When starting a business, you may elect to operate as a sole proprietor, a corporation, a limited liability company (LLC), or other business entity. Corporations and LLCs provide important benefits in protecting personal assets from creditors and creating tax advantages for your business. The new tax law makes it more advantageous than ever to run your business as an LLC, S-Corp, or other pass-through entity.
An experienced business attorney at Ballou & Bedell can help you choose the right business entity for your specific circumstances. We prepare documents for the transition to the new business entity, assist with initial and annual meetings, and file mandatory annual reports with the Maine Secretary of State.
A Maine corporation is a legal entity established by an individual or group of individuals under the laws of the State of Maine. When a corporation is properly formed and maintained, it can protect stockholders from claims of parties who did not receive personal guarantees from the stockholders if the business fails. A properly formed corporation generally limits the liability of stockholders to the amount of money or property invested in the enterprise.
This flexible and relatively new form of business entity combines the tax advantages of a partnership with the limited liability afforded to corporate shareholders. Owners of an LLC are called members, not shareholders. Members may include individuals, corporations, and even other LLCs. Maine law also permits single-member LLCs owned by one individual.
A partnership is an association of two or more individuals who co-own a business or enterprise. These owners are responsible for the business, including all liability and any profit or loss. Although the LLC has superseded the partnership as the preferred entity form, a general partnership or limited partnership may be more appropriate in some instances. For example, you may want to create a partnership agreement if you own real estate with someone other than your spouse.
Nonprofit groups can take advantage of many benefits by establishing corporate status. First, this allows the organization to obtain exemption from federal and state income taxes. The most common federal tax exemption for nonprofits comes from Section 501, Section c, Section 3 of the Internal Revenue Code, which is why nonprofits are sometimes called 501(c)(3) corporations. If your group obtains tax-exempt status, people and organizations that donate to the nonprofit can take a tax deduction for their contribution.
With nonprofit corporate status, directors, officers, and members of the nonprofit are protected from personal liability for the corporation’s debts and obligations. Establishing a corporation is often a requirement for obtaining funds from government agencies and private foundations.
We also assist other non-profit corporations such as Condominium Associations and Homeowner’s Associations.
Our team at Ballou & Bedell can help you create the ultimate corporate structure for your small business. We can explain the benefits of operating your businesses as an LLC, S–Corporation, or other Pass-Through Entity. We will also ensure your entity remains in good standing with the state by serving as a Registered Agent and managing required tasks such as annual meetings and reports. To get started, fill out our online form or call (207) 363-5300 today.