In Maine, businesses are allowed to incorporate, thereby becoming their own legal entities. When an incorporated business acts, whether it is to buy and sell property, assent to contracts or exercise legal rights, the process is then attributable to the business itself and not its owners. The Maine Secretary of State receives and processes applications for incorporation, which must be submitted in compliance with local guidelines.
Benefits of Incorporation in Maine
Advantages of incorporation are many. The primary benefit is that the liabilities of the business can only be satisfied by the assets specifically invested into the company by the owners. If the business had remained a personal asset of the owners, they would run the risk of losing their personal property to pay for the company's financial liabilities in case of default. Furthermore, banks in the Camden area prefer to evaluate the credit worthiness of a business as a whole rather than that of individual owners. This makes the process of acquiring corporate loans simpler. Finally, the ownership of a corporation is divided into an abundance of equal portions or "shares" of stock. Without this mechanism, transferring ownership of a business would be impractical.
Costs of Incorporation
These advantages come at a price. First, incorporation in Maine may require a filing fee. Second, a corporation pays taxes just like any other entity. The incomes of owners as individuals are also taxed of course, meaning that income to the corporation may be subject to double taxation. However, this disadvantage can be avoided with proper planning and help from a local Camden lawyer.