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Oregon’s growing population, educated workforce, abundant natural resources, and favorable tax conditions (no sales tax, for example) make it an appealing destination for aspiring small business owners. Plus, it's a more affordable place to start a business than neighboring California and Washington. Ahead, learn the eight key steps for how to start a business in Oregon.
Start a Business in Oregon
1. Choose a business idea
At the core of any successful business is a great business idea. You might devise a new product or service or improve an existing one. Once you have a concept, make sure it’s feasible by asking yourself the following questions:
- Who is your customer? Have a clear understanding of who you’re selling to. As a new Oregon business owner, you’ll need to analyze your target market, especially within your chosen business location. Focus your market research on customers who aren’t served by current offerings.
- What’s your projected profitability? You can’t stay in business if you don’t make enough to cover your costs and generate profit. What’s your break-even point? How much must you sell to cover your costs? How long will it take?
Once you’ve honed in on a business idea, you’ll need to choose a business name. A good name shapes your potential customers’ first impressions and hints at your company’s offerings. Keep the following in mind as you brainstorm:
- Be original. A unique business name not only sets you apart, but it’s also required by law. Confirm your preferred name hasn’t been taken by another business entity with the Oregon Secretary of State’s business name search tool.
- Include certain words. Oregon LLCs must include the phrase “Limited Liability Company” or its abbreviations (“LLC” or “L.L.C.”) in their official business names. Oregon business corporation names must include “Corporation,” “Company,” “Incorporated,” or “Limited,” or abbreviations of these words. A professional corporation’s names must include the phrase “Professional Corporation” or an abbreviation.
- Register your legal name. Register your business entity name with the Oregon Business Registry, run by the Oregon Secretary of State Corporation Division. There’s a $100 filing fee.
- Explore a DBA. DBA stands for “doing business as.” A DBA allows a company to organize under one legal name but interface with customers under a different, assumed name. For instance, Favored Trust Forestry Holdings LLC might operate under the DBA Barney’s Christmas Tree Village. To use a DBA in Oregon, file an Assumed Business Name registration form with the $50 filing fee.
- Secure a domain name and social media handles. Ideally, your business website has a domain name (URL) that aligns with your business name or DBA. You’ll also want relevant social media handles, so customers can quickly find your business online. Shopify’s domain name generator can jumpstart the process.
Entrepreneurs rely on business plans to establish organizational objectives, plot growth, lay out financial procedures, and establish benchmarks for success. You can consult a business plan template or examples to learn how to craft your own. Most comprehensive business plans include:
- An executive summary
- A mission statement and company description
- An outline of the organizational and managerial structure
- Financial plans, including forecasted business income and business expenses
- An operations and logistics plan
- A portfolio of products or services
- Market research and analysis
- A marketing plan
- A customer segmentation report
4. Choose a business structure and get started
Your Oregon business entity will likely take one of three business structures: a sole proprietorship, a limited liability company (LLC), or a corporation. Each has its benefits, operational requirements, and tax exposure. Here are the key tenets of each structure:
- Sole proprietorship. Sole proprietorships can suit businesses owned and operated by a single person. These informal business structures have no legal paperwork requirements, and owners keep all their profits. They’re not recognized as legal entities, meaning there’s no distinction between an owner’s personal and business finances. However, if the company is sued, the owner could have to pay out of their personal savings. Many sole proprietors choose to have separate personal and business accounts. Oregon sole proprietorships may be the right business structure for small business owners in low-risk industries with no employees.
- LLC. A limited liability company (LLC) is a formal business structure owned by one or multiple members. LLC members use an LLC operating agreement to govern company operations. LLCs provide personal asset protection, meaning owners’ personal cash and possessions are not at risk if the LLC is sued. Regarding federal taxes, LLCs are treated as pass-through organizations, meaning profits and losses pass through to members, who report them on their personal income tax returns.
- Corporation. A corporation is a legal business entity owned by shareholders. Like LLCs, corporations don’t mingle company assets with owners’ personal assets, protecting owners in case of lawsuits or bankruptcy. The shares-based corporate business structure makes it easy to accept new shareholders, sell the business to new owners, and raise capital for business expenses. Standard corporations, called C corporations, are taxed at a corporate rate, different from the personal income tax rate. (Oregon’s corporate excise tax ranges from 6.6% to 7.6%.) S corporations—slightly different types of corporations—are taxed like LLCs. Corporations require more formalized accounting and tax filing than LLCs or sole proprietorships and must maintain corporate boards of directors, name corporate officers, and hold periodic meetings.
