How to File Maine Articles of Incorporation

Your Guide to Incorporating in Maine

Maine articles of incorporation are filed to create a corporation. This guide provides instructions and tips when preparing and filing this legal document.

Overview

Preparing and filing your articles of incorporation is the first step in starting your business or nonprofit corporation. Approval of this document secures your corporate name and creates the legal entity of the corporation. Only after this approval can the corporation apply for tax IDs, obtain business licenses, sign contracts, and otherwise conduct business.

Incorporating provides many important benefits:

• Limits the liability of directors, officers, and shareholders
• Fulfills statutory requirements to register your business’s or organization’s name
• Provides governance and adds credibility to the business or organization

The Maine Bureau of Corporations oversees the process of incorporating. This division offers forms and instructions to help with incorporating. Use the correct forms and instructions for a profit or nonprofit corporation.

Before Filing Your Articles of Incorporation

As you prepare to file your articles of incorporation, it is important to take time to understand the specific information required on those documents.

Also understand that state articles of incorporation templates represent the minimum amount of information you must provide for state approval, but there might be additional provisions you should provide. The IRS requires additional provisions for 501(c)(3) eligibility. State tax exemptions, licenses, B-corporation and other certifications, and even some banking purposes require additional provisions in the articles.

Business Corporations

Profit corporations and for-profit professional corporations

How to File Articles of Incorporation for a Business Corporation

Maine profit articles of incorporation include the following information. Differences for professional corporations are noted. Examples of professional service corporations are accountants, attorneys, chiropractors, dentists, registered nurses and veterinarians. Note that some information is optional.

1

Name of Corporation

The name of your corporation must be distinguishable from all other registered entities in Maine (including other corporations, LLCs, LPs, LLPs, fictitious names, reserved names, and marks). Conduct a thorough name availability check before filing your articles of incorporation. Maine statutes do not explicitly require a corporate designator such as “corporation”, “incorporated”, “company”, “limited”, or similar abbreviation (13-C MRSA §401).

Professional services corporations, however, must contain either “chartered”, &dquo;professional corporation”, “professional association”, “service corporation”, or the abbreviation “P.C.”, “P.A.” or “S.C.”

2

Professional Services

Only professional service corporations shall state “This is a professional corporation formed pursuant to 13 MRSA Chapter 22-A” and describe the type of professional services to be provided.

3

Clerk

In many states the “clerk” is called a registered agent. This individual or company is responsible for receiving service of process (notice of lawsuit) and other official correspondence on behalf of the corporation. For example, if your corporation is sued, a sheriff or process server would go to the physical address listed for the clerk and ask the clerk to sign for notice of lawsuit against the corporation.

Your Maine articles of incorporation must designate either a commercial clerk (a company) or a noncommercial clerk (an individual).

• For a commercial clerk, include their name and CRA Public Number. Hiring a commercial clerk (registered agent) such as us may be in your best interest if you have a home office, are regularly out of the office, wish to keep your address off the public record, or do not want to risk receiving a sheriff or process server in front of clients or employees.
• For a noncommercial clerk, state their name, physical street address (must be in Maine and may not be a P.O. Box), and their mailing address. You may declare any Maine resident who consents to their appointment.

4

Clerk’s Consent

The articles of incorporation should declare an additional statement that pursuant to 5 MRSA §108.3, the clerk has consented to serve as the clerk for the corporation.

5

Authorized Shares

Shares represent ownership interest in the corporation. State the total number of shares the corporation is authorized to issue.

You do not have to issue all shares authorized, that way you have the flexibility to add more shareholders at a later date. In the example of a corporation with three owners, you may authorize 1,000 shares and issue 250 shares to each owner (750 shares issued). This leaves 250 shares to issue to future investors or partners. The corporation may later change the amount of shares authorized by filing an amendment to the articles of incorporation.

