Cons involve more complex formation than sole proprietorships or general partnerships.
Related: How to Form an Oregon LLC
When choosing a business structure, it’s important to consider your personal liability, taxes, and management structure. Each business entity has its unique pros and cons, and it’s important to weigh these factors carefully before deciding. For example, sole proprietorships and partnerships are easy and inexpensive to set up, but they offer little liability protection for the owners. Corporations and LLCs offer greater liability protection but are more complex and expensive to establish. By understanding the unique features of each business entity, you can choose the one best suited for your specific needs and goals.
Step 2: Business Name
After selecting a business structure, many entrepreneurs in Oregon need to choose and register a business name. This process varies depending on the type of business entity. Let’s start with sole proprietorships and general partnerships:
For sole proprietors and general partnerships in Oregon, using your legal name as your business name doesn’t require additional registration. For instance, John Smith can operate his computer repair business under “John Smith” without registering a separate business name.
However, if you want to use a name different from your legal name, you’ll need to register an Oregon Assumed Business Name (ABN), also known as a “Doing Business As” (DBA) name. For example, if John wants to call his business “John’s Computer Repair,” he must register this name.
Corporations and Limited Liability Companies (LLCs) in Oregon typically don’t need to register for an Assumed Business Name (ABN) since they create a unique entity name during the formation process. However, some may choose to register an assumed name if they want to operate under an additional business or brand name alongside their legal entity name. This approach allows multiple businesses to operate under the liability protection of a single Oregon corporation or LLC without forming separate entities.
To register an ABN in Oregon:
- Check name availability by searching the Oregon Secretary of State’s business name registry to ensure your desired name isn’t already in use. A name is considered unique if it’s not an exact copy of an existing registered name. Small differences like word order, added numbers or creative spelling could make a name distinct.
- Once you’ve confirmed your name is available, you can proceed with the Assumed Business Name registration process through the Oregon Secretary of State’s office.
Step 3: Federal Employer Identification Number
After choosing a business structure and registering a business name, many Oregon businesses need to obtain a Federal Employer Identification Number (FEIN), also known as an Employer Identification Number (EIN). This unique nine-digit number is issued by the Internal Revenue Service (IRS) to identify businesses for tax purposes.
You need an EIN if:
- Your business has employees
- Your business is structured as a corporation, partnership, or multi-member LLC
While sole proprietorships and single-member LLCs without employees can use the owner’s Social Security Number for tax purposes, they may still opt to get an EIN. This can be beneficial for avoiding the use of the owner’s Social Security Number on business documents.
Obtaining an EIN is a straightforward process:
- Apply online through the IRS website. This method is quick and provides your EIN immediately upon completion.
- Alternatively, you can apply by mail or fax using Form SS-4, though this takes longer to process.
The application is free and typically takes only a few minutes to complete online. You’ll need to provide basic information about your business, such as its legal name, address, and type of business entity.
Step 4: Industry Licensing
Several professions and industries in Oregon require specific licenses before practitioners can offer services, and the Oregon Department of Consumer & Business Services oversees most professional licensing. Some commonly licensed professions include:
- Accountants (Oregon Board of Accountancy)
- Electricians (Building Codes Division)
- Barbers and cosmetologists (Oregon Board of Cosmetology)
- Real estate agents (Oregon Real Estate Agency)
- Contractors (Construction Contractors Board)
In addition to general business registration, some industries in Oregon require specific state or federal licenses. Common examples include:
- Health care providers (Oregon Health Authority)
- Childcare facilities (Oregon Early Learning Division)
- Transportation services (Oregon Department of Transportation)
- Marijuana businesses (Oregon Liquor and Cannabis Commission)
Each profession and industry has its own licensing requirements, fees, and renewal processes. For detailed information on specific professions, visit the Oregon.gov Business Xpress License Directory.
Step 5: Oregon Business Registry
The Oregon Business Registry is the state’s official database for almost all businesses operating in the state. Managed by the Oregon Secretary of State’s office, it serves as a central place for businesses to register with the state, file required documents, and maintain their good standing with the state. This system streamlines the process of creating and managing a business in Oregon, providing a single point of contact for various business filings and public record searches.
Who needs to register:
- Corporations (domestic and foreign)
- Limited Liability Companies (LLCs)
- Limited Partnerships (LPs)
- Limited Liability Partnerships (LLPs)
- Nonprofit organizations
- Sole proprietorships and general partnerships using an assumed business name
Businesses that don’t need to register include:
- Sole proprietorships operating under the owner’s legal name
- General partnerships using only the partners’ legal names
Where to register: You can register your business through the Oregon Secretary of State website.
Step 6: Business Tax Registration
Another common state registration for businesses in Oregon is with the Department of Revenue. This process helps you register for state taxes and comply with Oregon’s tax requirements. Not all businesses need to register, but you must if your business:
- Employs workers
- Operates as a corporation, partnership, or LLC
- Needs to pay specific taxes like those for certain products or services (such as lodging providers or marijuana retailers)
Registering takes place on the Oregon Department of Revenue website. After registration, you’ll receive a unique Business Identification Number (BIN) from the state.
Corporate Activity Tax (CAT): In addition to other business taxes, Oregon implements a Corporate Activity Tax (CAT). This is a tax on business activities within the state and applies to all entity types, not just corporations. Businesses with commercial activity in Oregon exceeding $750,000 per year must register for the CAT. The tax is calculated based on a business’s commercial activity after subtractions, with the first $1 million exempt from the tax.
Step 7: Local Business Licenses
The state of Oregon doesn’t have a general state business license requirement, however, many Oregon cities and counties require local business licenses. Here are some common types of local licenses:
- General Business License: This basic license allows a business to operate within city limits. It’s typically issued by a city’s finance or revenue department. For example, the City of Portland requires most businesses to obtain a general business license from its Revenue Division.
- Food Service License: Restaurants, food carts, and other food-related businesses often need a local health permit, which county health departments typically issue. For instance, Multnomah County Health Department issues food handler cards and food service licenses for Portland businesses.
- Contractor License: Many cities require contractors to obtain a local license in addition to state registration. These are usually handled by a city’s building or development services department. The City of Eugene, for example, requires contractors to register with its Building and Permit Services Division.
- Alcohol License: Businesses selling alcohol often need a local license in addition to state permits. These are typically issued by a city’s police department or a dedicated liquor control board. For instance, the City of Salem requires businesses selling alcohol to obtain a liquor license recommendation from its Police Department before applying for a state license.
Licensing requirements vary significantly between cities and counties in Oregon. Check with your local government offices for specific requirements in your area.
Step 8: Local Building & Zoning Permits
Before finalizing a property purchase or lease for your business, it’s important to understand Oregon’s building and zoning requirements. These regulations ensure businesses operate in appropriate locations and meet safety standards. Here’s what you need to know:
Zoning Regulations: Zoning laws dictate where different types of businesses can operate within a city or county. Before establishing your business location, check with your local planning or development department to confirm your intended use aligns with zoning rules.
Building Permits: If you plan to construct a new building or modify an existing one for your business, you’ll likely need building permits to meet local building codes and safety standards.
Certificate of Occupancy: Many Oregon municipalities require a Certificate of Occupancy before a business can begin operations in a building. You typically obtain this from your local building department after passing final inspections.
Home-Based Businesses: If you’re planning to run a business from home, be aware that some Oregon cities have specific rules for home-based businesses. Check with your local planning department for details. For example, the City of Beaverton requires home-based businesses to obtain a Home Occupation License from its Finance Department.
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