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New Higher Standards for Oregon Corporation and LLC Formations

January 24, 2018

Effective January 1, 2018, business entities are required to provide more detailed information when filing documents related to formation, conversion, or mergers.

 

Up until this year, Oregon had a fairly loose procedure for business formation. In fact, when the Panama Papers exposed a number of shell companies in the US, Oregon was right up there with Delaware and Wyoming for ease of corporate filing. Now, with the House Bill 2191 taking effect, the Secretary of State requires more detailed information when forming business entities.

 

In the initial filing, corporations and LLCs must now provide a principal place of business, which must be a physical street address, and not a commercial mail-receiving agency (like a UPS/FedEx facility). Previously, new businesses had until the first renewal to provide a physical address—now, it must be disclosed up front.

 

Most importantly, a specific “individual with knowledge” must be identified in the initial filing. This person must have direct knowledge of the operations and business activities of the corporation.

 

Finally, the signer of the articles of incorporation/organization must agree to more specific terms declaring that the document is true, is free of fraud, and that false statements contained within the document may be penalized by fines and/or imprisonment.

 

These changes allow the Secretary of State to more easily investigate potential violations, and permit the court to dissolve a business that it finds was used as a shell company or used for illegal purposes.

 

All in all, these changes should protect the public from sham businesses and are only a minor inconvenience for standard filings.

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