​WORD ON THE STREET

       Recently, the word on the street has it that anyone operating a real estate brokerage or property management business in the State of Oregon must be organized as an entity registered with the Secretary of State, Corporation Division.  Entities include corporations, sub-chapter S corporations, limited liability companies, general partnerships, limited liability partnerships and limited partnerships.
 
         The point of this gossip was that you may no longer operate your business as a sole proprietorship.  That is wrong.  You may operate as a sole proprietorship.
 
       We don’t know where this started.  Makes no difference.  There is no legal requirement established by the Real Estate Agency that you change from a sole proprietorship to any of the entities named above.  You may continue as a sole proprietorship or initially organize as such.
 
         On the other hand, do not misconstrue this as advice that you should organize as a sole proprietorship.  There are many reasons for organizing an entity such as liability protection, possible advantageous tax effects and continuity in case of incapacity.
 
         Be sure to discuss how you may benefit from using an entity with your attorney and CPA.  The benefits are likely to be significant, so have that discussion now.