Articles of Organization

After your Maine LLC is named, you must file articles of organization with the Corporate Examining Section of the Maine Secretary of State's office, along with a $175 filing fee. The articles must be executed (signed) by at least two persons organizing the LLC and the registered agent, and delivered (one original and a copy) to the Maine Secretary of State's office.

A certificate of organization will be issued and delivered along with the conformed copy to the LLC's representative(s). The original articles of organization will in turn be filed with the Secretary of State along with the month, day and year of filing.

The articles of organization for your new Maine LLC must include the following information:

• The LLC's name
• The LLC's principal office address
• The street address (including county) of the LLC's registered office
• The name and street address of the registered agent
• Whether the LLC will be member-managed or manager-managed
• A minimum and maximum number of managers permitted
• The name and business, residence, or mailing address of each initial manager, if any have been selected

The registered agent must also sign to indicate acceptance of the appointment.

The articles may also include other items that the members wish to include (as long as they don't conflict with state law), even if they are also included in the operating agreement.

Registered Agent and Office

All Maine LLCs are required to continuously maintain a registered in-state agent and office. This agent is the person designated to receive official state administrative and legal correspondence.

A registered agent in Maine may be an individual state resident whose business or residential address is the same as the LLC's registered office, or a business entity that is authorized to do business in the state and whose registered office also serves as the registered office of the LLC.

The registered office may be (but is not required to be) the LLC's place of business.

Operating Agreement

Nearly as important to the LLC as its articles of organization is the operating agreement. Maine doesn't have a legal requirement for an LLC to have an operating agreement, but it's a vital internal document that specifies how your LLC will operate on all levels.

The operating agreement should list the LLC's members, specify how much each one has invested, explain how profits will be divided, and state how much proportional "weight" each member has when issues are voted upon-this is known as "members in interest." Unless the articles of organization or the operating agreement say otherwise, voting power in a member-managed LLC is vested in each member according to his or her current capital account balance with the LLC.

The operating agreement may also set forth meeting requirements such as the amount of required notice, what constitutes a quorum, voting rules, and so on, but it doesn't have to. Normally, however, the operating agreement does list requirements for the LLC that are already listed in state law and regulations. It can also include such items as restrictions or constraints on the power of the members to adopt, amend, or repeal the operating agreement.

If there is more than one member, the operating agreement must initially be approved unanimously in writing by the members.

Membership in the LLC

Unless otherwise provided in the articles or operating agreement, managers are elected for an indefinite term and removed and replaced by a majority (per capita) vote of the members.

An LLC is required to have at least one member, who may be may be an individual or a legal entity. Members may become a member of or acquire an interest in the LLC when it is first started, or with the written consent of all the members.

To join the LLC, the prospective member usually needs to make some kind of contribution-for example, pay cash, transfer tangible or intangible property to, or perform services for the LLC-or undertake a binding obligation (such as a promissory note) to do so.

Unless stated otherwise in the operating agreement, an LLC member can withdraw or resign at any time upon 30 days' advance notice to the other members. If a member's withdrawal is in violation of the operating agreement, the member can be held responsible for financial damages caused by their withdrawal.

Ongoing Requirements

Maine LLCs must file an annual report with the Secretary of State that lists:

• The LLC's name
• The name of the LLC's registered agent
• The address of the LLC's registered office in Maine, including the street or rural route number, town or city, and state
• A brief statement of the character of the business in which the LLC is actually engaged, if any
• The name and address of each manager or, if none, each member, including the street or rural route number, town or city, and state

Each LLC must keep the following records available for inspection at its office:

• An alphabetical list of all current and former members and managers and their mailing addresses
• A copy of the articles of organization, with any amendments and related powers of attorney
• Copies of the LLC's federal, state and local income tax returns and financial statements, if any, for the past six years
• Copies of current and former operating agreements and amendments
• Unless stated in the operating agreement or articles of organization, the amount of cash and the agreed-upon value of other property or services contributed by each member
• The times and/or events that would trigger additional contributions by the members
• Any events that would trigger the LLC's dissolution and the winding up of its operations

Also, it's a good idea to keep on file and available the minutes of the meetings of any committees of the managers or members.

Dissolution

An LLC is dissolved when any one of the following events occurs:

• Event(s) specified in the articles of organization or operating agreement
• Written agreement or consent of all the members to dissolve
• An event that makes it unlawful for the LLC to continue
• The LLC's duration as specified in the articles of organization or the operating agreement expires (if the LLC is not perpetual)
• A court order ordering dissolution

Taxes

An LLC offers certain tax advantages over a corporation, including the availability of more deductions. Additionally, it is not required to be a separate tax entity like a corporation; instead, it can be a "pass-through entity," so that the LLC owners (members) report business losses or profits on their personal tax returns.

