PDX Web & Design Message Board › Freelancing in Portland

Freelancing in Portland

A former member
Post #: 1
I just moved here from Seattle, where I was doing freelance web design. I've been researching setting up a business in Oregon, but have had little luck in finding specific information about the freelancing case.

I'm running my business as a sole proprietorship. Thus far I have:
- Registered a DBA ("doing business as") with the Oregon Secretary of State
- Registered for a business license with the City of Portland / Multnomah County

Is there anything else I need to do? Does anyone have a good checklist for getting set up as a freelancer in Oregon, or Portland, specifically?

Thanks,
Corey
A former member
Post #: 16
Hi Corey,

I am a freelancer here in Portland too. So, far you have done the right stuff. There isn't really much else to do from a "setting up" standpoint. I have been here almost 3 years and things have gone well so far with doing the same two thing you did. But, I would see an accountant (or do some really good research) about taxes owed to the City of Portland for being self-employeed and working in the city of Portland. My accountant makes sure that is all covered, so I am afraid I can tell you the details...but at least I can tell you to be aware.

Beth
Brian P.
bpanulla
Portland, OR
Post #: 3
The only other item I can suggest is a Federal Tax ID if you don't already have one from Seattle. I filed for one using my Oregon DBA and use that rather than my SSN for tax reporting purposes with my clients. No sense sharing your personal SSN with anyone who doesn't really need to see it.

-B
A former member
Post #: 2
Beth & Brian, thanks for the replies! I'm also now considering switching from sole proprietor to LLC. Any suggestions / recommendations on who to talk to about that?

Thanks,
Corey
Brian P.
bpanulla
Portland, OR
Post #: 4
No suggestions here... had an LLC back in Pennsylvania, but don't know much about that in Oregon.
Minu
minuoh
Portland, OR
Post #: 1
Good thinking to start LLC. Protecting yourself from liabilities is always a good idea.
The sole member LLC formation is straight forward and frankly most any decent lawyers will be able to prepare the necessary docs for you. The whole process was a few hundred bucks for me.

One additional thing to think about is any tax consequences/benefits of filing as different entity type. For this you will need to locate a qualified CPA and receive consultation. Otherwise seems like you're on the right track - good luck!
Brian P.
bpanulla
Portland, OR
Post #: 6
I was advised against forming an LLC or other corporate entity if you're the only person working for it. From what I recall, the liability protection is weakened when you (or you and a spouse) are the only owner(s). In those situations "piercing the corporate veil"[1] is much easier, leading to personal liability - you lose your personal stuff (house, car, etc). Exactly what having an LLC was supposed to protect you from.

The result was that the overhead of being a legal entity, both startup costs and ongoing paperwork and procedural bureaucratic nonsense, was not worth the limited protection you were realistically afforded. The protection only becomes more meaningful if there are several owners involved, or if the entity owns actual property (land, buildings) and not just the computers and software as is typical for small consultants.

Anybody heard different?

Ob. disclaimer: IANAL[2]


[1] http://en.wikipedia.o...­
[2] I Am Not A Lawyer
Kory M.
korymcdow
Beaverton, OR
Post #: 2
I've heard different and I'll explain below. There's alot of meaty goodness in here that is situation-specific so I can't go into particulars. I can say that I would love to hear more about the advice you were given because I don't know where the number of people working for an entity determines how easy it is for the corporate veil to be pierced.

Where many people get into trouble is that the do not do ALL of the following:
- Register their business with the State, County, and/or City in which their business has its tax residence
- Use their business name with everything business-related
- Create a separate business-only checking account (using the formation docs filed with the State) that is only used for business expenses with verifiable receipts
- Get a Federal EIN for the business (using the formation docs filed with the State)
- Create Articles of Organization for the company
- and other things you can do to make your business (as a business) as credible as possible

So I would definitely suggest you do an LLC (and at least all of the things mentioned above). Just my 1.5 cents [1] (after taxes).

[1] reduced even more because I'm not a CPA or EA (Enrolled Agent, they are just as qualified to give tax advice).
Kory M.
korymcdow
Beaverton, OR
Post #: 3
And since I'm in here...

LLC is a state-designated term and Sole Proprietor is a federal-designated term.
You can form a 1-person member (or manager)-managed LLC with the State of Oregon and choose to be taxed as a Sole Proprietor with the Feds.
You can form a 2-person LLC and choose to be taxed as a Partnership (Form 1065) or Corporation (1120/1120S).

These are just examples, but the route I like to take is to form a LLC (on the State level) and determine (with the help of your professional tax advisor - CPA or EA) which route is the best to take for the Feds.

Be easy.
Brian P.
bpanulla
Portland, OR
Post #: 7
Good to hear! That definitely speaks to getting professional advice :) I am referring to legal advice I got for my last company (c.2000-2003) in Pennsylvania.. and the state change is a likely a major factor in this.

Going to have some conversations with folks here in Oregon to see if I need to change how I go about things...
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