Starting a Business in Oregon: Everything You Need to Know
Are you starting a business in Oregon? In this article, we will discuss the various steps involved.3 min read
2. Choosing a Legal Structure
3. Naming Your Business
4. Creating Your Business Entity
5. Permits and Licenses
6. Reporting and Taxes
7. Obtaining Permits and Licenses
8. Other Steps
Are you starting a business in Oregon? In this article, we will discuss the various steps involved. They include planning, choosing a legal structure, giving your business a name, the permits you require, financing, and marketing your new business.
Planning Your Business Idea
A successful business depends on a good and thorough business plan. A business plan is necessary for funding, money flow, and management. To form one, you need to research, plan and prepare. For personalized help, contact the Small Business Development Center in your area.
Choosing a Legal Structure
These are the most common legal structures for small businesses in Oregon:
- Sole proprietorship
- Limited liability company (LLC)
As a start-up business owner, you will need to decide which legal structure will be best for your business requirements.
A limited liability company (LLC) is the most common legal structure chosen by entrepreneurs as it provides the benefits of a corporation without including the negatives. Forming a corporation is helpful if your goal is to raise external capital or take your company public. Compare the differences and benefits of LLCs vs corporations.
Naming Your Business
Choose a name that distinguishes your business from other business names filed with the Oregon Secretary of State (SOS). Search available names on the SOS website. Check the naming requirements associated with your chosen legal structure. A domain name is necessary if you are doing business online.
Additionally, run a federal and state trademark test to avoid trademark infringement issues.
Creating Your Business Entity
- Sole proprietorship: No organizational forms need filing with the State.
- Partnership: No organizational forms need filing with the State.
- LLC: File an Article of Organization form with the Oregon SOS. A registered agent must be appointed for service of process.
- Corporation: File an Article of Incorporation with the Oregon SOS. A registered agent must be appointed for service of process.
Permits and Licenses
- Tax registration. All employees require registration for state payroll with the Department of Revenue.
- Business permits. Register permits online through the Oregon Business Registry.
- Employer Identification Number. This number is necessary when your business is taxed separately or if you have employees. Fill yours in on the IRS website.
Reporting and Taxes
Tax applies to all types of businesses in Oregon.
- Sole proprietorship: State tax is paid on business income on the owner's personal state income tax return
- Partnership: State tax must be paid by partners on their personal state income tax return. Form 65 Oregon Return of Income form is to be filed. There is usually a minimum of $150 excise tax charged.
- LLC: State tax on a member's share of the income needs to be added to their personal tax returns. An annual report must be filed with the Oregon SOS. Most LLCs also have to file a state tax form. The specific form required depends on the classification of the LLC.
- Corporation: Shareholders must pay state tax on their dividends earned from the corporation. All shareholder-employees earning a salary need to pay state income tax on their personal state tax return. The corporation itself will fall within the Oregon corporation tax laws. Corporations must also file an annual report to the Oregon SOS. Employee tax should also be considered. Employer taxes and federal income are over and above Oregon taxes. Take a look at irs.gov at IRS Publications 334, 583, and Tax Guide for Small Business for guidance.
Obtaining Permits and Licenses
Unless your business is 100-percent online, there will be some license or permit required in order for you to do business in Oregon. Either search the Oregon Business Xpress License directory for steps to get started or hire a business license service.
- Open a business bank account. Compare local and national banks to see what features they offer.
- Choose a business location. Where will you run your business? Check local zoning regulations for your business location, even if it is home-based.
- Finance your business. Investigate organizations who are willing to lend you capital.
- Obtain insurance. Insurance is always advised for a new business.
- Build a business website. A business needs an effective website. Look for an affordable, easy to use, and require no tech-skills platform.
- Begin marketing. Network marketing in Oregon gets excellent results. Find a personal way to stand out from a social media marketing perspective.
Take a look at the Oregon Business Resource page for more information regarding state programs available to small business.
If you need help with starting a business in Oregon, 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.