Articles of Incorporation

State law requires that the new Maine corporation file articles of incorporation with the Secretary of State, delivered by at least one incorporator and accompanied by a filing fee of $145. The articles must include the following information:

• The name and mailing address of each incorporator
• The number of shares the corporation is authorized to issue
• If there is more than one class of shares, the number of shares per class and a description of the rights in each class
• The street address and mailing address, if different, of the corporation's initial registered office and the name of its initial clerk at that office
• The clerk's signed acceptance

Maine law no longer uses the concept of par value for shares, so you only need to specify the number of shares you wish to authorize for later issuance to shareholders. The filing fee is not based on the number of authorized shares, so you can authorize as many as you wish.

Maine also permits optional provisions to be included in the certificate of incorporation for corporations wishing to specify additional criteria, including:

• The names and addresses of the initial directors
• The corporate purpose(s)
• A par value for authorized shares or classes of shares
• Personal liability of shareholders for corporate debts in certain situations
• Limitation of liability or indemnification of directors to the corporation or its shareholders for monetary damages in certain situations

Registered Agent and Office

Every Maine corporation must have a clerk, who must be a natural person who is a Maine resident. (In other states, this position is usually called the "registered agent.") The clerk is the person designated to receive official state administrative and legal correspondence, including notice if the corporation is served with a lawsuit. The clerk may be-but is not required to be-one of the directors or officers of the corporation, or the clerk may be a person holding no other position with the corporation. The clerk must be appointed by the corporation's board of directors unless the articles of incorporation reserve appointment of the clerk to the shareholders.

In addition, the clerk must keep on file a list of all shareholders of the corporation and maintain records of all shareholders' meetings, including all records of all votes and minutes of the meetings.

Maine requires that every corporation maintain a registered office, which may be the same as its place of business.

Bylaws

A corporation is required to keep its bylaws available at its main office, but it is not required to file them with the state. The incorporators or board of directors should adopt the corporation's bylaws at their first meeting, insuring that there is no conflict with the articles of incorporation or state law. They should also keep the bylaws updated as time goes on.

Bylaws set forth the corporation's basic operating principles from both the managerial and legal perspectives, and should include, as a minimum:

• The authority of directors, how many there are, and how long they serve
• Officers' duties and responsibilities and how long they serve
• How major decisions are reached, with or without meetings
• How, when, and where shareholders' and directors' meetings are held
• How the corporation's stock is issued
• Requirements for publishing annual financial information to shareholders

Directors and Officers

The board of directors is responsible for making the corporation's major decisions. It must consist of one or more members. The number of directors should be specified in either the articles of incorporation, the bylaws, or both. If the certificate of incorporation establishes the number of directors, it can only be changed by amending the certificate.

Directors are not required by law to be stockholders, but the articles of incorporation or the bylaws may specify a requirement in this area as well as others.

The officers of a corporation oversee the day-to-day operations of the organization and carry out the strategic decisions made by the board of directors. They are listed by name in the bylaws or elected by the board, and their titles and duties are stated in the bylaws. They may appoint other officers in compliance with the bylaws.

Additionally, at least one officer is responsible for preparing minutes of director and shareholder meetings and for authenticating records. An officer may simultaneously hold more than one office in the corporation.

Required Reports

A report must be filed with the Maine Secretary of State each year, except for the first year of incorporation. This report must be filed each year between January 1 and June 1 in the calendar year following the year of incorporation, and must indicate:

• The corporation's name and where it was incorporated
• The address of its registered office and the name of its clerk
• The address of its principal office and name of its registered agent, if a foreign corporation
• A brief statement of the nature of the business in which the corporation is engaged
• The names and business or residence addresses of the president or chief executive officer, the treasurer or chief financial officer, and all directors (or shareholders, if no directors)

Each corporation (except for closed corporations) must also file an annual financial statement, not later than five months after the close of the corporate fiscal year, which includes its year-end balance sheet, income statement, and a statement of change of shareholders' equity, unless this information appears elsewhere in the financial statements.

Taxes

Maine's corporate tax structure consists of four brackets with a top rate of 8.93 percent; the top bracket takes effect when the income level reaches $250,000. Among states levying corporate income taxes, Maine's top rate ranks ninth highest nationally.

"S" corporation status is recognized by the State of Maine.