Incorporating in Oregon
Oregon requires new corporations to:
- File articles of incorporation. Oregon corporations must file Articles of Incorporation online or by mail. The filing fee is $100. If your corporation is based in another state and wants to expand into Oregon, file an Application for Authority for permission to operate in Oregon, online or by mail, for $275.
- Designate a registered agent. You can designate a registered agent from your ownership ranks, or hire a registered agent service. Registered agents receive legal and tax correspondence on behalf of a company and must have a physical address in the state of Oregon.
Obtaining an EIN
Oregon employers must obtain a federal employer identification number (EIN) through the Internal Revenue Service (IRS). An EIN is your business’s federal tax identification number, like how your Social Security number is your personal tax identifier. An EIN enables you to hire employees and set up a business bank account. Employers use their EIN when registering Form 150-211-055: Combined Employer’s Registration with the Oregon Secretary of State’s office.
5. Obtain a business license and permits
Oregon has no general business license, though many Oregon businesses need specific licenses to operate legally. These licenses and permits are issued by different government agencies at the state level and county levels. Oregon’s Business XPress License Directory can help you determine which Oregon business licenses you need in your industry. The Oregon Secretary of State also publishes a thorough Start A Business Guide that breaks down licensing and permitting requirements.
6. Examine business insurance options in Oregon
Personal asset protection is baked into the LLC and corporate business structures, but these entities still need business insurance to protect company assets. The Division of Financial Regulation governs the Oregon insurance market and provides resources for business owners seeking coverage. Common policies include:
- Workers’ compensation insurance. All Oregon employers need workers’ compensation insurance to cover employee on-the-job injuries. Note that workers’ compensation does not cover independent contractors.
- Professional liability insurance. A professional liability insurance policy protects your business against claims that your advice or services caused harm. For example, a lawyer who misrepresents state law can be found liable for damages and could benefit from professional liability coverage.
- General liability insurance. General liability insurance can protect companies held liable for bodily injury, property damage, slander, libel, or misleading advertising.
- Unemployment insurance. Oregon employers pay an unemployment insurance tax to the state’s unemployment insurance fund for laid-off workers.
- Commercial automobile insurance. All Oregon automobiles must be covered by vehicle insurance, whether they’re used for commercial or personal purposes.
New businesses come with startup costs—and sometimes more than anticipated. You may pursue small business loans, grants, and special tax benefits to cover these costs. Business banking—taking out a line of credit or obtaining a business credit card—can help you access capital.
Oregon’s Start A Business Guide outlines in-state funding sources. You can also reach out to the US Small Business Administration, which maintains a Portland office covering much of the state. (Parts of northern Oregon are covered by the SBA’s Seattle office, while parts of eastern Oregon are covered by the SBA’s Boise office.) You can also look to merchant support services like Shopify Capital.
8. Market your business
Corporate marketing starts with building a brand and identifying what makes it stand out. Marketers use logos, slogans, color schemes, and fonts. Once you’ve articulated your brand identity, you’re ready to promote your business online, over the airwaves, and in person. A solid marketing strategy includes:
- Market research. It’s important to understand your target customer.
- Advertising and promotion. Get the word out through paid advertising, awareness content (articles, blog posts, videos, newsletters), and search engine optimization (SEO). You can do this yourself, or hire an agency.
- Social media. Social media marketing is essential for small businesses to get the word out. Create a business profile and promote your offering on platforms like Facebook, Instagram, YouTube, and TikTok.
- Public relations. Create relationships with media outlets that can increase your visibility.
Starting a business in Oregon FAQ
How much does it cost to start your own business in Oregon?
Oregon small business startup costs are relatively low: LLC startups must file Articles of Organization/Limited Liability Company with the Secretary of State. Corporations must file Articles of Incorporation. Both filings cost $100. You also pay $100 to register your business entity name with the Oregon Business Registry and an additional $50 if you want to register a DBA (called an assumed business name in Oregon).
What are the requirements to start a business in Oregon?
New Oregon businesses need to register a legal name and file formation documents: Articles of Organization if you’re forming an LLC or Articles of Incorporation for a corporation. Sole proprietorships do not have to file formation documents but must register an Assumed Business Name if they aren’t using the proprietor’s legal name when doing business. Regardless of business structure, all Oregon employers must get a federal employer identification number (EIN) and submit Oregon state employee taxes, known as payroll taxes.
Is Oregon a good state for business?
Oregon’s business appeal derives from its relatively low cost of living (especially compared to neighboring California and Washington), lack of a sales tax, and accessible state government, which offers resources like the Oregon Start A Business Guide. Oregon provides the ideal mix of affordability, growth opportunities, and diverse industries.