Before kicking off your Maine startup, you'll need to decide which business entity
type you're going to form. We've brought together information on most of the major
entity types, from sole proprietorships to nonprofits, so that you can choose the
right Maine startup type for your unique situation.
In Maine, sole proprietorship and partnership
are filed at the city level; a DBA in Boston, for example, would be filed with the
Boston City Clerk's office. These types of business registrations are valid only
in the town in which they were registered.
There are two other types of DBAs in Maine: an assumed name and a fictitious name.
Both of these types of DBAs are registered with the Secretary of State, as both
affect existing corporate records; an assumed name is used when a registered domestic
business—a corporation or LLC—wishes to do business in Maine under a
new name, and a fictitious name is used by a foreign corporation from out of state
when its legal name is unavailable and it must select a new one for use in Maine.
Incorporate in Maine
A business wishing to
incorporate in Maine will register Articles of Incorporation with the Secretary
of State's office; these articles will include information about the business, including
the name, registered agent, registered office address, and Incorporator.
Incorporating in Maine forms a new legal "person," capable of entering into contracts
and taking on debt. Each individual owner is protected from debts or obligations
of the corporation through what is known as limited liability.
The default tax classification for a for-profit corporation is a
C corporation; this type of corporation is structurally very flexible, but
it involves "double taxation" in which the corporate income is taxed once at the
corporate level, and again at the individual level when distributed to the shareholders.
S corporation status can be requested by sending in an S Corporation Election
Form to the IRS. S corporations are considered pass-through entities, meaning that
corporate income is passed through to the shareholders and taxed only at the individual
level. However, an S corporation has a few limitations on its shareholders that
a C corporation does not.
Foreign Corporation in Maine
A business that was formed in another state must register as a
foreign corporation in Maine before conducting business in the state. This
is done by submitting an Application for Authority to Do Business to the Secretary
In addition to the Application for Authority, a foreign corporation must also submit
a Certificate of Good Standing or other similar document from its domestic state,
showing it to be in good standing in that state. This Certificate must be dated
within 90 days of your foreign corporation application.
An LLC is a type
of entity that, while recognized in Maine as well as the other 49 states, is not
recognized by the IRS as a tax classification; LLCs are able to select from a few
tax classification options, depending on whether there is one owner or multiple
A limited liability company, logically, provides limited liability to its owners
just as a corporation does, and it is able to .
Maine Nonprofit Corporation
nonprofit corporation is one that is exempt from federal taxes and is formed for
one of the purposes specified in IRS Code 501c3; it must first register as a Maine
nonprofit corporation, then apply for 501c3 status from the IRS.