Decide if your corporation will issue more than one class of share. Classes are differentiated by the level of voting rights shareholders receive. For example, a company might have two classes of shares designated as Class A and Class B. Provide the name, authorized number of shares, and a description of the rights of each class.

Providing a par value for authorized shares or classes of shares is optional.

6

Board of Directors

Directors are the individuals elected by the shareholders to oversee the management of the corporation. The Board of Directors elects corporate officers to run the day-to-day operations and make certain decisions for the corporation. Decide whether your corporation will have a board of directors or will be managed by shareholders and state this in the articles of incorporation.

7

Directors

Corporations with directors can declare any of the following optional provisions in the articles of incorporation:

• Minimum and maximum number of directors.
• Removal of directors’ damages. For example, “To the fullest extent permitted by 13-C MRSA §202.2.D, a director shall have no liability to the Corporation or its shareholders for money damages for an action taken or a failure to take an action as a director.” Per statute, this does not except liability for:
  (1) The amount of a financial benefit received by a director to which the director is not entitled;
  (2) An intentional infliction of harm on the corporation or its shareholders;
  (3) A violation of section 833; or
  (4) An intentional violation of criminal law
• Indemnification of directors. For example, “Except as otherwise specified by contract or in its bylaws, the Corporation shall in all cases provide indemnification (including advances of expenses) to its directors and officers to the fullest extent permitted by law. (13-C MRSA §§202, 857 and 859)” Again per statute, this does not except liability for:
  (1) The amount of a financial benefit received by a director to which the director is not entitled;
  (2) An intentional infliction of harm on the corporation or its shareholders;
  (3) A violation of section 833; or
  (4) An intentional violation of criminal law

8

Preemptive rights

The shareholders of a corporation do not have a preemptive right to acquire the corporation’s unissued shares except to the extent provided for in the articles of incorporation provide. If desired, provide this right to the shareholder by stating “The Corporation elects to have preemptive rights as defined in 13-C MRSA §641.”

9

Additional Provisions

You may choose to include additional provisions. Be aware that any information you include will become part of public record. These might include:

• The purpose(s) for which the corporation is formed.
• The names and addresses of the initial directors.
• Management of the affairs of the corporation.
• Defining, limiting, and regulating the powers of the corporation, its board of directors, or its shareholders.
• The imposition of personal liability on shareholders for the debts of the corporation to a specified extent and upon specified conditions.

10

Incorporator(s)

The incorporator is the individual responsible for executing the articles of incorporation. The function of the incorporator usually ends after the documents are filed. More than one incorporator may be used. Each incorporator must print their name and address. Remember that any information you provide will become part of public record so you may wish to use a business location. One incorporator must print their name, sign, and date their signature executing the articles of incorporation.

Supplementary Documents a Business Corporation May File with the Articles of Incorporation

Filer Contact Cover Letter

Include a cover letter with contact information if there are any questions about the filing. Indicate the name of the corporation, that the articles of incorporation are being filed, as well as any requests for expedited services. The attested copy will be returned to the contact person and address indicated.

Filing Fees

Include filing fees ($145) made payable to the Secretary of State.

Expedited Service

Expedited processing costs $50 for overnight and $100 for immediate processing. Include these fees with your articles.

How to Elect S-Corporation Status

S-Corporation is a tax election filed with the IRS. By default, your corporation will receive tax treatment as a C-Corporation. Many small businesses find it beneficial to elect S-Corporation tax treatment.

• Electing Subchapter S status helps shareholders avoid the double taxation that applies to traditional C-Corporations.
• S-Corps can also help the owners avoid paying the 15.3% Self-Employment Tax (Social Security and Medicare) on distributions.

Corporations must file form IRS-2553 within 75 calendar days of incorporation to be taxed as an S-Corp. Check with your state’s Department of Revenue if they will automatically recognize your federal IRS tax election or if you need to make an additional application or notification.

