ORS 58.185
Liabilities of employees, shareholders and the corporation


(1)

As used in this section:

(a)

“Licensed Oregon shareholder” means a shareholder of a professional corporation who holds a license to render the specified professional services of the corporation and who practices more than incidentally in this state.

(b)

“Specified professional services” means, for each professional corporation, the professional service or services to be rendered through the professional corporation as specified in its articles of incorporation.

(2)

This chapter does not affect the law applicable to the professional relationship between a person rendering professional service or services and a person receiving the service or services, and it does not affect the standards of professional conduct of a profession.

(3)

In the rendering of specified professional services on behalf of a domestic professional corporation to a person receiving the service or services, a shareholder of the corporation is personally liable as if the shareholder were rendering the service or services as an individual, only for negligent or wrongful acts or omissions or misconduct committed by the shareholder, or by a person under the direct supervision and control of the shareholder.

(4)

A licensed Oregon shareholder of a domestic professional corporation shall be jointly and severally liable with all other licensed Oregon shareholders of the corporation only for the negligent or wrongful acts or omissions or misconduct committed in the rendering of specified professional services on behalf of the corporation to persons who were intended to benefit from the service or services.

(5)

Joint and several liability under subsection (4) of this section shall be only for professional services rendered on behalf of the corporation that affect a claim, transaction or proceeding in this state. A licensed Oregon shareholder shall not be jointly and severally liable for the negligent or wrongful acts or omissions or misconduct committed in this state by an employee or shareholder who is not licensed to render the specified professional services in this state where the acts or omissions or misconduct are committed only incidentally in this state and affect only a claim, transaction or proceeding in another state. Joint and several liability under subsection (4) of this section for all claims made against a licensed Oregon shareholder during a calendar year shall not exceed $300,000. The total joint and several liability under subsection (4) of this section for a single claim made against one or more licensed Oregon shareholders of a domestic professional corporation during a calendar year shall not exceed $2 million. If the number of licensed Oregon shareholders of a domestic professional corporation multiplied by $300,000 equals an amount that is less than $2 million, the total joint and several liability for a single claim made against one or more licensed Oregon shareholders of that professional corporation during a calendar year shall not exceed an amount equal to $300,000 multiplied by the number of licensed Oregon shareholders. The joint and several liability described in subsection (4) of this section applies only to those licensed Oregon shareholders who are shareholders at the time the negligent or wrongful acts or omissions or misconduct occurred. Two or more claims arising out of a single negligent or wrongful act or omission or misconduct or arising out of a series of related negligent or wrongful acts or omissions or misconduct shall be considered to have been first made at the time the earliest claim arising out of any such negligent or wrongful act or omission or misconduct was first made. A claim shall be considered made when the earliest of the following occurs:

(a)

When a legal or equitable proceeding, including arbitration, mediation or a similar proceeding is filed or initiated; or

(b)

When the professional corporation or any shareholder receives notice of a claim.

(6)

In the rendering of specified professional services on behalf of a foreign professional corporation to a person receiving the service or services, a shareholder of the corporation is personally liable as if the shareholder were rendering the service or services as an individual, only for negligent or wrongful acts or omissions or misconduct committed by the shareholder, or by a person under the direct supervision and control of the shareholder.

(7)

A licensed Oregon shareholder of a foreign professional corporation shall be jointly and severally liable with all other licensed Oregon shareholders of the corporation only for the negligent or wrongful acts or omissions or misconduct that affect a claim, transaction or proceeding in this state committed in the rendering of the specified professional services on behalf of the corporation to persons who were intended to benefit from the service or services.

(8)

Joint and several liability under subsection (7) of this section shall be only for professional services rendered on behalf of the corporation that affect a claim, transaction or proceeding in this state. A licensed Oregon shareholder shall not be jointly and severally liable for the negligent or wrongful acts or omissions or misconduct committed in this state by an employee or shareholder who is not licensed to render the specified professional services in this state where the acts or omissions or misconduct are committed only incidentally in this state and affect only a claim, transaction or proceeding in another state. Joint and several liability under subsection (7) of this section for all claims made against a licensed Oregon shareholder during a calendar year shall not exceed $300,000. The total joint and several liability under subsection (7) of this section for a single claim made against one or more licensed Oregon shareholders of a foreign professional corporation during a calendar year shall not exceed $2 million. If the number of licensed Oregon shareholders of a foreign professional corporation multiplied by $300,000 equals an amount that is less than $2 million, the total joint and several liability for a single claim made against one or more licensed Oregon shareholders of that foreign professional corporation during a calendar year shall not exceed an amount equal to $300,000 multiplied by the number of licensed Oregon shareholders. The joint and several liability described in subsection (7) of this section applies only to those licensed Oregon shareholders who are shareholders at the time the negligent or wrongful acts or omissions or misconduct occurred. Two or more claims arising out of a single negligent or wrongful act or omission or misconduct or arising out of a series of related negligent or wrongful acts or omissions or misconduct shall be considered to have been first made at the time the earliest claim arising out of any such negligent or wrongful act or omission or misconduct was first made. A claim shall be considered made when the earliest of the following occurs:

