By Timothy I. Crawley
If you are a business owner or are thinking of starting a business you probably have wrestled with the thought of incorporating your business as a c-corporation, s-corporation, limited liability company (LLC) or some other form of limited liability. Incorporating provides you, the business owner, the ability to protect yourself in the event your business is liable for damages to another.
Businesses are particularly predisposed to lawsuits because of their ongoing interaction with and exposure to the public. If, for example, a product a business sells a customer hurts that customer, or if an individual is injured on business premises, incorporation would limit liability to that of the corporation or LLC and would prevent a business owner from being personally exposed to
Deciding to incorporate (as a c or s corporation) or organize (as an LLC) to limit your liability allows you, the business owner, to protect yourself. However, incorporating or organizing your business under the Secretary of State allows you to organize the structure of your business as the Secretary of State will often request a copy of your articles of incorporation/organization as set forth in Oregon Revised Statute (ORS)
If you do decide to incorporate/organize, it is important to choose the entity that will be most efficient for your business and ownership purposes and will take into account how your business will grow – that is, an LLC, an s-corporation, a c-corporation, limited partnership or perhaps some form of
A few things to keep in mind as a guide to building your corporate collective: single member LLCs can own shares in s-corporations but that other LLCs cannot; other s-corporations cannot own shares in other s-
Having a clear idea of the kind of business you intend to operate and a vision for how you would like to see it grow are good places to start when determining if and how you want to incorporate/organize.
Tim is an attorney and partner with Crawley LLP and an associate at the firm Preg O’Donnell & Gillett.