Oregon is home to 403,000 small businesses, which employ nearly 900,000 employees. The northwestern state offers countless incentive programs for entrepreneurs to start new ventures without a heavy tax burden and, according to the US News and World Report, has the fourth-highest patent creation rate in the country.
But after you come up with your business idea and hatch your business plan, how do you actually get the project off the ground? This step-by-step guide will walk you through state-specific requirements when it comes to structuring your business entity, setting up payroll, and taking advantage of the Beaver State’s abundance of funding opportunities.
1. Name your business
Once you've conceived an idea and business plan for your new Oregonian venture, it comes time to name it. To make it official, you need to follow guidelines set by Oregon's Secretary of State office. Here are the main things to keep in mind:
- Search the Secretary of State office's business registry to check whether your desired name is taken.
- Search active trademark registrations in Oregon and, if available, certify your desired trademark by submitting a registration form.
- Fill out an Assumed Business Name registration form if you'd like to use a separate name from your official entity name when you interact with customers. This is also known as a doing business as (DBA) name. Sole proprietorships and general partnerships need to register an assumed business name if they want to use something other than the business owners' legal names.
- Oregon businesses have different naming requirements based on their business structure (more on this in a moment). For instance, a limited liability company needs to have the abbreviation "LLC" in its name. The same goes for corporations, which need to include "corporation," "company," "incorporated," or "limited" in their name.
Once your business name is certified, hopeful small business owners should consider also registering a matching domain name for their business website, along with a social media handle.
2. Explore your funding options
Once you've named your business, keep your eye out for loans, grants, and other Oregon-based financing options. Such resources can cover startup costs and jolt your fledgling business with working capital.
Here are some funding options worth considering:
- Oregon has eight different offices that administer revolving loan funds. Prosper Portland, for instance, offers up to $10,000 for Portland small businesses in need of repairs from physical damage.
- Funding programs sponsored by the US Small Business Administration (SBA) provide counseling, certifications, and disaster relief for emerging companies. The SBA has a Portland office that serves 30 of Oregon's 36 counties.
- Business Oregon, a government agency, helps with infrastructure grants, loan guarantees, and investments throughout the state. They also have a targeted grant for tech startups.
- The Oregon Business Development Fund offers financing to help with land acquisition, buildings, equipment, machinery, and working capital.
- The Credit Enhancement Fund guarantees loans to lenders, to give new businesses an easier time qualifying for loan terms.
You can also seek out other types of loans from traditional banks and online lenders, like a business line of credit. Keep in mind: New businesses that aren't yet financially solvent may not qualify. So, you should also seek out zero-debt financing options (apart from grants) like bootstrapping, crowdfunding, and angel investments.
3. Decide on your business structure
According to the Oregon Secretary of State Office's "Start a Business" guide, the main business structures used in the state are sole proprietorships, general partnerships, limited liability companies (LLCs), and corporations. Each entity structure establishes different tax requirements, liability protections, and decision-making powers.
Here's a breakdown of how the four main Oregon business structures compare:
Type of business
What is it?
Pros and cons
An unincorporated business with a single owner
✔ You can hire employees.
✔ The owner reports personal and business income in the same tax return.
✘ The single owner assumes all liability for business debts.
Limited Liability Company (LLC)
A company, governed by an operating agreement, with one or multiple owners ("members") who, for tax purposes, are legally distinct from the owners themselves
✔ Can more reliably secure funding through loans or investments
✔ You can elect how to be taxed, depending on how many members you have.
✔ Structure protects personal assets from legal liability.
✘ Personal assets can still be legally linked to your business. For accounting purposes, you should separate business expenses and personal expenses.
✘ Members need to unanimously sign off on any transfer of management duties.
Legal entity distinct from the business owners and governed by bylaws, managed by shareholders who appoint a board to oversee operations and are liable for the business
✔ Easier to secure investment and transfer shares to new members
✔Owners are protected from personal liability; shareholders are only liable for their investment.
✔ Can be structured as an S-Corporation (S-CORP) or C-Corporation (C-CORP).
✘ “Double taxation” for C-Corps—the corporation pays income taxes on its income, and shareholders also pay taxes on dividends.
