Oregon Statutes 58.185 – Liabilities of employees, shareholders and the corporation
(1) As used in this section:
Terms Used In Oregon Statutes 58.185
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- domestic professional corporation: means a corporation organized under this chapter for the specific purpose of rendering professional service or services and for such other purposes provided under this chapter. See Oregon Statutes 58.015
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Foreign professional corporation: means a professional corporation organized under laws other than the laws of this state. See Oregon Statutes 58.015
- License: includes a license, certificate of registration, permit or other legal authorization required by law as a condition precedent to the rendering of professional service or services within this state. See Oregon Statutes 58.015
- Person: includes individuals, corporations, associations, firms, partnerships, limited liability companies and joint stock companies. See Oregon Statutes 174.100
- Professional service: means personal service or services rendered in this state to the public which may be lawfully rendered only pursuant to a license by a professional. See Oregon Statutes 58.015
(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 (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]