Form a General Partnership in Oregon

If you and at least one other person go into business together for profit, you have an Oregon general partnership—it doesn’t matter if you intended to start a general partnership or not. Normally, general partners equally share the profits and losses of their business. General partners also usually share equal authority to manage the business.

Does this sound like a good business option for you? If so, let’s talk in this article about how to form a general partnership in Oregon. Let’s also explore the benefits and disadvantages of running a general partnership. 

Step 1: Determine if you should start a general partnership

A great way to make a solid business decision is to think about whether you can deal with the potentially negative aspects of your decision and whether the positive aspects are valuable to you. There are several important pros and cons to starting a general partnership. 

Pros

There are a lot of attractive features to running a general partnership, including: 

• Simple, straightforward formation
• Pass-through tax treatment
• Straightforward distribution of losses and profits
• Low maintenance

When it comes to formation, maintenance, and legal compliance, general partnerships can be less financially taxing and less fussy than many other business types. 

Cons

For the ease that comes with forming a partnership in Oregon, there are a number of potential drawbacks. Disadvantages to running a general partnership include:

• Partners being jointly and severally liable for the partnership’s legal and financial issues
• Partners being liable for wrongful actions other partners commit in the ordinary course of business 
• Having fewer options to raise capital than other business entities
• Having less flexibility to transfer ownership than other business entities 

Because of the high potential for each partner’s personal liability and the low flexibility for changes of ownership, general partnerships are often better suited for short-term business ventures. For a long-term business venture, you might be better off starting a more formal entity.

If you like the partnership structure, but you’re seeking legal and financial protections of a more formal legal entity, there are different business structures you can try. It’s best to speak to legal and financial professionals before starting one of these types of partnerships. 

Step 2: Choose a business name

There is no requirement in Oregon for general partnership registration, especially if you use each general partner’s name as the name of the business. But, if you give your general partnership a name different from your partners’ names, your business has an assumed name that you must register with the Oregon Secretary of State (SOS). If you already have a name in mind, check to see if your business name is available.

Step 3: File a DBA name

You have to register an assumed name if you use a made-up name or don’t include all of the general partners’ legal names in your general partnership’s name. Many states call assumed names “doing business as” names or DBAs. Your DBA needs to be distinguishable from other names on record with the SOS. Once you have a distinguishable DBA, you:

• File an Assumed Business Name registration form with the SOS
• Pay the associated filing fee

You also need to periodically renew your assumed name registration.

The less time you need to spend on administrative tasks for your business, the better, even when it comes to registering a DBA. Our Oregon DBA Service can help you register a DBA for your business quickly and easily, so you can devote your time to more pressing business issues. 

Step 4: Draft and sign a Partnership Agreement

Often, one of the best perks many business owners enjoy is having control. You can increase the control you have over your business operations by drafting and signing an Oregon General Partnership Agreement. Without a Partnership Agreement, you have to run your business according to the default legal rules in Oregon’s Uniform Partnership Law. It’s important to have a Partnership Agreement because Oregon’s laws might not suit your business needs.  With a Partnership Agreement, you and your business partners can make your own rules about matters such as: 

• How individual partners will split income and losses
• What partners must do to transfer ownership
• How to resolve partnership conflicts
• What events lead to the dissolution of the partnership

You can write many more rules than this in your Partnership Agreement, and it’s best to speak to legal and financial professionals about what terms should be in your Partnership Agreement. 

Step 5: Obtain licenses, permits, clearances

You generally don’t have to file any paperwork to form your general partnership, but you’ll likely need to have some kind of business license, clearance, or permit before you can legally conduct business. 

The types of licenses you need depend on the characteristics of your business. You might also need multiple licenses, permits, or clearances from federal, state, and local government entities. State licenses and other state authorizations your business might need can include:

• Environmental permits
• Food licenses
• Professional licenses
• Liquor licenses

You might need more than one business license, permit, or clearance from federal, state, and local government entities.

Unfortunately, there isn’t a central database that lists all of the licenses and authorizations your unique business needs. But, with our partners as Avalara, we can do the heavy lifting of identifying your business licensing needs for you with our Business License Report.

Step 6: Get an Employer Identification Number (EIN)

An Employer Identification Number (EIN) is a vital identifier that many businesses need from the IRS to properly file a federal income tax return. In general, all business owners except for sole proprietors and owners of single-member LLCs must have EINs for their businesses. Your time is valuable, and we can save you the time it takes to obtain an EIN with our Employer ID Number Service. 

Step 7: Get Oregon state tax identification numbers

To pay your Oregon business taxes online, you need an Oregon Business Identification Number or Account ID. General partnerships that have employees need Business Identification Numbers and can register for them through the Oregon Employment Department. You can reach out to the Oregon Department of Revenue about obtaining an Account ID. 

Forming a Business Partnership in Oregon: Next Steps

In many cases, the next steps for a newly formed Oregon general partnership are about building finances and protecting assets. With your new business’s EIN, you can start a bank account for your general partnership and apply for different kinds of insurance to protect what you build. You will also want to keep up with your taxes.

How We Can Help 

However easy it might be to form a general partnership, keeping it legally compliant and smoothly running can be a complicated feat. We are here to simplify your business operations with our business development and maintenance services. Your partnership will likely have multiple tax registration and licensing obligations that we can help you quickly fulfill with services such as our Worry-Free Compliance Service. We’re here to support you and your business’s needs no matter what stage it is in.

If you are looking for more robust liability protection and forming a partnership doesn’t suit your needs, we can help you form a limited liability company (LLC) or a corporation with our Oregon LLC Formation Service, or our Oregon Corporation Formation Service.