Nonprofit Corporations

Nonprofit corporations: Public Benefit corporations and Mutual Benefit corporations

How to File Articles of Incorporation for a Nonprofit Corporation

You can form a Maine nonprofit corporation by filing the articles of incorporation forms intended for a nonprofit. Maine uses two designations of nonprofit corporations. Before filing, determine which type of nonprofit describes your organization:

• Public Benefit Corporations are those serve the community at large such as volunteer firefighter departments, grantmaking foundations, and homeless shelters. Any organization that will apply for exemption under 501(c)(3) is a public benefit corporation.
• Mutual Benefit Corporations serve a limited number of members with common interests. For example, your organization might be a homeowners’ association, snowmobile club, or trade association.

Nonprofit articles must contain the following information:

1

Name of Corporation

The name of your nonprofit corporation must be distinguishable from all other registered entities in Maine (including other corporations, LLCs, LPs, LLPs, fictitious names, reserved names, and marks). Conduct a thorough name availability check before filing your articles of incorporation. Maine statutes do not explicitly require a corporate designator such as “corporation”, “incorporated”, “company”, “limited”, or similar abbreviation (13-C MRSA §401).

2

Type of Nonprofit

Indicate if your organization will be a public benefit corporation or mutual benefit corporation. Describe the corporations purpose or purposes. Mutual benefit corporations may use a general statement such as “all purposes permitted under Title 13-B”. Public benefit corporations may wish to check that their description of corporate purpose fulfills the requirements to apply for 501(c)(3) exemption (check IRS Pub 557).

3

Registered Agent

Maine uses the terms “registered agent” and “clerk” interchangeably. This individual or company is responsible for receiving service of process (notice of lawsuit) and other official correspondence on behalf of the corporation. For example, if your corporation is sued, a sheriff or process server would go to the physical address listed for the registered agent, ask for signature, and expect corporate personnel to be notified promptly.

Your Maine articles of incorporation must designate either a commercial registered agent (a company) or a noncommercial registered agent (an individual).

• For a commercial registered agent, include their name and CRA Public Number. Hiring a commercial registered agent such as us may be in your best interest if you have a home office, are regularly out of the office, wish to keep your address off the public record, or do not want to risk receiving a sheriff or process server in front of clients or employees.
• For a noncommercial registered agent, state their name, physical street address (must be in Maine and may not be a P.O. Box), and their mailing address. You may declare any Maine resident who consents to their appointment.

4

Registered Agent’s Consent

The articles of incorporation should declare an additional statement that pursuant to 5 MRSA §108.3, the registered agent has consented to their appointment on behalf of the nonprofit corporation.

5

Number of Directors

Directors are the individuals elected by the members to oversee the management of the corporation. At minimum, your Maine nonprofit corporation must have three.

• List the number of directors on the initial board of directors only if the initial directors have been chosen.
• List the minimum (at least three) and maximum number of directors on the board, if this number differs from the count of directors on the initial board.

6

Members

Members of a nonprofit corporation are like the shareholders of a business corporation. Indicate whether or not the nonprofit will have members. Furthermore, you may designate whether there will be multiple classes of members, which typically have different rights. For each class of membership (even if just one), provide the designation (the name) of the class, the manner of election or appointment, and the qualifications and rights of the members of that class.

7

Political activity

If desired, include a statement limiting political activity. For example, “No substantial part of the activities of the Corporation shall be the carrying on of propaganda, or otherwise attempting to influence legislation, and the Corporation shall not participate in or intervene in (including the publication or distribution of statements) any political campaign on behalf of any candidate for public office.”. Such statement(s) correspond with applying for 501(c)(3) exemption.

8

Additional Provisions

You may choose to include additional provisions. Be aware that any information you include will become part of public record. The Maine articles of incorporation template prompts you to include provisions for applying for 501(c)(3) exemption. These might include:

• Provisions for the regulation of the internal affairs of the corporation
• Provisions for distribution of assets on dissolution or final liquidation

More generally, federal and state tax exemptions often require specific language in the articles of incorporation. It is best to research and use the exact language required by your tax-exemption or tax-deductible application in each state and with each agency where you will apply.

