LLC in Oregon

LLC in Oregon talk on Sunday afternoon

The neighbors were, to my surprise, talking about setting up a business. So I recommended a LLC in Oregon, and went on to tell them about the WORST way to do this.

Many people know about incorporating. This is a common way to organize your business and it works pretty well. Many people also understand that operating in your own name, a proprietorship, can be a mistake. You have unlimited liability. It is difficult to sell the business as a going concern.

However, the worst possible business organization is not the proprietorship. You have unlimited liability (and no exit strategy) in a proprietorship, but you can do much worse.

To attain the worst possible status, you combine unlimited liability, with no control over the risky deals and foolish decisions that you are liable for. This sad situation is what I call an “accidental partnership”.

The Uniform Partnership Act is in force in Oregon, and in most other States, in various forms. See Uniform Law Commissioners’ Fact Sheet for a list of states covered. Check your State’s code for the final word.

Under the Uniform Partnership Act,
“ … the association of two or more persons to carry on as co-owners a business for profit forms a partnership, whether or not the persons intend to form a partnership.”

Some clever readers will already know how this story can end. You and your new friend decide to open a nice little business, and to share the expected profits. Congratulations, you are now a partner with unlimited liability for what he does in the business.

A while later, your new friend has a weak moment. He falls under the spell of an idea. And he signs the business name to an expensive deal. The result? You are personally liable for this fiasco, even though you neither approved nor knew about the bad deal.

You now know the worst way to set up your business. On the other hand, the best way to set up your business is not difficult.

High income individuals never have an accidental partnership. High income people would never consider risking everything in such a disorganized fashion. High income people get the business organized. They protect their personal assets by insisting on limited liability.

Standard corporations are still used and are satisfactory. The more recommended entity for a typical startup is the limited liability company or LLC. Your best bet is an LLC in Oregon.

Hiring a business lawyer to set up the LLC is always best. A business lawyer is necessary if the situation is complicated. Typically, the legal fees for a small entity organization will be about $600 to $1,000 plus the State filing fees.

Multiple owners, especially multiple or unequal owners, makes the organization too complex to do yourself. Any investment by an outsider makes it complex.

If the situation is simple, for example one owner, and you cannot afford typical legal fees, you can do this inexpensively by using a web-based service. I recommend MyNewCompany. Good price, good service.

The paperwork varies by State, so make sure you use a service that does what is necessary to start your business as an LLC in Oregon.