Forming an Oregon LLC or Corporation
While there are several types of business entities, the most common entities are limited liability companies (LLCs) and corporations. Businesses use the entity formation process for the simple reason that it works as a protective mechanism against uncertainty. By formalizing an entity structure, you are shielding you and your business against lawsuits and associated damages, and depending on the circumstances, you may be reducing your overall tax liabilities, too.
Are you uncertain as to what type of entity structure you should set up for maximum benefit? Looking for additional information about corporations and what you’ll have to do to maintain these protective structures?
Yellow Dog Legal can help guide you through the business formation process from beginning to end.
Why Form a Corporate Entity?
By default, solo-owned businesses are defined as “sole proprietorships.” The sole proprietorship form is ultimately personal in nature — in legal terms, the business is to some extent an extension of one’s own person. What this means is that the debts and liabilities of the business are linked to the owner. This can be a bit confusing, so let’s clarify with a quick example.
Suppose that you own a mom n’ pop pet food shop. One day, a customer slips and falls, injuring themselves. They sue you for damages. As the store is a sole proprietorship, you can be held personally liable. If necessary, your own insurance (and/or your own assets) will have to be used to pay out compensation to the injured customer. This is not an altogether unlikely scenario. Businesses are often denied coverage (due to various coverage exceptions) by their insurers, and the business might not have sufficient assets to pay out the damages sought by the plaintiff.
This is where entity formation plays an important role.
If you had restructured your business as a corporation or an LLC, you would have legally separated yourself from the business to the degree that an injured customer (or perhaps an angry employee or contractual partner) could not hold you personally liable for whatever damages they seek.
The Business Formation Process
- Yellow Dog Legal will gather information during the initial consultation. Founding attorney Nicole Schaefer will take the time to discuss your business and gain insight into your expectations and concerns going forward.
- Nicole will prepare and review the documents with you. The prepared documentation will necessarily differ depending on the type of entity that you’re forming.
- Nicole will file the completed documents with the Oregon Secretary of State.
- Once the state approves the relevant documentation, Nicole will send those documents over to you in a single electronic document (PDF). If preferred, you can request that the documents be sent in an e-folder with each file separated.
Maintenance is Critical
Merely forming a corporate entity is not enough. However you’ve restructured your business, that entity structure will have certain legal requirements to ensure that it is actually valid and will shield you from liability. For example, if you restructure your retail store as a type of corporation, then you will have to hold board meetings on a regular basis and keep minutes. You will also have to keep your personal funds separate from corporate funds. If the two become commingled, then a plaintiff could ultimately sue you personally on the basis that the corporate structure was not properly maintained.
This litigation strategy is known as “piercing the corporate veil,” and is rather common, as many corporations are formed simply to confuse the public and are not legitimate and separate entities in their own right.
Yellow Dog Legal is committed to providing entity formation services that don’t just end with the act of formation. We encourage clients to maintain the business structure through regular compliance efforts.
Entity Formation Packages
$450 + Filing Fee (usually $100)
- Registering your business with the Secretary of State
- Preparing and filing Articles of Organization or Incorporation
- Obtaining an EIN Number for your business.
For an additional $750.00
- Single member operating agreement or bylaws
- Basic trademark business name search
- Business name search for trademarking
- For an additional $125, get a beautiful Corporate kit.
In some cases, clients may require ongoing business attorney services, such as routine business audits — which may or may not be related to entity formation concerns (i.e., maintenance and renewal, compliance). To better serve these clients, Yellow Dog Legal has created subscription packages so as to make continuous, reliable legal assistance more accessible to small businesses.
The team here at Yellow Dog Legal encourages you to explore our subscription packages to find the one that suits your business needs best!
Contact Yellow Dog Legal for Help
Ready to speak to an experienced business attorney about restructuring your business? Call Yellow Dog Legal at 971-350-8516 or complete an intake form online to schedule a consultation.
Nicole is committed to working closely with clients to ensure that she has the details and insight necessary to provide tailored legal representation. This is particularly valuable in the context of entity formation where the circumstances must be comprehensively evaluated to determine the most favorable structure for the business going forward.