Professional Corporation / PLLC Formation Packet — Oregon

Professional Corporation / PLLC Formation Packet — Oregon

This packet helps a licensed Oregon professional (1) choose between a Professional Corporation (PC) under ORS ch. 58 and a limited liability company rendering professional services under ORS ch. 63 (authorized by ORS 63.074), (2) confirm purpose and ownership-licensure rules, (3) satisfy registration with the professional licensing agency, and (4) file the correct document with the Oregon Secretary of State, Corporation Division.

Quick-Reference Summary

Part 1 — Choosing the PC (ch. 58) vs. the LLC (ch. 63)

Because ORS 63.074(2) imports the ORS 58.185 professional-liability framework into professional LLCs, the professional-liability exposure of an LLC member and a PC shareholder is intended to be the same. The choice generally turns on tax planning, management structure, and your board's rules. Confirm your profession may use the LLC form under its licensing law before choosing ch. 63.

Part 2 — Pre-Filing Checklist

License Verification

☐ Each incorporator / organizer holds a current, active Oregon license to render [________________________________] (professional service)
☐ Each proposed shareholder/member is licensed to render the specified professional service (ORS 58.085 / 58.383; the profession's law for an LLC)
☐ License numbers verified with the professional licensing agency
☐ No disqualifying disciplinary action pending against any owner

Licensing-Agency Registration

☐ Confirmed registration requirement with the professional licensing agency under ORS 58.345 (PC) or the profession's rules (LLC)
☐ Attorneys: confirmed the Oregon State Bar is the regulating board (ORS 58.365)
☐ Confirmed your profession may render services through an ORS ch. 63 LLC (if forming an LLC)

Name and Designation

☐ Name availability searched with the Oregon Secretary of State, Corporation Division
☐ PC name includes "professional corporation," "P.C.," or "Prof. Corp." (ORS 58.115)
☐ LLC name includes "limited liability company," "L.L.C.," or "LLC" (ORS 63.094)

Agent, Fee, and Insurance

☐ Oregon registered agent designated with an Oregon registered office
☐ Filing fee confirmed ($100 PC / $100 LLC); annual report fee ($100) calendar set on the formation anniversary
☐ Professional liability / malpractice insurance obtained or confirmed (board-required limits; relevant to ORS 58.185 allocation)
☐ Federal EIN obtained from the IRS

Part 3 — Articles of Incorporation — Professional Corporation (ORS ch. 58)

ARTICLES OF INCORPORATION OF [CORPORATION NAME], P.C.

The undersigned incorporator(s), each licensed to render the professional service stated below in the State of Oregon, adopt these Articles of Incorporation under the Oregon Professional Corporation Act, ORS ch. 58.

Article I — Name

The name of the professional corporation is [________________________________], which contains a designation required by ORS 58.115:

• ☐ "Professional Corporation"
• ☐ "P.C."
• ☐ "Prof. Corp."

Article II — Specified Professional Services (Purpose)

The corporation is organized for the purpose of rendering the professional service(s) of [________________________________] (the "specified professional services," ORS 58.185(1)(b)) and services ancillary thereto, as permitted by ORS 58.076. The corporation shall render the specified professional services only through a person licensed to render them (ORS 58.156).

Article III — Registered Agent and Office

The registered agent is [________________________________]; the registered office is [________________________________], Oregon [____].

Article IV — Capital Stock

The corporation is authorized to issue [____] shares of [common] stock, [par value $[____] per share / no par value].

Article V — Incorporator(s) (Licensed Persons — ORS 58.085)

Article VI — Directors / Shareholders (Licensed Persons)

Each shareholder, and each director who renders the specified professional services, is licensed in Oregon to render those services.

Article VII — Professional Licensing and Liability

A. Each shareholder, director, and officer who renders the specified professional services shall maintain a current, active Oregon license.
B. The corporation shall render the specified professional services only through licensed persons (ORS 58.156); the corporation shall not do any act prohibited to an individual licensee (ORS 58.205).
C. A shareholder is personally liable only for the shareholder's own negligent or wrongful acts or those of persons under the shareholder's direct supervision, with the joint-and-several limits and insurance-allocation rules of ORS 58.185; a shareholder is not otherwise personally liable for the corporation's debts (ORS 58.185(10)–(11), 60.151(1)).

Article VIII — Share-Transfer Restriction (Ownership Limited to Licensed Persons)

A. Shares may be issued, sold, transferred, or redeemed only as permitted by ORS 58.383, and only to persons licensed to render the specified professional services. Any issuance or transfer in violation of ORS ch. 58 is ineffective.
B. Mandatory buy-back / disposition on death or disqualification. Upon the death of a shareholder, or a shareholder ceasing to be licensed or otherwise becoming disqualified, the shares shall be disposed of to the corporation or to a licensed person as provided in these Articles, the bylaws, or a shareholders' agreement; absent such provision, the statutory default disposition applies (ORS 58.387 for medical PCs; price under ORS 58.389). The corporation shall complete the purchase or redemption within [____] days / the statutory period at:

• ☐ The price under ORS 58.389
• ☐ Book value as of the most recent fiscal year-end
• ☐ Fair market value by independent appraisal
• ☐ Formula in the shareholders' agreement
  C. Each stock certificate shall bear a legend reflecting these restrictions.

