Maine Incorporation: Everything You Need to Know
For Maine incorporation, the first step you should take is filing your business's articles of incorporation.3 min read
For Maine incorporation, the first step you should take is filing your business's articles of incorporation. This document will reserve your business name and make your corporation an official legal entity.
The Maine secretary of state must approve your articles of incorporation before you can get licenses for your business, sign business contracts, apply for tax IDs, or conduct business.
Incorporation in Maine
Incorporation has numerous benefits. It:
- Offers limited liability for directors, officers, and shareholders.
- Allows you to register your business's name.
- Gives your business or organization greater credibility.
In Maine, the process of incorporation is overseen by the Maine Bureau of Corporations, which has forms and instructions available to help businesses with incorporating.
Article of Incorporation
When preparing to file your articles of incorporation, be sure to take time to understand what information is required for each document. Articles of incorporation templates provide a good example of the minimum information you'll need to give the state for approval.
The state of Maine is transparent about what specific information needs to be filed. You can easily file articles of incorporation for your business through the Maine secretary of state by filing Form MBCA-6.
Basic information required to file includes:
- The corporation name.
- The corporation clerk's name and contact information.
- The type of stock and number of authorized shares.
- Who will manage the corporation (board of directors or otherwise).
- Each incorporator's name and signature.
Your corporation's name should not imply that your corporation is organized for a purpose other than what you have stated in the articles of incorporation.
Before filing, you should check to be sure that your desired name is available. Available Maine corporation names can be reserved for up to 120 days.
Your articles of incorporation will need to name either a commercial clerk (a company) or noncommercial clerk (an individual).
When designating a commercial clerk, include the name and CRA public number. It may be preferable to hire a commercial clerk if you work from home, are often out of the office, or prefer to keep your home address off the public record.
The board of directors is elected by shareholders and oversees the corporation's management. If your corporation will be managed by shareholders instead of a board of directors, make sure to include this detail in the articles of incorporation.
Structural and Management Options
Under Maine state law, corporations have different structural and management options. Corporations can decide if they will be managed by a board of directors or by shareholders.
Corporations can also decide how much stock they will issue. A corporation may have various types of stock, including:
- Voting stock.
- Nonvoting stock.
- Common stock.
- Preferred stock.
- A combination of these types of stock.
If you are incorporating as a 501(c)(3), the IRS requires that you file additional provisions.
Corporations are taxed by default as C corps, however, C corps have the problem of double taxation. C corps must pay taxes on business profits; in addition, business members must pay taxes on their profit distributions. The C corp treatment may work well for your business if:
- Profits are greater than $250,000 per owner.
- You intend to invest most of the profit back into the business.
- You offer employee benefits.
If all of the above is true, the C corp structure is worth considering for its low tax rates on earnings you retain.
If you have a smaller-scale corporation, you may benefit from choosing to form as an S corp. This treatment does not suffer from double taxation and S corps tend to be the better choice for small businesses.
Since articles of incorporation tend to be short and standardized, you most likely will be able to prepare and file them without legal help.
Time and Cost of Incorporation
If you pay the necessary filing fee ($145 for profit corporations; $40 for nonprofit corporations) and provide all the necessary information in the articles of incorporation, the Maine secretary of state is legally bound to accept your articles and issue your business a certificate of incorporation.
The process typically takes two to three weeks. For an additional $50, 24-hour service is available. Immediate service costs an additional $100. Articles cannot be filed online or via fax.
If you need help incorporating in Maine, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.