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.
| Registration 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
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| 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 |
1Assumed 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).
2Governing documents are internal to the business, they are not filed with the Corporation Division.
3Limited liability protection may be forfeited by the courts in cases of fraud or misconduct.
4Charities (public benefit nonprofit corporations) must have at least three directors.
5Additional business, payroll and property taxes may also apply
Any time a person or persons carries on, conducts or transacts business in the state of Oregon and does not conspicuously disclose their real and true name in the title of the business, they must file an assumed business name.
A corporation is a legal entity created under Oregon law by filing articles of incorporation with the Oregon Corporation Division. A corporation acts as a single entity. It exists separately from its owners. As a separate entity, the corporation must file its own tax returns. It can own property, sue and be sued.
A limited liability company is an unincorporated association having one or more members. It can be managed by members or managers. Managers can be members, though they are not required to be members.
A non-profit corporation is formed for any lawful purpose but not for financial profit.
A foreign corporation is a legal entity created in a jurisdiction other than Oregon. This can be another state or country. In order for a foreign corporation to transact business in Oregon, it must get authority from the Oregon Corporation Division by submitting an application form, fee and an original certificate of existence (or similar document) or the registration number from the jurisdiction where their articles of incorporation are filed.
A foreign limited liability company is a legal entity created in a jurisdiction other than Oregon. This can be another state or country. In order for a foreign limited liability company to transact business in Oregon, it must get authority from the Oregon Corporation Division by submitting an application form, fee and an original certificate of existence (or similar document) or the registration number from the jurisdiction where their articles of incorporation are filed.
Entity Types Not Eligible to Register Online
A Limited partnership is a partnership formed by two or more persons and has one or more general partners and one or more limited partners. The general partners control the business and are liable for debts and obligations of the partnership. A limited partner is similar to a shareholder in a corporation because that person's liability generally is limited to the amount of contribution to the partnership.
A professional corporation is a for-profit corporation formed for the purpose of providing one or more specific types of professional service and all the shareholders of the corporation must be licensed to render one of the professional services.
Foreign entities are entities that were filed in jurisdictions other than Oregon. This can be another state or country. In order for a foreign entity to transact business in Oregon, it must get authority from Business Registry by submitting an application form, fee and an original certificate of existence (or similar document) or the registration number from the jurisdiction of filing.
A general partnership is an association of two or more persons doing business. All partners are personally liable for the obligations of the partnership. An assumed business name may be required if the business name does not contain the legal name of each of the owners.
A sole proprietorship is the simplest form of business where one individual conducts the business and is personally liable for all the obligations of the business. An assumed business name may be required if the business name does not contain the legal name of each of the owners.