Article IX — Registration with Professional Licensing Agency

The corporation shall register and renew with the applicable professional licensing agency as required by ORS 58.345 (for attorneys, the Oregon State Bar under ORS 58.365).

Part 4 — Articles of Organization — LLC Rendering Professional Services (ORS ch. 63 / § 63.074)

ARTICLES OF ORGANIZATION OF [COMPANY NAME], LLC

The undersigned organizer(s), each licensed to render the professional service stated below in the State of Oregon, form a limited liability company under ORS ch. 63 to render professional service as authorized by ORS 63.074.

Article I — Name

The name of the company is [________________________________], containing a designation required by ORS 63.094:

• ☐ "Limited Liability Company"
• ☐ "L.L.C." / "LLC"

Article II — Professional Purpose

The company is organized to render the professional service of [________________________________] and services ancillary thereto, subject to the laws of Oregon, the rules of the regulating board of the profession, and the standards of professional conduct of the profession (ORS 63.074(2)). A business required to be organized only under another statute may not be organized under ORS ch. 63 (ORS 63.074(3)).

Article III — Registered Agent and Office

The registered agent is [________________________________]; the registered office is [________________________________], Oregon [____].

Article IV — Members / Managers (All Licensed)

Management is vested in [its members / one or more managers]. Each member, and any manager who renders the professional service, is licensed in Oregon to render that service.

Article V — Member Professional Liability (ORS 63.074(2))

Members of the company who are professionals, including members who are managers, are personally liable to the same extent and in the same manner as shareholders of a professional corporation under ORS 58.185 and 58.187; the company is otherwise liable for its acts to the same extent as any LLC.

Article VI — Membership-Interest Transfer Restriction (Ownership Limited to Licensed Persons)

A. Membership interests may be issued and transferred only to persons licensed to render the same professional service, as required by the profession's licensing law and board rules.
B. Mandatory buy-back on death or disqualification. Upon the death of a member, or a member ceasing to be licensed or otherwise becoming disqualified, the membership interest shall be acquired by the company or transferred to a licensed person within [____] days at [book value / fair market value / agreed formula]; the disqualified member or estate may not participate in decisions concerning the professional service.
C. These restrictions shall be set forth in the operating agreement and the company's records.

Part 5 — Licensing-Agency Registration Block and Signatures

PROFESSIONAL LICENSING-AGENCY REGISTRATION (ORS 58.345 / profession's rules)

☐ Registration filed — [ENTITY NAME] is registered with the [________________________________] (licensing agency) to render [________________________________] (professional service). Certificate/registration no.: [____________]; date: [__/__/____].
☐ Attorneys — Registered with the Oregon State Bar as the regulating board (ORS 58.365).
☐ LLC — Confirmed authority and any registration with the profession's board under ORS 63.074.

Agency Representative: [________________________________] Title: [________________________________]
Date: [__/__/____]

Incorporator(s) — Professional Corporation

Organizer(s) — Limited Liability Company

Post-Formation Checklist

☐ Articles filed with Oregon Secretary of State, Corporation Division (PC Articles of Incorporation $100 / LLC Articles of Organization $100)
☐ Registered with the professional licensing agency (ORS 58.345) / Oregon State Bar (attorneys), or confirmed LLC authority under ORS 63.074
☐ Federal EIN obtained; bank account opened in the entity's legal name
☐ Bylaws (PC) or operating agreement (LLC) adopted with transfer restrictions and death/disqualification buy-back terms
☐ Stock certificates (PC) issued with restrictive legend; LLC records reflect transfer restriction
☐ Professional liability insurance bound at board-required limits (supports ORS 58.185 allocation)
☐ Annual report calendar set ($100, on formation anniversary)
☐ Internal procedure to monitor licensure and trigger disposition on death/disqualification (ORS 58.387/58.389 for medical PCs)

Sources and References

• ORS ch. 58 (Professional Corporations) — section list — https://oregon.public.law/statutes/ors_chapter_58
• ORS 58.115 (Corporate name — "professional corporation," "P.C.," "Prof. Corp.") — https://oregon.public.law/statutes/ors_58.115
• ORS 58.185 (Liabilities of employees, shareholders and the corporation) — https://oregon.public.law/statutes/ors_58.185
• ORS 58.387 (Disposition of shares of deceased shareholder) — https://oregon.public.law/statutes/ors_58.387
• ORS 63.074 (Purposes; LLC or members may render professional service) — https://oregon.public.law/statutes/ors_63.074
• Oregon Secretary of State — Business Registry Fee Schedule ($100 Articles; $100 annual report) — https://sos.oregon.gov/business/Documents/business-registry-forms/br-fee-schedule.pdf
• Oregon Secretary of State — Business (Laws and Rules) — https://sos.oregon.gov/business/Pages/laws-rules.aspx
• Oregon State Bar Professional Liability Fund, "Choice of Entity for Legal Practice in Oregon" — https://assets.osbplf.org/forms/practice_forms/choice-of-entity-for-legal-practice-in-oregon.pdf