Here’s an overview of the key steps you’ll need to take to start your own business in Oregon.
The most common legal structures for a small business are:
There also are special versions of some of these structures, such as limited partnerships and S corporations. You’ll want to consider which business entity structure offers the type of liability protection you want and the best tax, financing, and financial benefits for you and your business. Check Choose Your Business Structure on Nolo’s website for more information on how to choose the best ownership structure for your business.
For LLCs and corporations, you will need to check that your name is distinguishable from the names of other business entities already on file with the Oregon Secretary of State (SOS). You can check for available names by doing a business name search on the SOS website. There are certain name requirements for LLCs and corporations (like including a word such as “LLC” for LLCs or “Company” for corporations). See How to Form an LLC in Oregonand How to Form a Corporation in Oregon for more information.
Sole proprietorships and partnerships in Oregon must file an assumed name with the Oregon SOS if they use a business name that is different from the name of the business owner (for a sole proprietorship) or individual partners (for a partnership). To file, you can use the SOS’s Oregon Business Registry.
If you plan on doing business online, you may want to register your business name as a domain name. See Choose and Register a Domain Name for more information. In addition, to avoid trademark infringement issues, you should do a federal and state trademark check to make sure the name you want to use is not the same as or too similar to a name already in use. See How to Do a Trademark Search for more information.
Tax Registration. If you will have employees in Oregon, you must register with the Department of Revenue (DOR) for a state payroll account in relation to paying employer withholding tax. You can register online through theOregon Business Registry.
EIN. If your business has employees or is taxed separately from you, you must obtain a federal Employer Identification Number (EIN) from the IRS. Even if you are not required to obtain an EIN, there are often business reasons for doing so. Banks often require an EIN to open an account in the business’s name and other companies you do business with may require an EIN to process payments. You can get an EIN by completing an online application on the IRS website. There is no filing fee.
Regulatory licenses and permits. These cover areas such as:
For regulatory licenses and permits issued by the state, check the SOS’s searchable online license directory which covers well over a thousand licenses. In addition, the SOS’s Business Wizard can help you determine which licenses are necessary for your specific business. For information about local licenses and permits, check the websites for any cities or counties where you will do business.
Professional and occupational licenses. These cover people who work in various fields. Apart from the sites mentioned just above for regulatory licenses, you can also check the Licenses section of the oregon.gov website for certain information regarding professional licensing.
You’ll need to pick a location for your business and check local zoning regulations. That includes if you work from home. You may be able to find zoning regulations for your town or city by checking municode.com.
Oregon taxes every kind of business. See Oregon State Business Income Tax for more information on state business taxes in Oregon.
Sole proprietorships. Pay state taxes on business income as part of their personal state income tax returns (Form 40).
Partnerships. Partners pay state taxes on partnership income on personal tax returns. In addition, Oregon partnerships also must file Form 65, Oregon Return of Income and usually will owe a minimum $150 excise tax.
LLCs. Members pay state taxes on their share of LLC income on personal tax returns. In addition most LLCs themselves have to file an additional state tax form. The specific form used will depend on how the LLC is classified for federal tax purposes. The LLC also must file an annual report with the Oregon SOS. See Oregon LLC Annual Report and Tax Requirements for more information.
Corporations. Shareholders must pay states taxes on their dividends from the corporation. A shareholder-employee with a salary also must pay state income tax on his or her personal state tax return. Moreover, the corporation itself is subject to Oregon corporation taxes. Finally, corporations must file an annual report with the Oregon SOS.
If you have employees, you must also deal with state employer taxes.
And, apart from Oregon taxes, there are always federal income and employer taxes. Check IRS Publications 334,Tax Guide for Small Business, and 583, Taxpayers Starting a Business, available at irs.gov.
Insurance is a good idea for most kinds of business. While insurance often is regulated at the state level, the types of business insurance available are usually similar across the fifty states. Check Obtaining Business Insurance for more information.