Indemnification

Avoid or Reduce Liability or Risk

Indemnification is a way to provide limited liability protection to the people whose role is to actively manage, operate or oversee a company.  

A structure such as a corporation or limited ​liability company provides the shareholders or owners with limited liability protection from debts that exceed their investment in the company. 

Because those limited liability protections may not auto​matically extend to people filling the roles of directors, officers, managers or employees, many companies choose to adopt an indemnification provision in the articles of incorporation or articles of organization as a way to shield them from liability. In many cases, the shareholders or owners are filling these roles and may benefit from the additional protections that an indemnification provision provides.  

Get Professional Advice 

The Secretary of State recommends consulting an attorney for legal advice when setting up a new company or looking at options to protect your business from risk and liability.

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Indemnification Provisions

Oregon law allows some companies to include an indemni​fication provision in their articles of incorporation or articles of organization.

Examples

Business Corporation
The Corporation elects to indemnify its Direct​​ors, Officers, Employees and Agents for liability and related expenses under ORS 60.387 to 60.414​.

Limited Liability Company
The Company elects to indemnify its Memb​er​s, Managers, Employees and Agents for liability and related expenses under ORS 63.160 to 63.170.

Nonprofit Corporation 
The Corporation elects to in​demnify its Directors, Officers, Employees and Agents for liability and related expenses under ORS 65.387 to 65.414​.