Businesses / Nonprofits

Photo by John Jordan-CascadeYour business may be in the form of a sole proprietorship, a partnership, a corporation, or a limited liability company. There are advantages and disadvantages to each form of business organization, and you should involve both an attorney and an accountant in determining which form would best suit you.

A sole proprietorship is the simplest form of business and has the lowest startup costs. The owner makes all of the decisions, retains all of the profits, and is personally liable for all of the business debt.

A partnership is two or more persons who carry on as co-owners of a business for profit. A partnership agreement should be put in writing and prepared by an attorney.

A corporation is more complex, and it exists under the provisions of state law as to its formation and scope of operation. It is a legal entity separate from the shareholders, but it has the same rights and obligations as an individual. For instance, a corporation can own property, carry on business, incur liability, and be sued. A corporation is formed by filing articles of incorporation with the Oregon secretary of state. There are two distinguishing features of a corporation. The first is limited liability of the shareholders for corporate debt. Shareholders are generally not individually liable for company debts unless they sign a personal guarantee. The second is that a corporation provides continuity, and the entity continues in existence even after the death of a shareholder or the transfer of shares.

A limited liability company or “LLC” is also a statutory entity. It is similar to a corporation in that it provides limited liability protection for its owners, but it is taxed either as a partnership, sole proprietorship or like a corporation, depending upon how it is organized. An LLC is formed by filing articles of organization with the Oregon secretary of state.

The Board of Directors of both for profit and nonprofit corporations have certain rights and responsibilities. The Board is the governing body of the organization. It sets policies, maintains records, protects financial resources, and oversees management. Board members must act in good faith, use due care (act as a prudent person in like circumstances), and remain loyal to the best interest of the corporation.

I have worked with several local nonprofits and I can provide advice on formation of businesses and nonprofits, adoption of employment and fiscal policies, and personnel matters.


Please feel free to call me during normal business hours (Monday through Friday: 9 am to 5 pm, Pacific Standard Time) to set up an appointment: (541) 200-6300.

If you’d like more detailed information, please email my office: joe@joecharterlawoffice.com and I will send a PDF document with more detail as an attachment in an email. When you contact me, please make sure to include your name and the area of my legal services that interest you the most.

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