Oregon Business Corporation Act: Everything You Need to Know
The Oregon Business Corporation Act includes laws and regulations for corporations doing business in the state of Oregon. 3 min read
Benefits of a Corporation
The Oregon Business Corporation Act includes laws and regulations for corporations doing business in the state of Oregon. By forming a corporation, the owner's personal assets aren't at risk for legal or financial issues relating to the business. Corporations also provide a measure of credibility with vendors and other companies with which they do business.
Additional benefits of a corporation include:
- Greater appeal to investors
- Additional tax benefits and savings
State Corporation Laws Overview
The laws of the state of Oregon regulate how any business entity may be structured and established. Entities include corporations, partnerships, sole proprietorships, and limited liability companies (LLCs). The different entities have different laws that govern them. Many of the differences are around tax obligations and personal liability for business finances.
Oregon Corporation Law
Under the Oregon Private Corporations law, domestic corporations are clearly defined. This law doesn't include foreign corporations, which are incorporated for profit under state laws. If one or more persons ages 18 years or older come together, they may serve as the incorporators of a corporation under the laws of Oregon. In order to form a corporation, the owners must file the Articles of Incorporation with the appropriate governmental office. This applies to both domestic and foreign corporations that wish to operate in the state.
Corporations registered and established in Oregon have the right and liberty to engage in any business that is within the limits of the laws. However, if the Articles of Incorporation outline a more specific, limited business purpose, the corporation must stick to what is described. All corporations are legally required to maintain a registered agent and registered office within the state. However, the office that is registered doesn't have to be the place of business.
By default, a corporation has perpetual duration, as well as the succession of its name, unless the Articles of Incorporation specify an end date. Corporations operating in Oregon have the same rights and powers as individuals to take part in any actions necessary to carry out the functions of the business.
The name of a corporation is required to include any of the following words (or acceptable abbreviations):
Corporations may not include any language that implies that the organization exists for any purpose except for what is outlined in the Articles of Incorporation. As soon as the Articles of Incorporation have been filed with the Oregon Secretary of State, the corporation's legal existence begins. Upon completing the process of incorporating, the directors of the corporation must hold a meeting to finalize the corporation's organization. This meeting should include the adoption of bylaws, the appointment of officers, and engaging in any other necessary business activity.
A corporation's bylaws can include provisions for regulating its affairs and managing the business operations. However, anything outlined in the bylaws must be consistent with what is included in the Articles of Incorporation. The corporation's board of directors have authority to manage and operate the business. The Articles of Incorporation should include any limitations on that authority. The bylaws or Articles of Incorporation may also include any qualifications required of directors.
Unless the bylaws or Articles of Incorporation specify otherwise, the directors are not required to live in the state of Oregon or serve as shareholders of the corporation. The bylaws or Articles of Incorporation may also include a fixed or specified number of individuals on the board of directors. However, should the number of members of the board of directors need to increase or decrease, the bylaws or Articles of Incorporation should specify the manner in which the number can be amended.
The number and classes of shares should be clearly outlined and described in the Articles of Incorporation. This section should also include how the corporation is authorized to issue shares. If the corporation has more than one class, the Articles of Incorporation should include the appropriate designation that distinguishes each class.
When structuring stock, the corporation must follow these rules:
- The total number of authorized stock shares should be stated in the Articles of Incorporation.
- In the case of multiple share classes, the Articles of Incorporation should include the number of shares authorized per class, along with a designation that distinguishes each class. Before the corporation can issue any shares, the articles must include the relative rights, limitations, and preferences for its class.
If you need help with the Oregon Business Corporation Act, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.