Starting a Professional Corporation in Oregon 2024: Ultimate Guide

Licensed professional? Level up your business with Oregon professional corporation! Enjoy unique benefits like Oregon LLC, such as limited liability, tax perks, and a polished image. Our step-by-step guide unravels the essentials for smooth compliance and the right fit. LLCBase has your back with expert guidance, so make an informed decision and triumph in Oregon with your professional corporation today!

This guide will review the requirements for starting a professional corporation in Oregon, explore the advantages and disadvantages of this business structure, and help you determine if it is the right fit for your business goals.

What is a Professional Corporation

A Professional Corporation (P.C.) is a unique type of corporation designed for licensed professionals, such as doctors, dentists, lawyers, architects, and accountants. Forming a P.C. allows licensed professionals to offer their services through a corporate structure, providing them with the benefits of a traditional corporation, such as limited liability protection and tax advantages. Forming a professional corporation in Oregon is a popular choice due to the thriving professional landscape and business-friendly environment. When starting a professional corporation, choose a reliable formation service in Oregon.

The primary purpose of Oregon Professional Corporation is to protect its owners from personal liability for the corporation’s actions. The shareholders’ personal assets are protected if the professional corporation faces legal issues. Moreover, Oregon professional corporations can offer certain tax benefits, such as deducting employee benefits and operating expenses. These advantages make forming a professional corporation an attractive option for many professionals in Oregon.

Recommended: Hire a formation service to make your dream a reality! Choose the best for a seamless professional corporation setup in Oregon. We recommend –

Our #1 Pick: LegalZoom – ($0 + State Fees) Online LLC Setup

Who Can File Under Professional Corporation Laws

Under Oregon Professional Corporation laws, only certain licensed professionals are eligible to form a professional corporation. The specific professions allowed to form a P.C. may vary slightly by state, but in Oregon, the following professionals can typically form a professional corporation:

Each profession has its governing licensing board, which sets specific rules and regulations for forming and operating a professional corporation. It is essential to check with the relevant board and state laws to ensure that your profession is eligible to form a professional corporation and to understand the specific requirements associated with your profession.

Launching a professional corporation in Oregon? Get in touch with the best LLC formation services in Oregon for expert guidance and support tailored to your unique venture. Let their skilled assistance pave the way for seamlessly setting up your professional corporation, so you can focus on growing your business!

LLC Services	Rating & Pricing	Top Features	Learn More
#1 Editor's Choice	5/5 $0 + State Filing Fee	Free LLC Formation Various Legal Services Attorney Advice	Learn More
	3/5 $299 + State Filing Fee	Single Package Flat Pricing Legal Services	Learn More

Structure of a Professional Corporation

• Shareholders: Oregon Professional Corporation’s shareholders must be licensed professionals in the same field as the corporation’s purpose. For example, if a professional corporation is formed to offer legal services, all shareholders must be licensed attorneys. This requirement ensures that the professional corporation’s management comprises qualified individuals with relevant expertise.
• Directors: The directors of a professional corporation in Oregon are responsible for overseeing the corporation’s operations and making high-level decisions. The directors must also be licensed professionals in the same field as the corporation’s purpose. The number of directors required depends on the specific licensing board’s regulations, but typically a minimum of one director is needed.
• Officers: The officers of Oregon Professional Corporation manage the professional corporation. Officers typically include a President, Secretary, and Treasurer. However, additional officers can be appointed as needed. While not all officers must be licensed professionals, the President must hold a valid license in the same field as the corporation’s purpose.

Starting a Professional Corporation in Oregon: A Guide

Here is a detailed guide to starting a professional corporation in Oregon that you should follow.

Step 1: Appointment of Registered Agent

The first step in forming a Professional Corporation is appointing Registered Agent in Oregon. This individual or company will act on behalf of the corporation, receiving official notices and legal documents. The agent must have a physical address in Oregon and be available during regular business hours.

We compiled the list of the best registered agent services in Oregon to help you choose the one you can rely on.

