Business Lawyers Blog
Oregon has a deep consumer market, and many businesses are seeking to enter the marketplace. However, foreign corporations and other entities such as limited liability companies need permission from the state before they begin performing transactions. These entities also must fully understand their tax obligations, which typically require registering with the Oregon Department of Revenue. Although Oregon welcomes business entities from around the world and the other 49 states, it’s critical to ensure that you meet all obligations. Below, we examine some of the most significant requirements for doing business in Oregon. Contact an Oregon business lawyer from SLG for assistance with your specific situation.
Applying for Authorization
Under ORS 60.701, a “foreign” corporation (meaning any non-Oregon corporation) may not transact business in Oregon unless authorization has been granted by the Secretary of State. There are similar statues for limited liability companies and other business entities. In general, most business activity conducted in Oregon requires a formal application for authorization.
However, Oregon law excludes certain activities from the definition of “transacting business.” Registration is not required for activities such as maintaining or defending lawsuits, selling through independent contractors, or soliciting business through the mail. A single isolated transaction also does not qualify as “transacting business” if it is completed within 30 days.
Companies with a more substantial presence in the state must obtain authorization from the Oregon Secretary of State. For example, opening an office or employing workers in Oregon typically requires registration.
Failure to obtain the required authorization can prevent a foreign business from maintaining a lawsuit in Oregon courts. This restriction can significantly affect a company’s ability to enforce contracts or seek relief from fraud or other improper conduct until authorization is obtained.
ORS 60.707 lays out what is required in the application:
- Name
- State or country of incorporation
- Registration number
- Date of incorporation
- Address of the principal office
- Address of a registered agent in the state
- Address of the company president and secretary
In many cases, the corporation will need to submit an authenticated certificate.
Registration to Pay Oregon Income and Excise Taxes
Entities with headquarters outside Oregon must comply with Oregon tax law. This means you must file tax returns if your corporation does business in the state or has income from an Oregon source.
The state defines doing business very broadly and can include having any of the following in Oregon:
- Office
- Place of business
- Stock of goods
- Employees or representatives
Any tangible property in Oregon that generates income will be considered Oregon-source income, triggering tax obligations.
If a business entity has a substantial nexus with Oregon, then it will need to pay income and excise taxes. A nexus is a link to the state and can be as simple as contracting with independent contractors in Oregon to provide services to customers. An office or even a local phone number can provide a nexus. Consult an Oregon business lawyer at SLG if you have questions about tax obligations. Our Oregon legal compliance services ensure that companies meet all obligations and can protect their legal rights.