To start a therapy practice in Oregon, follow these seven steps:
- Check local zoning regulations
- Register a business name
- Choose a business structure
- Register your business
- Obtain relevant licenses
- Get insurance
- Start paying taxes
If you’re moving your practice from a different state, there’s an eighth step you’ll need to follow: Figuring out how to pay taxes in multiple states.
This article covers the bare essentials needed to get your therapy practice up and running in the Beaver State. For advice on budgeting, marketing your practice, and billing your clients, check out our general guide, How to Start a Therapy Practice.
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Check local zoning regulations in Oregon
Oregon boasts 36 counties and 241 incorporated cities. Before you settle on a location for your therapy practice—even if that location is your own home—you must make sure the local zoning allows you to operate there.
In cases where you aren’t typically allowed to operate a business in a certain area—for instance, a home business in a residential area—you can apply for a zoning variance. A variance is more or less an exception to zoning laws.
For information on whether you need to apply for a variance, what types of zoning your town or city recognizes, and what kind of business you can perform there, contact your local municipality.
Register a business name in Oregon
In Oregon, it costs $50 to register an assumed name for your business. The fastest and easiest way to register your business name is through the Oregon Secretary of State Secure Access System.
If you’re a sole proprietor planning to do business under a name different from your “real and true” name—that is, your personal name as it appears on legal documents—you must register an assumed name. General partnership names must include the names of all partners, or else register an assumed name.
Before registering a name, check its availability. Note that, while Oregon’s name search tool allows you to search at the state level, since names are registered on a county by county basis, it’s possible for multiple businesses with the same name to operate, but in different counties. When you register your business name, you can opt to have it registered in all counties at no extra charge.
Choose a business structure recognized by the State of Oregon
Each state recognizes—and registers—different business structures (aka “entity types”). Your practice’s business structure affects how its income is taxed and who may own shares of the practice.
In Oregon, the business structures you can choose from are:
- Sole proprietorship
- General partnership
- Business corporation
- Limited liability company (LLC)
- Limited partnership (LP)
- Limited liability partnership (LLP)*
*Only individuals working in regulated professions—including mental healthcare workers—may form LLPs.
This list is just an introduction. Before settling on a business structure, talk to your accountant—and, if necessary, a lawyer—for help choosing the right one.
For more information, check out our article How to Choose a Business Entity for Your Therapy Practice.
Sole proprietorship
When you go into business for yourself, you’re considered a sole proprietor by default. As a sole proprietorship, your business is identical with your person: all revenue is your revenue, all losses are your losses.
Sole proprietorships are the simplest form of business structure, but offer nothing in the way of legal or financial protection.
General Partnership (GP)
In a general partnership, all members are general partners—meaning, they all share legal and financial liability equally.
Business Corporation
A business corporation is a typical corporation as we know it: It exists separately from its owners, who own shares in it. There are two types: C corporations and S corporations. C corporations may elect S corporation status by filing IRS Form 2553.
C corporations have their income taxed separately from the income of the shareholders. S corporations pass on the tax liability to each shareholder. (For a variety of reasons, Heard recommends its clients form S corporations at the federal level.)
Limited Liability Company (LLC)
The LLC business structure offers liability protection similar to a corporation, but with the option to be taxed in different ways. Your accountant may recommend you elect to be taxed as either an S corporation or a partnership.
Limited Partnership (LP)
A limited partnership offers some liability protection for some of its members. To operate as a limited partnership, at least one individual acts as a general partner, who heads the company and makes major decisions, while at least one other individual acts as a limited partner, who does not.
General partners have unlimited liability—they are personally liable for the partnership’s debts, legal proceedings, and so on. Limited partners are only liable for their controlling share of the partnership.
Limited Liability Partnership (LLP)
Unlike a limited partnership, none of the members of an LLP are limited partners. In this case, “limited” refers to the liability assumed by the partnership as a whole in case one of its members is sued for malpractice. In Oregon, individuals who practice regulated professions may form LLPs. That includes therapists.
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Register your therapy practice in Oregon
To register your business in Oregon, you need to do two things:
- File the business registration with the State
- Pay the filing fee. For a complete list of fees, see the Business Registration Fee Schedule.
Here’s a breakdown for each of the business structures covered in section 3 above.
Form a sole proprietorship in Oregon
Filing fees: No cost to form, fees apply to register an assumed name
Aside from registering an assumed name, there are no extra steps you need to take in order to form a sole proprietorship in Oregon.