Step 2: Choosing the Name of the Corporation

Selecting a name for your Oregon Professional Corporation is crucial. The name must be unique and appropriate, including the words “professional corporation” or the abbreviation “P.C.” It must also comply with the rules and regulations of the governing licensing board and should not be confusingly similar to an existing corporation’s name.

Recommended: Lock down your ultimate business name confidently with the name reservation by a reliable business formation service. Effortlessly scope out name options with just a few clicks! We recommend –

Our #1 Pick: LegalZoom – ($0 + State Fees) Online LLC Setup

Step 3: Drafting of By-laws

By-laws are the internal rules and regulations governing the management and operations of the professional corporation. These should include provisions related to the appointment of directors, issuance of shares, and any restrictions imposed by the licensing board.

Step 4: Appointment of Board of Directors

The board of directors oversees the management and operations of the Oregon Professional Corporation. Directors must be licensed professionals in the same field as the corporation’s purpose.

Step 5: Conduction of Board Meetings

Regular board meetings are essential for maintaining the proper functioning and compliance of the professional corporation. The by-laws should specify the frequency, notice requirements, and procedures for conducting these meetings.

Step 6: Issuance of Corporate Shares

Shares represent ownership in the corporation. The professional corporation must issue shares to its shareholders, who must be licensed professionals in the same field. Share issuance should comply with the by-laws and any restrictions imposed by the licensing board.

Step 7: Comply with State Requirements

Forming Oregon Professional Corporation requires compliance with specific state requirements, such as obtaining necessary permits and licenses, paying fees, and adhering to rules and regulations the governing licensing board sets forth.

Need trustworthy guidance on business licenses, permits, and compliance? Look no further than the best business attorneys in Oregon who are adept at navigating your specific industry’s legal ins and outs. With their friendly support, you can confidently and seamlessly manage your business requirements!

Step 8: Filing of Statement of Information

Oregon professional corporations must file an annual report with the Oregon Secretary of State. This document includes essential information about the corporation, including its name, address, Registered Agent, and directors.

Step 9: Getting Tax Permits from the State

The professional corporation must obtain the necessary tax permits from the Oregon Department of Revenue, such as an Employer Identification Number (EIN) from the Internal Revenue Service (IRS).

Step 10: Opening of a Bank Account

Finally, open a separate bank account for the Oregon Professional Corporation to maintain proper accounting and financial records.

Fees Associated with Professional Corporation in Oregon

Here are some of the most common fees when starting a professional corporation in Oregon.

• State Laws and Regulations: To form a professional corporation in Oregon, it is crucial to comply with the state laws and regulations governing professional corporations. The Oregon Revised Statutes Chapter 58 and the specific licensing board’s regulations for each profession outline the requirements and restrictions for professional corporation formation. Before starting the process, professionals should consult with their licensing board to ensure they meet the necessary qualifications.
• Incorporation Process: Once the licensing requirements are met, the next step to form a professional corporation in Oregon is to draft and file the Articles of Incorporation with the Oregon Secretary of State. This document includes essential information about the corporation, such as its name, address, purpose, and number of authorized shares. Filing the Articles of Incorporation requires a filing fee currently $100 for most professions. However, it is essential to check with the Oregon Secretary of State for the specific fee associated with your profession.
• Naming Requirements: You must follow specific rules when choosing a name for a Professional Corporation in Oregon. The name must include the words “Professional Corporation,” “P.C.,” or “Prof. Corp.” Additionally, the name cannot be misleading or too similar to an existing corporation’s name. Conducting a name search with the Oregon Secretary of State is recommended to ensure the chosen name is available. This search is free, but reserving a name before filing the Articles of Incorporation requires a reservation fee of $100 online and $100 mail.
• Articles of Incorporation: The Articles of Incorporation is a critical document for forming a professional corporation in Oregon. It outlines the corporation’s essential information, such as the name, address, purpose, and number of authorized shares. The Articles must also include a statement that the corporation is a professional corporation and the specific profession it practices. Once completed, the Articles of Incorporation must be filed with the Oregon Secretary of State, accompanied by the appropriate filing fee.
• Additional Fees and Costs: In addition to the filing fees mentioned above, forming Professional Corporation in Oregon may involve other costs, such as:
  • Annual Report: professional corporations must file an initial Statement of Information with the Oregon Secretary of State every Anniversary month of the corporation of filing the Articles of Incorporation. The filing fee for this form is $100.
  • Licensing and Permit Fees: Depending on the specific profession, the governing licensing board may require additional licensing and permit fees.
  • Registered Agent Fee: Hiring of Registered Agent service will likely involve an annual fee of $50 – $150, which can vary depending on the service provider.
  • Legal and Accounting Fees: Forming a professional corporation may involve consulting with attorneys and accountants, which can result in additional professional fees.