9

Incorporator(s)

The incorporator is the individual responsible for executing the articles of incorporation. The function of the incorporator usually ends after the documents are filed. More than one incorporator may be used. Each incorporator must print their name and address. Remember that any information you provide will become part of public record so you may wish to use a business location. One incorporator must print their name, sign, and date their signature executing the articles of incorporation.

If a corporation is an incorporator (13-B MRSA §401), the name of the corporation should be typed or printed and signed on its behalf by an officer of the corporation. The articles of incorporation must be accompanied by a certificate of an appropriate officer of the corporation, not the person signing the articles, certifying that the person executing the articles on behalf of the corporation was duly authorized to do so.

Supplementary Documents a Nonprofit Corporation May File with the Articles of Incorporation

Filer Contact Cover Letter

Include a cover letter with contact information if there are any questions about the filing. Indicate the name of the corporation, that the articles of incorporation are being filed, as well as any requests for expedited services. The attested copy will be returned to the contact person and address indicated.

Filing Fees

Include filing fees ($145) made payable to the Secretary of State.

Expedited Service

Expedited processing costs $50 for overnight and $100 for immediate processing. Include these fees with your articles.

How to Register for 501(c)(3), Fundraising, and State Tax Exemption

501(c)(3) Federal income tax exemption

Nonprofits may choose to apply for federal income tax exemption. 501(c)(3) recognition also allows donors to make tax deductible contributions. The IRS published rev-557, an informational resource on how to obtain tax exempt status for a nonprofit organization. 501(c)(3) is perhaps the most common and well-known tax exemption category for charitable organizations, however the internal revenue code has exemption categories for many other types of nonprofits organizations. Incorporating the nonprofit and obtaining a Federal Tax ID (EIN) are precursors to applying for 501(c)(3) recognition.

State tax exemptions

501(c)(3) recognition provides income tax exemption on federal taxes. Your state may have additional applications or processes for obtaining state tax exemptions for the corporation. Consider applying for exemptions in each state where the nonprofit will conduct activities.

State fundraising registration

Some aspects of fundraising are regulated by state government. Nonprofits that solicit funds may need to submit registrations with the department of state or revenue in each state where they solicit residents. Be sure to check the procedures for obtaining the authority to solicit, employee solicitors, or otherwise engage in fundraising in each state where you raise funds.

Additional Requirements for Maine Corporations

Maine Does Not Have a Publishing Requirement

In some states, corporations are required to publish notice of their intention to or their filing of the articles of incorporation. This is not the case in Maine.

Maine Annual Reports

All corporations must file an annual report, starting in the calendar year after the articles of incorporation were filed. The report is due June 1st each year. The report may be filed online. The fee for business corporations is $85 and for nonprofit corporations is $35. The state sends filing reminders are sent via email only. Failure to file the initial report can result in fines and ultimately administrative dissolution.

Register for Federal Taxes, State Taxes, & Licenses/Permits

After you file your articles of incorporation, you will apply for a Federal Tax ID (EIN), a unique nine-digit number assigned by the IRS to identify your business. State tax registration requirements vary, but the most common registrations are for sales tax and employer taxes. You may also need to get local licenses or permits.

Hold an Organization Meeting & Establish Records

Once the registration process is complete, you should hold an organizational meeting of the incorporators and take minutes of that meeting. At that time, you will ratify corporate bylaws, adopt a shareholders agreement, issue stock certificates and complete a stock ledger, elect directors and officers, and anything else you may want to include. Consider purchasing our corporate kit that stores your documents and contains your corporate seal and stock certificates.

Ongoing Compliance Requirements

Ongoing requirements include annual meetings with minutes, special meetings to make important business decisions, maintaining a registered office, amending your articles of incorporation as needed, and more. For more information on business compliance action items, please consult your Harbor Compliance representative.