If you’re looking to form a Maine professional corporation (PC), it’s important to understand the details of what this type of business entity involves. The formation process can seem too complicated, but with some guidance, you can reach your business formation goals and get on your way to growing the business.
While we don’t offer professional corporation formation in Maine, we do offer LLC and incorporation services. Get started below.
A professional corporation is a business entity made up of licensed professionals in the same field such as doctors, lawyers, accountants, or others. Unlike other entity types, the state requires certain industries to form a PC or a professional limited liability company (PLLC).
A Maine professional corporation is a valid business structure option for licensed professionals. Certain licensed professionals wanting to start a corporation in Maine are required to form professional corporations. These include:
In Maine, other licensed professionals also have the option of forming a PC but are not required to do so.
Licensed professionals also have the option of forming a professional limited liability company (PLLC) instead of a PC. Both entities are made up of licensed professionals, but they operate differently. Some key differences include:
Both the PLLC and PC structure provide a degree of liability protection. Generally, PLLCs are a good option for those who seek fewer maintenance requirements, but a professional corporation is a solid choice for many higher-income ownership groups because of the tax structure.
Once you have decided that a Maine professional corporation is right for you, it’s time to form your business.
Naming your Maine professional corporation is a very important step in the process of forming your business. One thing to take into consideration is that under Title 13, Chapter 22-A, Section 736 of the Maine Professional Service Corporation Act, your name must include the words chartered, professional corporation, professional association, or service corporation or the abbreviation P.C., P.A., or S.C. Though Maine professional corporations and PLLCs share some similarities, the terms “limited liability company,” “LLC,” or any other business designation can’t be included.
Using the same name as an existing company isn’t allowed, nor is it a good idea from a business perspective. You can certainly get creative, but make sure the name you choose doesn’t mislead the public (and potential clients) as to what services your PC provides.
Once you have decided on a name for your business, check that it’s actually available. Using ZenBusiness’s name reservation service will take care of the details by ensuring your name is available in the state where you’re registering. We can help you reserve your name so no one else takes it while you’re getting ready to register your business.
Online presence is crucial for most businesses in this day and age. Obtain your website domain before someone else does by using the ZenBusiness domain registration services and secure the URL that will best serve your corporation.
Under Maine law, you’re required to designate a registered agent to receive legal correspondence on behalf of your professional corporation. All registered entities must appoint and maintain a registered agent and registered office within the state. The agent must be available during normal business hours to forward any service of process, notice, or demand pertaining to the entity to the appropriate individuals. An entity cannot act as its own registered agent.
You can choose as an individual to be your own registered agent, but this can be inconvenient if you need to leave the office for any significant amount of time. A good alternative is a commercial registered agent service. ZenBusiness can put you in touch with our Maine-based partners through our registered agent service.
To register your business with the state, you need to submit Articles of Incorporation, the founding document of your PC. The person filling out the Articles of Incorporation for your professional corporation is known as its “incorporator.” Your Articles of Incorporation includes basic and pertinent information to the business, such as contact information and who your registered agent is. Once your Articles are complete, submit them to the Maine Secretary of State’s Division of Corporations, UCC, and Commissions. Online filing isn’t currently available for Articles of Incorporation in Maine.
According to the Maine Business Corporations Act, professional corporations are required to document and retain a permanent record of all important business decisions made. This includes:
These documents can be kept as hard copies or electronic copies but must be easily accessible so they can be handed over to the Secretary of State if requested.
The incorporator also names the initial directors for your Maine professional corporation. These directors must be listed on the Articles of Incorporation, but can be changed later on. According to Title 13, Chapter 22-A, Subchapter 4, Section 747 of the Maine Professional Service Corporation Act, not less than a majority of the directors of a professional corporation and all its officers, except the clerk, secretary, and treasurer, must be licensed professionals in the industry that the business serves.
Establishing corporate bylaws for your Maine professional corporation is an important part of creating a solid foundation for the way the business will operate in relation to decision-making. Some important areas to address include:
Initially, the incorporator or board of directors may prepare the company bylaws. The bylaws must not have any inconsistencies with the Articles of Incorporation. All Maine corporations must establish bylaws. However, these don’t have to be filed with the state.
The first board meeting for your Maine professional corporation is the ideal time to get the initial administrative work out of the way. There are several key items that need to appear on that first board meeting agenda, including:
The incorporator will call the initial meeting. All designated directors need to be present and the minutes recorded. It’s an easy thing to forget at the first meeting, but is an important part of starting your PC on the right foot.
To conduct business as a Maine PC corporation, you will need an employer identification number (EIN), which is issued by the IRS. You will need this number to open business accounts, hire employees, and pay taxes. Using the EIN service from ZenBusiness is a great way to remove this task from your plate.
Once you have your EIN, it’s time to make a decision as to which tax structure is best for your Maine professional corporation. Your choices are to form an S corporation or a C corporation. There are benefits and downsides to both.
At the state level, your professional corporation could be subject to a variety of taxes. Some of these taxes may be dependent on the tax structure you choose but will likely include corporate income tax and sales tax. You may also be subject to taxes specific to the type of business you conduct and the location of your business.
You will need to obtain all necessary industry-specific licenses for your business. Your licensing needs will differ depending on the type of service you provide. The State of Maine provides resources to help you learn more about potential licensing requirements on the state government website. However, you will also need to check with your local government town office to learn more about how to obtain a general business license and other necessary local licenses.
You can simplify the process by using our partner service, Avalara to help you identify which licenses are required for what you do and where you are.
Generally, all Maine employers are required to carry workers’ compensation insurance. Failing to purchase workers’ compensation insurance could result in fines and open your business up to personal injury lawsuits.
Specialized industries often require insurance based on your occupation, such as malpractice insurance. It’s also a good idea to have general liability insurance for any business.
It’s very important to keep all personal assets separate from business assets. One of the things to consider at your first Maine professional corporation board meeting is which bank the business will use. You will need your EIN, but the bank might also ask for other paperwork as well.
AlthoughZenBusiness doesn’t form professional entities at the moment, we’re proud to support new businesses, like yours, through a variety of services and tools to help simplify the process. Check out our services, and let’s work together to build your company.
Filing fees change from time to time. A current version of Maine professional corporation filing fees can be found on the Department of Secretary of State website.
Though an attorney can provide guidance on the best way to form your Maine professional corporation, you don’t need one.
In Maine, licensed professionals have the option of forming a professional corporation or a professional limited liability corporation.
Maine PC corporation shareholders must all be licensed in the same field.
You have the option to choose which corporate structure your Maine professional corporation will use, depending on your preference and whether you meet the IRS’s qualifications.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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