​​​​​​​​​​​​​​​​There are many factors to consider when choosing the best structure of business ownership. Your choice ​impacts multiple aspects of your business, including taxes, liability, ownership succession, and others. Consult legal counsel and an accountant before deciding the type of business entity to form. See “How to Choose a Business Structure” in the Oregon Start a Business Guide.

​​​​	​Sole Proprietor	General Partnership	​​Limited Liability Company	​Business Corporation	​Nonprofit Corporation
Registra​tion Required¹	​Not required, except for Assumed Business Name	Not required, except for Assumed Business Name	Yes, File Articles of Organization & annual reports	​Yes, File Articles of Incorporation & annual reports	Yes, File Articles of Incorporation & ​annual reports​
Governing Document²	A business plan is recommended	Partnership agreement	​Operating agreement	Bylaws​	Bylaws​​​​
Ownership	​One owner	Two or more partners (owners)	One or more members (owners)	​One or more shareholders (owners)	No owners. Assets must be given to another nonprofit upon dissolution​
Liability³	Unlimited personal liability for debts of the business and yourself	Unlimited personal liability for debts of the business including your partners actions	​Members (owners) have limited liability for debts of the LLC	Shareholder liability limited to loss of their paid-​in investment ​	Operators are not personally liable for debts of the ​business
Management Control⁴	​Owner makes decisions	Partner control and decision making responsibility set out in partnership agreement	Member managed, or owners may appoint a manager per the Articles of Organization	​Shareholders elect directors to oversee policies and appoint officers	May have members who may elect directors; Must have directors to oversee policies and appoint ​officers
Taxation⁵	Owner reports and pays taxes on personal tax return	Each partner reports and pays share of taxes, on personal tax returns	Choose to be taxed as a partnership or a corporation for income. Single member LLCs may report and pay taxes on personal income tax return.	Corporation pays taxes on income; shareholders pay taxes on dividends​	Nonprofit pays taxes on income, unless tax exempt
​¹ Assumed business name registration required when owner’s "real and true" name is not part of the business name (Note: corporation and limited liability company name is the “real and true” name). ​² Governing documents are internal to the business, they are not filed with the Corporation Division. ³ Limited liability protection ma​y be forfeited by the courts in cases of fraud or misconduct. ⁴ Charities (public benefit nonprofit corporations) must have at least three directors. ⁵ Additional business, payroll and property taxes may also apply

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Entity Types Not Eligible to Register Online

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