PROBLEM
Oregon law of corporations and partnerships (ORS chapters 56 – 70 and ORS chapter 648) is inconsistent in its treatment of corporations and other business entities created or authorized by federally-recognized American Indian tribal governments. In some cases Oregon law recognizes these tribally created or authorized entities, and designates them as foreign entities. Otherwise, Oregon law fails to recognize that such tribally authorized entities can exist. This latter situation is problematic, as it unjustifiably creates procedural barriers to ordinary intergovernmental activities. The failure to recognize these tribally authorized entities is clearly an oversight rather than a reasoned policy decision. As such it is in need of correction. All such tribal entities should be uniformly acknowledged and treated as foreign entities by the state.
ANALYSIS
The definitions sections of ORS chapters 58 (Professional Corporations), 62 (Private Corporations), 63 (Cooperatives [i.e., cooperative corporations]), 65 (Non-profit Corporations), 67 (Partnerships; Limited Liability Partnerships), 70 (Limited Partnerships) and 648 (Assumed Business Names) use similar or identical definitions for such terms as “entity”, “foreign corporation”, “foreign limited liability company” or “foreign limited partnership”. In some cases, those definitions acknowledge that tribal governments create or authorize such entities under tribal law. In other cases, the fact that such entities are created by tribal governments is ignored. In several instances, the same term is defined differently in different chapters. As defined in some ORS chapters, a term such as “foreign corporation” includes tribally authorized entities, yet as defined in other ORS chapters it does not.
Examples of Explicit Recognition of Tribal Entities
An example of a definition that acknowledges that tribes create such entities is the definition for “foreign limited liability company” that appears at ORS 60.001(16), 62.015(11), 63.001(11), 65.001(22) and 70.005(9). In each case that term is defined as: “an entity that is an unincorporated association organized under the laws of a state other than this state, under the laws of a federally recognized Indian tribe or under the laws of a foreign country and that is organized under a statute under with an association may be formed that affords to each of its members limited liability with respect to liabilities of the entity.” This is the best sort of definition, because it explicitly acknowledges entities created by tribes.
Examples of Implicit Acknowledgement of Tribal Entities
More common are definitions that automatically include tribally created entities without separately acknowledging them. These are definitions that define a foreign entity as any of that type of entity that is not created by Oregon. The definition of “foreign professional corporation” at ORS 58.015(1) is an example. Such corporations are defined as “a professional corporation organized under laws other than the laws of this state”. This type of definition is used for the following terms:
Foreign professional corporation: ORS 58.015(1).
Foreign corporation: ORS 60.001(15), 63.001(10) 65.001(21).
Foreign cooperative: ORS 62.015(9).
Foreign limited partnership: ORS 63.001(12), 70.005(10.
Foreign limited liability partnership: ORS 67.005(5)(a).
Examples of Failure to Acknowledge Tribal Entities
Unfortunately, elsewhere in these same chapters, other types of foreign entities are defined in ways that fail to recognize tribally created entities. Typically these definitions follow the pattern of the definition of “foreign nonprofit corporation” found in ORS 60.001(17), defining the entity as “a corporation not for profit organized under the laws of a state other than this state.” Such definitions ignore the reality of tribally created entities. This type of definition is used for the following terms:
Foreign nonprofit corporation: ORS 60.001(17), 62.015(12), 63.001(13), 70.005(11).
Foreign professional corporation: ORS 60.001(18), 62.015(13), 63.001(14), 65.001(23), 70.005(12).
Foreign corporation: ORS 62.015(10), 70.005(8).
Please note that at ORS 58.015(1) “foreign professional corporation” in defined in a way that includes tribally created entities, but in the sections listed above it is defined in a way that excludes tribal entities. Likewise the definitions of “foreign corporation” at ORS 60.001(15), ORS 63.001(10) and ORS 65.001(21) include tribal corporations, but the definitions of the same term at ORS 62.015(10) and ORS 70.005(8) do not!
A special case is presented by the term “entity”. It is defined in a variety of places, using slightly different terms that have essentially the same meaning:
ORS 60.001(14): “’Entity’ includes a corporation, foreign corporation, nonprofit corporation, profit and nonprofit unincorporated association, business trust, estate, partnership, trust, two or more persons having a joint or common economic interest, any state, the United States and any foreign government.”
ORS 63.001(9): “Entity’ includes a domestic or foreign limited liability company, corporation, professional corporation, foreign corporation, domestic or foreign nonprofit corporation, domestic or foreign cooperative corporation, profit or nonprofit unincorporated association, business trust, estate, domestic or foreign general or limited partnership, trust, two or more persons having a joint or common economic interest, any state, the United States or any foreign government.”
ORS 65.001(18): This is the same as the definition at ORS 60.001(14) except the term “corporation sole” has been added to the list before the words “business trust”.
ORS 648.005(4): “’Entity’ includes a foreign or domestic corporation, foreign or domestic nonprofit corporation, foreign or domestic profit or nonprofit unincorporated association, foreign or domestic business trust, foreign or domestic estate, foreign or domestic limited partnership, foreign or domestic general partnership, foreign or domestic limited liability company, foreign or domestic business trust, two or more persons having a joint or common economic interest, any state, the United States or any foreign government.”
The diversity of these definitions for the same term seems somewhat problematic, but it is not likely to be a driving concern of the Indian Law Section. Two issues are a concern. The first is that all four definitions conclude with the phrase “any state, the United States or any foreign government”. Federally recognized American Indian tribal governments do not clearly fall into any of these categories, and yet there is no reason why they should not be included in the definition of “entity” along with their fellow governments. The second concern is that, in the case of ORS 648.005(4), the terms used in the definition are not defined elsewhere in that chapter. The definition relies upon the meanings of those terms as they appear in chapters 58 – 70 of the ORS. Yet, in the case of two of those terms (“foreign professional corporation” and “foreign corporation”), the term is defined differently (either including or excluding tribes) depending on which chapter’s definition one relies upon.
SOLUTION
All of this confusion would be remedied by amendments that uniformly acknowledge that all these entities can be authorized or created by tribal governments, and that when they are, they are “foreign” entities. A relatively discrete set of amendments would accomplish this.
Uniformly replace the phrase “organized under the laws of a state other than this state” with the phrase “organized under laws other than the laws of this state” for the definitions of “foreign nonprofit corporation”, “foreign professional corporation” and “foreign corporation.” Note that the terms “foreign professional corporation” and “foreign corporation” are already defined this way in some cases but not in others.
Change the final phrase of the four definitions of “entity” by adding the words “federally recognized American Indian tribal government” between the words “United States” and the words “or any foreign government”.
CONCLUSION
There is no rational justification for the inconsistent ways ORS chapters 56 – 70 and 648 treat corporations, partnerships, and other entities created pursuant to the sovereign powers of federally recognized American Indian tribal governments. One cannot find a policy rationale for these patchwork provisions. Instead, this is a clear example of a body of law that has partially overlooked the existence or possibility of such tribally authorized institutions. The result of this omission is confusion regarding the authorization and procedures whereby the Secretary of State’s office and other organizations within the state deal with such institutions. This is an oversight that requires correction. These amendments would provide a tidy remedy to this problem without introducing new controversies.