Where two or more people control a business and split profits, debts, and management. Partners assume legal liability themselves and for their other partners
✔ Partners are taxed once (reporting their slice of business income on their personal tax return) and get pass-through tax treatment.
✔ Easier to set up than corporations
✘ Investors can be wary of shared debts and liabilities across partners.
✘ Partners assume unlimited personal liability.
4. Register your business in Oregon
In Oregon, business registration varies depending on the structure of your entity. Sole proprietorships and general partnerships only need to register their business if they're using an assumed business name instead of their legal name. Oregon LLCs and corporations, on the other hand, always need to be registered with the Oregon Secretary of State.
Here's a further breakdown of registration protocol, filing fees, and formation documents:
How to register
File your Articles of Organization with the Secretary of State online or by mail.
General Partnership and Sole Proprietorship
If using an assumed business name different from your own, file a name registration form with the Secretary of State online or by mail.
5. Decide on a registered agent
Oregon state law requires businesses to list a registered agent if they're set up as LLCs or corporations. The business designates this individual to collect legal documents on its behalf. The registered agent is also responsible for notifying the business owner of any lawsuits, notices, and official processes.
The registered agent, who can be one of the company's business owners, has to be an Oregon resident and keep a physical office within the state. You can submit the agent's contact information to the Secretary of State on the same form you use to register your business.
While not required, you can tap professional registered agents through third-party services, which will charge annual fees starting at around $35. They can help with compliance monitoring, document scanning, and tax notifications. If you want round-the-clock customer service and same-day document delivery, expect to pay more.
6. Apply for an Employer Identification Number
All US-based businesses need a federal Employer Identification Number (EIN) before they can hire and pay employees. An EIN is also typically required for applying for bank accounts and loans (as a sole proprietor, you can substitute this number with your Social Security number if you don’t have any employees).
You also need an EIN to pay taxes and run payroll. The Internal Revenue Service (IRS) administers EINs; Oregon businesses can apply for one for free by submitting Form SS-4 online or by mail. If you're just starting your Oregon business but are looking to hire employees immediately, you may also need a separate Business Identification Number (BIN) to file payroll taxes.
7. Get up to speed with Business Tax Credits
If you're starting a new business, you should always look out for opportunities to relieve your tax burden and lower operational costs. The state of Oregon provides several incentive programs catered to emerging businesses that do just that. Examples include:
- Enterprise Zones: An incentive program that eliminates local tax requirements for property and equipment for three to five years to spur development throughout the state. Oregon has 74 of these "enterprise zones" (56 rural and 18 urban).
- Strategic Investment Program: Provides property tax exemptions for 15 years for "traded sector" businesses, which are companies that operate in competitive markets.
- Oregon Investment Advantage: Gives 10-year exemptions (renewable after the end of the term) on taxable income for certified businesses in underserved counties.
Oregon-based businesses are also eligible for federal programs like the Work Opportunity Tax Credit, which offers up to $9,600 per hire for employers hiring workers who face barriers to employment—like Oregon residents who receive food stamp benefits or have been previously incarcerated.
Consult the Business Oregon state website for more information on tax incentives, including eligible businesses and application processes.
8. Stay on top of filing requirements and taxes
The Oregon Department of Revenue requires entities to regularly file tax and other business documents with the state government. Exact requirements vary depending on business structure, but you’ll typically have to file:
- Sales taxes
- Corporate Activity Taxes (CATs)
- State income taxes
- Federal taxes
- A personal property tax report
- Employer withholding taxes (if you employ workers)
When applicable, you’ll also need to pay taxes for specific industries like marijuana, alcohol, and petroleum. Consult the Oregon Department of Revenue website for a list of all tax forms.
In addition to their taxes, LLCs and corporations also need to file annual reports, updating Oregon authorities about the status of the business and any recent changes. Corporations doing business in Oregon typically have to pay an excise tax. Tax returns for corporations are due the month after federal tax returns.
Sole proprietorships file income on their individual tax return (IRS Form 1040) and may be liable for self-employment taxes. General partnerships file a separate, additional tax return (IRS Form 1065).
