To start a sole proprietorship in Oregon, you don’t file anything with the state to create the business itself: you become a sole proprietor the moment you begin doing business as an individual. The practical setup is a short list. Register an Assumed Business Name with the Secretary of State if you’ll use a trade name, line up any industry or local licenses your work requires, get the tax ID numbers you need, and plan for how you’ll pay federal and Oregon taxes on the income.1Oregon Secretary of State. Assumed Business Name – New Registration
What You’re Actually Signing Up For
A sole proprietorship is the default structure for a one-person business, and it’s the simplest to run. There’s a trade-off worth understanding before you commit to it: there is no legal wall between you and the business. Debts the business takes on and lawsuits filed against it can reach your personal bank accounts, your home, and your other property.2U.S. Small Business Administration. Get Business Insurance If that exposure concerns you given the kind of work you’ll do, forming an LLC is the alternative to weigh before you go further.
When You Need to Register an Assumed Business Name
Oregon law requires you to register an Assumed Business Name (ABN) any time you conduct business under a name that doesn’t clearly show your real name. Under the statute, your “real and true name” means your surname paired with your given names or initials.3Oregon State Legislature. Oregon Revised Statute Chapter 648 – Assumed Business Names If you are Jane Smith and you operate as “Jane Smith Consulting,” no registration is needed. If you operate as “Emerald City Consulting,” you must register.
Before you commit to a name, search the Oregon Secretary of State’s online business name database to confirm it isn’t already taken.4Oregon Secretary of State. Business Name Search Oregon requires your name to be distinguishable from existing registrations, and a conflict will force you to refile and pay again.
Skipping the registration has teeth. Under ORS 648.135, a business operating under an unregistered assumed name loses standing to file lawsuits related to that business in Oregon courts, and anyone you do business with can recover at least $500 or their actual costs of tracking down your real identity, whichever is greater.3Oregon State Legislature. Oregon Revised Statute Chapter 648 – Assumed Business Names You can register at any time to cure the problem going forward.
Filing the ABN
Registration costs $50 and runs through the Oregon Secretary of State’s Corporation Division.5Oregon Secretary of State. Business Registry Fee Schedule The fastest route is the Oregon Business Registry portal online, which takes a credit or debit card and confirms your filing immediately. You can also mail or fax the paper form with payment.7Oregon Secretary of State. Assumed Business Name – New Registration
Have these ready before you start the form:
All owners must sign.6Oregon Secretary of State. Assumed Business Name – New Registration Instructions
An ABN is good for two years. You renew within the 30 days before the second anniversary of your registration date, and again every two years after that; the Secretary of State mails a renewal notice to your authorized representative at least 30 days ahead of the deadline.3Oregon State Legislature. Oregon Revised Statute Chapter 648 – Assumed Business Names Miss the window without paying and the state cancels the registration without further notice, which puts you back in the unregistered-name position described above.
Industry Licenses and Local Permits
The ABN doesn’t give you permission to do a particular kind of work. That comes from whichever state board regulates your industry, and from your city or county.
Construction contractors must be licensed through the Oregon Construction Contractors Board, which requires a surety bond and proof of general liability insurance.8Oregon Construction Contractors Board. CCB License Landscaping contractors fall under the Landscape Contractors Board. Selling alcohol or recreational cannabis requires licensing from the Oregon Liquor and Cannabis Commission. If any of this touches your work, check with the relevant board before you take on jobs.
Many Oregon cities and counties also require a general business license, and local zoning rules can limit what you’re allowed to do from a residential address. Some municipalities allow home-based businesses freely; others restrict customer traffic, signage, or the type of work entirely. Call your city or county clerk’s office before you set up shop at home.
Tax Identification Numbers
A sole proprietor can generally use a Social Security number for tax purposes. Two situations change that.