Advantages of a Professional Corporation

• Limited Liability Protection: One of the main benefits of a professional corporation is its limited liability protection to its shareholders. This means the shareholders’ assets are protected from the corporation’s debts and liabilities.
• Tax Benefits: Professional Corporations enjoy specific tax benefits, such as deductions for business expenses and the ability to retain earnings within the corporation.
• Business Credibility: Operating as a professional corporation can enhance the credibility and reputation of the professional services, demonstrating a commitment to compliance and professionalism.
• Continuity of Operations: A professional corporation has a perpetual existence, ensuring the continuity of operations even if the shareholders or directors change.

Disadvantages of a Professional Corporation

• Complexity and Cost of Formation: Forming a professional corporation can be more complex and costly than other business structures, such as sole proprietorships or partnerships.
• Ongoing Compliance Requirements: professional corporations must adhere to ongoing compliance requirements, including regular board meetings, filing annual reports, and maintaining proper records.
• Limited Flexibility in Management: professional corporations may need more flexibility in management, as the board of directors must consist of licensed professionals in the same field.

Taxation of Professional Corporations

Here are the taxes that your professional corporation must pay in Oregon:

Federal income tax

A professional corporation in Oregon is subject to federal income tax on its net earnings. However, a P.C. can elect to be taxed as an S corporation, which allows the corporation’s income, deductions, and credits to pass through to the shareholders. This can result in significant tax savings by avoiding double taxation.

State taxes

Oregon Professional Corporation is also subject to state taxes, such as the Oregon franchise tax, which is based on the corporation’s annual net income. Additionally, depending on the nature of its operations, the professional corporation may be subject to other state and local taxes, such as payroll and sales taxes permit in Oregon.

Tax deductions and exemptions

A professional corporation in Oregon can take advantage of various tax deductions and exemptions, such as deductions for employee benefits, operating expenses, and depreciation. These deductions can help reduce the corporation’s taxable income, ultimately leading to tax savings for the P.C. and its shareholders.

Alternatives to Professional Corporations in Oregon

If you decide that a professional corporation is not for you, then you might consider the following alternatives.

• Sole Proprietorships: A simpler business structure is where an individual operates the business under their name without limited liability protection.
• Partnerships: Two or more individuals join to operate a business, sharing profits, losses, and responsibilities.
• Limited Liability Companies (LLCs): A hybrid business structure that combines the limited liability protection of a corporation with the tax benefits and flexibility of a partnership.
• S-corporations: Starting an S Corp in Oregon avoids double taxation by allowing income, losses, and deductions to pass through to the shareholders’ personal tax returns.