(a)

When a legal or equitable proceeding, including arbitration, mediation or a similar proceeding is filed or initiated; or

(b)

When the professional corporation or any shareholder receives notice of a claim.

(9)

The proceeds from any insurance policy maintained by a domestic or foreign professional corporation for the purpose of protecting the professional corporation, its shareholders or employees from liability arising from the negligent or wrongful acts or omissions or misconduct of shareholders or employees in connection with the rendering of the specified professional services shall first be applied to the joint and several liability of licensed Oregon shareholders who do not have liability under subsection (3) or (6) of this section. If the proceeds are not sufficient to satisfy the joint and several liability of the licensed Oregon shareholders who do not have liability under subsection (3) or (6) of this section, the insurance proceeds shall be applied on a pro rata basis to reduce the joint and several liability of such licensed Oregon shareholders.

(10)

Notwithstanding subsections (3) to (9) of this section, the corporation shall be liable for its acts in the same manner and to the same extent as any corporation organized under the Oregon Business Corporation Act. However, the shareholders, directors, officers, employees and agents of the corporation are not personally liable for the debts or other contractual obligations of the corporation, except as provided in ORS 60.151 (Liability of shareholders) (1).

(11)

A shareholder of a professional corporation shall not be jointly and severally liable solely by reason of being a shareholder of such professional corporation except as expressly provided in this section. [1969 c.592 §15; 1987 c.94 §18; 1993 c.235 §9; 1995 c.684 §1; 1997 c.774 §7]

Source: Section 58.185 — Liabilities of employees, shareholders and the corporation, https://www.­oregonlegislature.­gov/bills_laws/ors/ors058.­html.

Attorney General Opinions

Propriety of tax preparer, licensed under ORS chapter 673, owning professional corporation, (1978) Vol 38, p 690

Law Review Citations

32 WLR 147 (1996)

58.005
Short title
58.015
Definitions
58.035
Application to persons licensed to render professional services
58.037
Application to joint and several liability of shareholders of corporation organized under ORS chapter 60 for purpose of rendering professional services
58.045
Application of general corporation law and merger and conversion provisions
58.048
When appearance by attorney not required
58.076
Purposes for which professional corporation may be organized
58.085
Who may incorporate
58.087
When restatement of articles of incorporation required
58.101
Term of office for directors
58.115
Corporate name
58.129
Requirements to transact business in this state
58.134
Application for authority to transact business
58.136
Amended application for authority to transact business
58.141
Rights and duties of foreign professional corporation and shareholders
58.156
Method by which professional corporation to render services
58.165
Fees collected by corporation
58.185
Liabilities of employees, shareholders and the corporation
58.187
Revision of limitations on liability in ORS 58.185 to reflect inflation or deflation
58.196
Limits on merger
58.205
Corporation prohibited from doing acts prohibited to professional licensee
58.225
Annual reports
58.300
Redemption of shares
58.325
Application to professional licensing agencies
58.335
Filing of documents with professional licensing agency
58.345
Registration and renewal with professional licensing agency
58.355
Suspension, revocation or refusal of certificate of registration
58.365
Oregon State Bar as regulating board for attorneys
58.367
Authority of regulatory board to establish rules affecting professional corporation
58.369
Application of chapter to practice of dentistry
58.375
Requirements for professional corporations organized to practice medicine
58.376
Requirements for professional corporations organized to render professional health care services
58.377
Transferee of shares
58.379
Powers of professional corporation organized to practice medicine
58.381
Proxies
58.383
Issuance, sale, transfer and redemption of shares
58.385
Disqualification of physician
58.387
Disposition of shares of deceased shareholder
58.389
Price for purchase or redemption of shares of disqualified or deceased shareholder
58.400
Filing requirements
58.410
Filing, service, copying and certification fees
58.420
Effective time and date of document
58.430
Correcting filed document
58.440
Forms
58.450
Filing duty of Secretary of State
58.455
Penalty for signing false document
58.460
Appeal from Secretary of State’s refusal to file document
58.470
Evidentiary effect of copy of filed document
58.480
Certificate of existence or authorization
58.490
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