Benefits of a Corporation
Forming a corporation helps ensure that your personal assets will not be at risk if your business faces a lawsuit or cannot meet its financial obligations. It also gives you credibility with the other companies with which you do business. Other benefits of a corporation may be additional tax savings and greater appeal to outside investors.
Requirements for Incorporating in Oregon
Preparing Your Articles of Incorporation
An Oregon corporation is formed by filing articles of incorporation with the Secretary of State and paying a filing fee. The corporation’s existence begins as soon as you file the articles, unless the articles specify a later date. The articles of incorporation may contain many provisions, but they must contain the following:
- Name of the corporation
- Stock structure
- Names and addresses of incorporators
- Registered agent and registered office
- Mailing address to which notices can be mailed until the corporation designates an address in its annual report
A corporation can offer different types of stock, called classes or series. These classes can offer different rights to their shareholders, for example some classes of stock may offer voting rights while others do not.
Regarding stock structure, the follow applies:
- The articles of incorporation must state the total number of authorized shares of stock.
- If more than one class of shares is authorized, the articles must state the number of authorized shares in each class and must prescribe a distinguishing designation for each class. Before any shares of a class are issued, the articles must state the preferences, limitations and relative rights of that class.
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Naming Your Corporation
Before incorporating your business, you can check to see if the corporate name you want is available by searching the Secretary of State’s business registry database.
You can reserve a name for 120 days by filing an application with the Oregon Secretary of State.
In Oregon, your corporation’s name must meet the following requirements:
- It must contain the words “corporation,” “incorporated,” “company” or “limited,” or an abbreviation of one of those words.
- It cannot contain the word “cooperative.”
- A new corporation’s name must be distinguishable from other business names registered with the Secretary of State.
An incorporator signs the articles of incorporation and delivers them to the Secretary of State for filing. The following requirements apply when specifying incorporators:
- Incorporators’ names and addresses must be listed in the articles of incorporation.
- Your corporation may have one or more incorporators.
- An incorporator may be an individual aged 18 or older, a corporation, a partnership or an association.
- If the articles of incorporation do not name initial directors, the incorporators must elect directors. Incorporators may also approve bylaws. Once the directors have been chosen, the incorporators have no further duties.
Stating a Corporate Purpose
Every Oregon corporation has the purpose of engaging in any lawful business. It is not necessary to state any additional purpose in the articles of incorporation.
Corporate directors oversee major policies and decisions of the corporation and appoint officers who manage the corporation’s day-to-day affairs. You must adhere to the following requirements when specifying directors:
- One or more individuals may comprise the board of directors. There is no limit on the number of directors a corporation can have, but the number of directors should be stated in either the articles of incorporation or the bylaws.
- The only eligibility requirement for directors is that the estate of an incompetent or deceased person cannot be a director. The articles of incorporation or bylaws may establish additional eligibility requirements.
Specifying a Registered Agent and Registered Office
Every corporation must maintain a registered office in Oregon and a registered agent at that office. A registered agent receives lawsuits, notices and demands on behalf of the corporation and forwards them to the corporation.
You must adhere to the following requirements when specifying your registered agent and registered office:
- The articles of incorporation must list the street address in Oregon of the registered office and the name of the registered agent. The registered agent’s business address must be identical to the registered office address.
- The registered office may be the corporation’s place of business.
- The registered agent may be an individual who resides in Oregon or a corporation, professional corporation, limited liability company or nonprofit corporation that was formed in or is authorized to do business in Oregon.
Determining Incorporation Bylaws
Bylaws are a document that governs the way a corporation will operate and can contain any provision relating to managing the business and regulating the affairs of the corporation. They typically outline rules for such provisions as selection of directors and officers and voting rights of shareholders. Bylaws are not filed with the Secretary of State.
The following requirements pertain when determining bylaws in Oregon:
- The board of directors or incorporators must adopt bylaws.
- Bylaws cannot include anything that is inconsistent with the law or the articles of incorporation.
Costs of Incorporating in Oregon
The Oregon Secretary of State requires a fee when filing articles of incorporation or reserving a corporation name. Corporations are also required to pay state and federal income taxes.