How to Form an Oregon Corporation

A C corporation is treated as a separate taxable entity, meaning it pays taxes on its profits before any dividends are distributed to shareholders. Those dividends are then taxed again on individual returns, resulting in double taxation. However, C corporations have no limits on the number or type of shareholders, making them ideal for larger or growing businesses.

An S corporation is a federal tax status that allows profits and losses to pass directly to shareholders, avoiding double taxation. To qualify, your business must meet certain federal rules:

• An S corp can have no more than 100 shareholders.
• There can be only one class of stock.
• All shareholders must be U.S. citizens or residents.
• There can be no corporate or partnership shareholders.
• Form 2553 must be filed with the IRS within 75 days of incorporation.

What should I do after I form an Oregon corporation?

Successfully incorporating your Oregon corporation is just the beginning. You must complete several important steps to make sure your corporation is properly established and compliant.

Obtain an EIN and fulfill tax requirements

Once your corporation is formed, your next step is to get a federal employer identification number (EIN) from the IRS. You can apply online at irs.gov or use an EIN service like LegalZoom. You’ll need this number to file federal tax returns based on your corporation’s chosen tax status.

At the state level, you’ll need to register with the Oregon Department of Revenue for state income tax and sales tax if applicable, and set up unemployment insurance if you plan to hire employees.

Draft bylaws and hold the first board meeting

Your corporation must have bylaws—the internal rules that guide how your business operates. They must follow Oregon law and usually explain things like how directors and officers are chosen, how meetings are held, and how voting works.

 After drafting your bylaws, your first board meeting should be held to adopt them officially. During this meeting, directors will elect officers, authorize issuing stock, adopt a corporate seal, open business bank accounts, set the fiscal year, and decide whether to elect S corporation tax status.

You can draft your own bylaws or use a template, but it’s wise to draft bylaws with the help of an attorney or professional service. At the very least, you should have your DIY bylaws reviewed by a business attorney for completeness and compliance with Oregon law.

Issuing shares and maintaining a stock ledger

After your first board meeting, your corporation must issue shares to its initial shareholders as stated in the articles of incorporation. You’ll need to keep a stock ledger, which records important shareholder information such as names, addresses, the number of shares owned, issuance dates, and any payments or property exchanged for shares.

The ledger should also track any share transfers and the dates they occur. Whether you provide physical stock certificates or keep digital records, all share activity must comply with federal and state securities laws.

Open a business bank account

To separate your business finances from your personal funds, open a corporate bank account in your company’s name. Banks typically require several documents, including a certified copy of your articles of incorporation, your corporate bylaws, your EIN confirmation letter, a board resolution authorizing the account, and identification for those authorized to sign.

Always keep business funds in this account, record every transaction carefully, and avoid mixing personal and company money. It’s also a good idea to get a business credit card to handle company expenses and build corporate credit.

Register for licenses, permits, and taxes

There is no statewide, general Oregon business license, but many businesses will need industry-specific licenses. For example, certain professions—like law, medicine, and accounting—require professional licenses from the appropriate state licensing board.

Most cities and counties also require local business licenses. You should also check with your city or county government for general license requirements as well as zoning clearances, building permits, or health department requirements.

Maintain ongoing compliance

Oregon corporations must meet several ongoing compliance requirements to maintain good standing and preserve limited liability protection:

• Annual report: Your annual report is due by the anniversary of your business's original filing. The fee is $100 and you can file it online through the Oregon Business Registry portal. If you don’t file within 45 days of the due date, you can lose the ability to conduct business in Oregon.
• Registered agent: You must maintain a registered agent continuously as long as your corporation conducts business in Oregon. If you need to change your registered agent or office, file a Statement of Change with the Secretary of State.
• Recordkeeping: Oregon corporations must keep organized records, including articles, bylaws, meeting minutes, stock records, and financial documents. You must hold annual shareholder meetings, record major decisions, and store records at your main office. 

How LegalZoom can help you form an Oregon corporation

LegalZoom makes it easy to start and manage your Oregon corporation. You can search for an available business name, file your incorporation paperwork, and get your EIN—all in one place. We can also provide registered agent services, help you file annual reports, and offer ongoing compliance support so your corporation stays in good standing with the state.

FAQs 

Can I file my Oregon articles of incorporation online?

Yes, Oregon offers online filing through the Oregon Business Registry and allows you to pay by credit card. You can track your filing status online so you know when it’s approved.

What if my desired corporate name is already taken?

If your desired corporate name is already taken in Oregon, you still have a few options. You can choose a different name that meets the state’s naming rules, or reach out to the current name holder to ask if they’re willing to release it. Another option is to add unique or distinguishing words to make your name different enough to qualify.

Do I need a lawyer to form an Oregon corporation?

While not legally required, consulting with an Oregon business attorney can be beneficial, especially for complex situations. Consider legal assistance if you have multiple shareholders, complex ownership structures, or specific regulatory requirements.

Can a non-U.S. citizen form an Oregon corporation?

Yes, non-U.S. citizens can form Oregon corporations. However, they must use a registered agent with an Oregon address and may face restrictions if they later elect S corporation tax status, which requires all shareholders to be U.S. citizens or residents.

What's the difference between authorized and issued shares?

Authorized shares are the maximum number of shares your corporation can issue, as stated in the articles of incorporation. Issued shares are the actual number of shares distributed to shareholders. You can issue up to the authorized amount without amending your articles.

Do I need to hold annual meetings for my Oregon corporation?

Yes, Oregon corporations must hold annual shareholder meetings unless the articles of incorporation or bylaws provide otherwise. Board meetings should be held regularly as specified in your bylaws. All meetings should be properly documented with written minutes.

Can my Oregon corporation do business in other states?

Yes, but you'll need to register as a foreign corporation in each state where you conduct business. This typically involves filing an application for authority to transact business and appointing a registered agent in each state.

Jane Haskins, Esq., contributed to this article.