FAQs

Also Read

• Start a Professional Corporation in Alabama
• Start a Professional Corporation in Alaska
• Start a Professional Corporation in Arizona
• Start a Professional Corporation in Arkansas
• Start a Professional Corporation in California
• Start a Professional Corporation in Colorado
• Start a Professional Corporation in Connecticut
• Start a Professional Corporation in DC
• Start a Professional Corporation in Delaware
• Start a Professional Corporation in Florida
• Start a Professional Corporation in Georgia
• Start a Professional Corporation in Hawaii
• Start a Professional Corporation in Idaho
• Start a Professional Corporation in Illinois
• Start a Professional Corporation in Indiana
• Start a Professional Corporation in Iowa
• Start a Professional Corporation in Kansas
• Start a Professional Corporation in Kentucky
• Start a Professional Corporation in Louisiana
• Start a Professional Corporation in Maine
• Start a Professional Corporation in Maryland
• Start a Professional Corporation in Massachusetts
• Start a Professional Corporation in Michigan
• Start a Professional Corporation in Minnesota
• Start a Professional Corporation in Mississippi
• Start a Professional Corporation in Missouri
• Start a Professional Corporation in Montana
• Start a Professional Corporation in Nebraska
• Start a Professional Corporation in Nevada
• Start a Professional Corporation in New Hampshire
• Start a Professional Corporation in New Jersey
• Start a Professional Corporation in New Mexico
• Start a Professional Corporation in New York
• Start a Professional Corporation in North Carolina
• Start a Professional Corporation in North Dakota
• Start a Professional Corporation in Ohio
• Start a Professional Corporation in Oklahoma
• Start a Professional Corporation in Oregon
• Start a Professional Corporation in Pennsylvania
• Start a Professional Corporation in Rhode Island
• Start a Professional Corporation in South Carolina
• Start a Professional Corporation in South Dakota
• Start a Professional Corporation in Tennessee
• Start a Professional Corporation in Texas
• Start a Professional Corporation in Utah
• Start a Professional Corporation in Vermont
• Start a Professional Corporation in Virginia
• Start a Professional Corporation in Washington
• Start a Professional Corporation in West Virginia
• Start a Professional Corporation in Wisconsin
• Start a Professional Corporation in Wyoming

How to Save Money While Forming Oregon Professional Corporation

One way to save money when forming a professional corporation in Oregon is to do as much of the legwork yourself as possible. While it may be tempting to hire a lawyer to handle every aspect of the process, there are tasks that you can handle on your own to save on legal fees. For example, you can research the different types of professional corporations and decide which one is right for you. You can also draft your own articles of incorporation and bylaws, rather than paying a lawyer to do it for you. By taking the time to educate yourself on the process, you can save a significant amount of money.

Another way to save money when forming a professional corporation in Oregon is to shop around for the best deals on services. While it may be convenient to use the first lawyer or incorporation service you come across, taking the time to compare prices can save you hundreds, if not thousands, of dollars. Look for lawyers and services that offer flat-rate fees or discounts for bundled services. You can also ask for referrals from other professionals in your industry to find a reputable and affordable service to assist you.

In addition to shopping around for services, you can also save money by being strategic about when you form your professional corporation. In Oregon, there are annual fees and reports that must be filed to maintain your corporation’s status. By timing your formation strategically, you can avoid paying multiple fees in a short period of time. For example, if you’re nearing the end of the year, you may want to wait until the beginning of the new year to form your corporation so that you only have to pay one year’s worth of fees.

Furthermore, you can save money by keeping your corporate structure simple. While it may be tempting to create a complex web of ownership and management, this can lead to higher legal and accounting fees down the line. By keeping your professional corporation structure simple, you can save money on ongoing maintenance costs and make it easier to manage and grow your business.

Finally, consider forming a professional corporation with other professionals in your industry. By pooling your resources, you can split the costs of forming the corporation and potentially negotiate discounted rates with service providers. Additionally, sharing the responsibilities of running the corporation can make it easier to manage the business and reduce the workload for each individual.

Overall, saving money while forming a professional corporation in Oregon requires careful planning and consideration of your options. By doing as much of the work yourself, shopping around for affordable services, timing your formation strategically, keeping your structure simple, and considering forming a corporation with others, you can save money and successfully establish your professional corporation.

Conclusion

Oregon Professional Corporation can offer several benefits for licensed professionals. However, it is essential to carefully consider the proper structure and compliance requirements before proceeding. Seeking professional guidance in forming a professional corporation can help ensure a smooth process and enable professionals to focus on providing their services. Visit LLCBase for more information about starting a professional corporation in Oregon.