For more information on tax obligations for different business entities and filing due dates, visit the Oregon Department of Revenue’s resource hub.
9. Find a payroll solution
If you’re ready to hire employees for your new Oregon business, keep in mind that running payroll can be tricky. You need to pay your workforce promptly and accurately, but you also have to avoid compliance pitfalls. That means distinguishing employees from independent contractors to steer clear of misclassification penalties, and withholding necessary employer contributions—some of which, including the Workers’ Benefit Fund and transit tax, are unique to Oregon.
Also, remember that some Oregon labor laws deviate from federal minimums. The minimum wage, for instance, is $14.20 an hour (compared to $7.25 federally). On top of that, when employees work more than 40 hours in a workweek, you must pay them 1.5 times their usual hourly rate unless they’re exempt.
It also helps if your payroll solution eases your administrative burden so you can focus on growing your workforce. Rippling, for instance, has a Time & Attendance feature that tracks employee hours and can ping you when an employee reaches overtime (or is about to). Once it’s time to run payroll, you can sync approved hours, click “Submit,” and have Rippling automatically calculate net pay and withhold applicable taxes.
Even if you’re venturing beyond the Oregon talent pool into a new state, country, or continent, Rippling can accelerate global hiring by:
- Paying people in different tax jurisdictions and even different currencies—in a single pay run
- Including hourly and salary employees, as well as contractors
- Managing people, systems, and employee data from a single source of truth
- Monitoring federal, state, and local compliance when administering benefits for employees living in different jurisdictions—domestically or internationally
10. Support and scale your growing business with Rippling
Endless HR responsibilities can be a costly time suck when you’re trying to get your new business off the ground. One of the best tools to help you scale is an HRIS (Human Resource Information System), which can help you handle the most cumbersome onboarding, benefits admin, and recruiting processes. You’ll be able to focus on your business's core facets and eventually grow it globally.
Within a single, integrated system, Rippling has an HRIS that can:
- Hire, pay, and manage your employees and contractors—whether they’re based in Portland, Oregon, or Porto, Portugal.
- Preemptively monitor local, state, and federal compliance issues and advise how to proceed with each.
- Administer all benefits—whether health insurance, 401(k), remote work stipends, and more—from a single source of truth.
- Track and update recruiting data across every step of the hiring lifecycle.
- Run customized reports to help with workforce planning and other HR processes.
FAQs about setting up a business in Oregon
Do I need a business license in Oregon?
While there’s no generic business license in Oregon, most of the state’s commercial activities require some form of license, permit, or state-administered certificate. The state government offers a searchable directory called (Business Xpress) of more than 1,500 certifications to check licensing requirements. There may also be city or county-specific licenses for doing business within certain areas.
In addition to consulting the License Directory, you should also visit Oregon’s Office of Small Business Assistance for advice on permitting guidelines for your business location.
Do I need a business bank account when launching a business in Oregon?
While you aren’t legally required to open a business bank account in Oregon, you’re always better off separating business finances and personal expenses. This protects your personal assets and makes paperwork easier to produce for tax authorities. Business bank accounts are also typically required for applying for small business loans from banks, like a business line of credit or business credit card.
Also, keep in mind that if you have employees, you need a business bank account to run payroll for your workforce.
Do I need to get business insurance?
Oregon requires all employers to offer workers’ compensation insurance and unemployment insurance. You also need commercial auto insurance if you use a vehicle for business purposes. You should also strongly consider offering:
- General liability insurance
- Personal liability protection
- Business property insurance
- Business interruption insurance
- Key person insurance
It’s wise to speak to a lawyer or insurance agent to determine what kind of coverage your business needs and could use. For more information on Oregon’s business insurance coverage options, consult the state’s Small Business Guide to Insurance and Worksite Safety.
What is the corporate tax rate in Oregon?
Oregon’s corporate income tax rate ranges from 6.60% to 7.60%. In lieu of a state sales tax, Oregon also applies gross receipts taxes to a company’s sales. The state’s tax rate for individual income ranges from 4.75% to 9.90%. As of 2023, Oregon ranks 24th in the Tax Foundation’s State Business Tax Climate Index.
Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.