Form a general partnership in Oregon
Filing fees: No cost to form, fees apply to register an assumed name
Aside from registering an assumed name, there are no extra steps you need to take in order to form a general partnership in Oregon. Consider drafting a partnership agreement in order to easily resolve any future disputes between partners.
Incorporate in Oregon
Filing fees: $100 to file Articles of Incorporation
- Choose a business name
- Appoint a registered agent. This person must be over 18 and have an address within the state. They’re responsible for receiving all official communications from the State.
- File your Articles of Incorporation and pay the fee using the Oregon Secretary of State Secure Access System.
Once you’ve incorporated in Oregon, you can elect S corporation status by filing IRS Form 2553.
Register a Limited Liability Company (LLC) in Oregon
Filing fees: $100 to file Articles of Organization
- Choose a business name
- Appoint a registered agent. This person must be over 18 and have an address within the state. They’re responsible for receiving all official communications from the State.
- File your Articles of Organization and pay the fee using the Oregon Secretary of State Secure Access System.
Register a Limited Partnership (LP) in Oregon
Filing fees: $100 to file a Certificate of Partnership
- Choose a business name
- Appoint a registered agent. This person must be over 18 and have an address within the state. They’re responsible for receiving all official communications from the State.
- File a Certificate of Partnership and pay the fee using the Oregon Secretary of State Secure Access System.
- Draft a partnership agreement. This isn’t required by law in the State of Oregon, but it will help you stay organized and settle any disputes between partners.
Register a Limited Liability Partnership (LLP) in Oregon
Filing fees: $100 to file a Certificate of Partnership
- Choose a business name
- Appoint a registered agent. This person must be over 18 and have an address within the state. They’re responsible for receiving all official communications from the State.
- File a Certificate of Partnership and pay the fee using the Oregon Secretary of State Secure Access System.
- Draft a partnership agreement. This isn’t required by law in the State of Oregon, but it will help you stay organized and settle any disputes between partners.
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Get business licenses and permits for your therapy practice in Oregon
To operate in Oregon, your therapy practice may require licenses or permits. These are handled at the federal, state, and local levels.
Luckily, therapy practices do not need any special federal permits or licenses to operate in Oregon. And, outside of standard licensure for mental health practitioners, they also do not require permitting or licensing at the state level.
At the local level—meaning your municipality (town, city, etc.), you may be required to purchase a business license to operate. Contact your local permitting office for details.
You can do a search of all 1,500 licenses administered at the State level using Oregon’s License Directory.
Get business insurance for your therapy practice in Oregon
The following types of business insurance are highly recommended for therapy practices operating in Oregon:
- General liability insurance
- Commercial property insurance
- Business income insurance
- Professional liability insurance
- Oregon worker’s compensation insurance
While shopping for insurance, look for a business owner’s policy (BOP). A BOP typically includes the three core types of insurance coverage: general liability, commercial property, and business income.
General liability insurance protects you in case of any damages you cause to someone else’s property or person. Since the State of Oregon puts no cap on liability lawsuit rewards, it’s important to make sure you’re well-covered. Aim for at least $1 million coverage.
Commercial property insurance protects property your therapy practice owns, like computers, business phones, or office furniture. It also protects the building where you operate, whether owned or rented.
Business income insurance covers you for loss of income due to specific circumstances. These include natural disasters, such as fire or storm damage; and man-made disasters, like theft.
Professional liability insurance covers you in case you are sued for libel or slander, for mishandling patient records, for providing inaccurate advice, or for otherwise causing harm in the process of practicing your profession.
If you have employees, you’re legally required to cover them with Oregon worker’s compensation insurance. This pays for medical expenses, lost wages, and ongoing care in the event one of your employees is injured on the job.
Prepare to pay taxes in Oregon
Every business earning income in Oregon is required to pay state taxes. If you owe over $1,000 in state taxes, you’re required to pay that amount in quarterly installments.
Wondering how to get started? Check out How to Pay Income Tax in Every State as a Therapist.
Learn how to pay taxes in multiple states
If you started your therapy practice in a different state, and you’re moving to Oregon—or if you operate in Oregon, and you’re planning to move to a different state—you’ll need to figure out how to pay taxes in multiple states.
The rules vary depending on which states you operate in over the course of the year, and how long you spend in each. Check out how moving to a different state impacts your taxes as a therapist.
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Want to learn more? Check out our guide on how to start a therapy practice.
This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult their own attorney, business advisor, or tax advisor with respect to matters referenced in this post.
Bryce Warnes is a West Coast writer specializing in small business finances.
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