If you plan to hire employees, you need a federal Employer Identification Number (EIN) from the IRS. Apply with Form SS-4; the online application returns an EIN immediately.9Internal Revenue Service. About Form SS-4, Application for Employer Identification Number (EIN) Some sole proprietors without employees also get an EIN so they don’t have to hand their Social Security number to clients and vendors.
If you have employees working in Oregon, you also register with the Oregon Department of Revenue for a Business Identification Number (BIN), which serves as your employer account for Oregon payroll taxes.10Oregon Department of Revenue. Withholding and Payroll Tax A sole proprietorship with no employees doesn’t need an EIN or BIN unless a specific tax program such as the lodging tax requires one.11Oregon Department of Revenue. Registering Your Business With Oregon Tax Programs
How Your Taxes Will Work
There is no separate business tax return for a sole proprietorship. You report business income and expenses on Schedule C and attach it to your personal Form 1040 each year.12Internal Revenue Service. About Schedule C (Form 1040), Profit or Loss From Business (Sole Proprietorship)
On top of regular income tax, you owe self-employment tax on net earnings of $400 or more. The rate is 15.3%: 12.4% for Social Security and 2.9% for Medicare.13Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) The Social Security portion applies only to the first $184,500 of combined wages and net self-employment earnings in 2026.14Social Security Administration. Contribution and Benefit Base The Medicare portion has no cap. Report self-employment tax on Schedule SE with your 1040.
Because no employer withholds for you, you typically owe quarterly estimated taxes to the IRS. The 2026 due dates are April 15 for January–March income, June 15 for April–May, September 15 for June–August, and January 15, 2027 for September–December. Missed deadlines trigger underpayment penalties, so many sole proprietors set aside a percentage of each payment as it comes in.15Internal Revenue Service. Estimated Tax
On the state side, Oregon has no general sales tax, so you won’t collect or remit it on goods or services.16Oregon Department of Revenue. Sales Tax in Oregon Your business income flows through to your personal Oregon return.11Oregon Department of Revenue. Registering Your Business With Oregon Tax Programs One Oregon tax to keep an eye on as you grow is the Corporate Activity Tax (CAT), which applies to businesses, including sole proprietorships, with more than $1 million in taxable Oregon commercial activity. Above that threshold, the tax is $250 plus 0.57% of commercial activity over $1 million.17Oregon Department of Revenue. Corporate Activity Tax (CAT) Most new sole proprietors stay well below it, but track gross receipts so you’ll know if you cross the line.
If You Plan to Hire Employees
A single hire triggers a stack of new obligations on top of getting an EIN and BIN.
Federally, you complete Form I-9 to verify each employee’s work eligibility within three business days of their start date.18U.S. Citizenship and Immigration Services. Instructions for Form I-9, Employment Eligibility Verification You also owe the Federal Unemployment Tax (FUTA), 0.6% on the first $7,000 of each employee’s wages after the standard credit.19Employment and Training Administration. FUTA Credit Reductions
In Oregon, you withhold the statewide transit tax, currently one-tenth of one percent (0.1%), from every employee’s wages.20Oregon Department of Revenue. Statewide Transit Tax You also participate in Paid Leave Oregon. The 2026 contribution rate is 1% of wages up to $184,500 per employee, split 60% employee and 40% employer for businesses with 25 or more employees. If you have fewer than 25 employees, you aren’t required to pay the employer share, but you still withhold and remit the employee portion.21Paid Leave Oregon. What Employers Need to Do Workers’ compensation insurance is required for most Oregon employers; the rate depends on your industry and payroll, with low-risk office work costing far less than trades like construction.
Open a Business Bank Account
Oregon doesn’t require a separate account for a sole proprietorship, but opening one makes everything else easier. A dedicated account cleans up your Schedule C recordkeeping, keeps business and personal funds visibly separate, and gives you a clearer paper trail if you’re ever audited or decide to convert to an LLC.22U.S. Small Business Administration. Open a Business Bank Account Most banks will open a business checking account with your ABN registration and either your EIN or Social Security number, so this is a reasonable last step once your name is registered and your tax IDs are in hand.