Keep your Oregon Business in Good Standing
When you started your Oregon business, you had to decide what type of legal entity you would use. For example, you may have chosen to use a corporation, limited liability company, sole proprietorship, joint venture, partnership or limited partnership.
A corporation or LLC is a good choice in many situations because the owner will be shielded from personal liability for business debt, with the possible exception of liability that may accrue because the owner engages in some type of wrongdoing. Personal liability of a corporate director, officer or shareholder for wrongdoing is usually called piercing the corporate veil.
The setup, operation and winding down of legal business entities like these in Oregon are governed by state law. Normally a startup business will consult with a knowledgeable commercial law attorney for help determining the type of business entity that will be most advantageous for the particular circumstances.
Oregon has detailed legal requirements for setting up a corporation or LLC, for example. These requirements mainly involve legal documents. A smart course of action is to have your business lawyer help you discern what documents are necessary in your case and then assist you in drafting, executing and filing them with government authorities, when necessary.
In Oregon, as in most other states, the main government entity with which such corporate or other business formation documents must be filed is the Oregon Secretary of State.
Once established, a corporation or LLC will have important record keeping responsibilities. For example, an Oregon corporation must keep permanently certain internal records. Some examples of these include minutes of shareholder or board of director meetings, as well as of actions taken without meetings, adequate accounting records, shareholder names and ownership information, articles of incorporation and current amendments, most recent annual report and more.
A fatal mistake some businesses make, especially small businesses, is to ignore ongoing legal responsibilities to stay in touch with the secretary of state’s office by filing periodically required documents. In Oregon, for example, every corporation must file its current (no more than 30 days old) annual report by its yearly anniversary (also called renewing the business). This can be done online.
The secretary of state can administratively dissolve a private corporation for failing to file its annual report. Be sure to stay in good standing.
Other state law requirements may apply to a business like registration of assumed trade names or licensing requirements. Fees or dues may also be periodically due.
Don’t sit on your laurels once you have your Oregon business properly set up and registered with the state. Observe corporate formalities so you can legally continue to conduct business. Develop an ongoing relationship with a skilled business attorney to educate you and assist with all of your official record keeping, filing and financial obligations so your business is not jeopardized.