Under Oregon law, a business may incorporate. If it chooses to do so, it is thereafter identified as its own legal entity. This means that the business can buy or sell property, offer and accept contracts and exercise legal rights in its own name. A business looking to incorporate in Oregon must file with the Secretary of State in accordance with established guidelines.
Benefits of Incorporation in Oregon
Certain advantages inure to a business in Oregon that has incorporated over one that has not. First, a corporation's liabilities can never go beyond the amount invested in the business by the owners. Had the business instead remained a collection of the owners' personal assets, the personal property of the stakeholders could be liquidated to pay the liabilities of the business, if it runs into financial issues. Furthermore, a business that has not incorporated puts the unnecessary burden on creditors in the Troutdale area to evaluate the credit worthiness of individual owners rather than that of the business, making loans more difficult. Lastly, ownership of a corporation is divided into equal portions or "shares" of stock, which may be bought and sold much more easily than the ownership of an unincorporated business.
Costs of Incorporation
There are costs associated with incorporation, both short and long term. First, businesses in Oregon might be charged a fee to incorporate. Also, a corporation is taxed as its own entity. Disbursements to the owners of the corporation are also taxed as individual income, so this means earnings might be taxed twice. But this double taxation can be avoided with proper planning and help from a local Troutdale lawyer.