Types of Business Entities in Maine
The Department of the Secretary of State through the Bureau of Corporations, Elections and Commissions, serves as the registry for all corporate filings in Maine. We develop the appropriate forms required to form a business entity, file all business entity documents as required by law and provide information to the public on a business' status, directors, officers, members, managers, partners and business purpose.
Our office is not able to provide legal advice on what type of business entity you should start; however, the information below will assist you as you begin to examine the options available to you and your business. This guidance cannot replace the specific knowledge and advice that can be provided by a lawyer and a tax advisor as you make your own personal business decisions. Therefore, we encourage you to seek this assistance, when necessary, as you move through this process. Here is a link to resources that are available to you:
Our experienced staff is always available to assist you with filing procedures once you determine the type of business you want to start. We wish you much success in your business ventures!
What are the different types of business entities filed with the Maine Secretary of State?
Business entities are either domestic or foreign businesses. A domestic business has been formed or incorporated under the laws of the State of Maine. A foreign business has been formed or incorporated under the laws of another state or country and, by registering with the state, may be authorized to do business within Maine.
Business Corporation
A legal entity, separate and distinct from its owners (shareholders), with rights and responsibilities similar to a natural person, offering limited liability and easy transferability of ownership. It is formed for the purpose of transacting business in the broadest sense of the word, and these transactions are conducted to return a profit.
Nonprofit Corporation
A legal entity formed for the purpose of advancing a particular objective of an organization which is not established to make a profit. Generally, this includes charitable, benevolent and educational organizations. These entities are also called not-for-profit corporations.
Limited Liability Company (LLC)
A cross between a corporation (with an ability to limit personal liability) and a partnership (with an ability to assess profits and losses to individuals), this type of organization provides a flexible structure to achieve these ends.
Limited Partnership
A type of partnership made up of one or more general partners who manage the business and who are personally liable for partnership debts; and one or more limited partners who contribute capital and share in profits but who do not run the business and are not liable for the partnership obligations beyond contribution.
Limited Liability Partnership (LLP)
A general partnership that has elected to have limited personal liability for its general partners by registering this election with the Secretary of State.
What are the advantages and disadvantages of forming a business entity?
The answer to this question varies depending on your business and what you want to gain from forming a business entity. Some issues to consider when deciding include personal protection from liability, tax liabilities, and business continuity.
How is a business entity formed?
When individuals decide that they wish to form a business entity, they must file the applicable formation or incorporation document with the Office of the Secretary of State. This document establishes the individuals' intent to form the business entity and indicate who is forming the entity. Here is a link to the forms for each type of entity:
Once formed, any changes or amendments must be filed with the Secretary of State's office. To assist your business entity with other filing requirements, please refer to Filing Requirement Reminders or contact our office.
Here is a link to the most frequently used forms to make changes:
Other Common Types of Businesses (Not filed with the Secretary of State)
Sole Proprietorship
A business owned and controlled exclusively by one person. This person is responsible for the business, including all liability and any profit or loss.
Partnership (General Partnership)
An association of two or more persons to carry on, as co-owners, a business for profit. These individuals are responsible for the business, including all liability and any profit or loss. (This may also be referred to as a general partnership.)