Lambert Rudman
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Characteristics of business forms in Maine

Our Maine attorneys ensure both lenders and borrowers efficiency and cost efficiency in any transaction to keep both parties involved in the commercial loan satisfied.

 

RESOURCE:

Characteristics of Business Forms in Maine

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Sole Proprietorship

  • Liability Protection: no statutory protection

  • Tax Aspects: individual taxation

  • Creation: no action required

General Partnership

  • Liability Protection: no statutory protection; partners are jointly and severally liable for debts and liabilities of the partnership. 31 MRS 281 et seq.

  • Tax Aspects: pass-through, unless an election is made to be taxed as a corporation

  • Creation: must be at least two partners (state law)

Limited Liability Partnership

  • Liability Protection: protection from liabilities "arising from omissions, negligence, wrongful acts, misconduct or malpractice committed by another partner, employee, agent or representative of the partnership." No protection for normal debts or a partner's own act or omission "or that of any person under the partner's direct supervision and control." 31 MRS 295-A

  • Tax Aspects: pass-through, unless an election is made to be taxed as a corporation. 61 Fed. Reg. 66,584, amending esp. Reg. 301.7701-1 through 7 ("check the box")

  • Creation: a general partnership with filing requirements; if those are not met, can revert to a regular general partnership. 31 MRSA 801 et seq.

Limited Partnership

  • Liability Protection: General Partner- no statutory protection; partners are jointly and severally liable for debts and liabilities of the partnership. Limited Partner- limited to investment unless "veil" is pierced, as long as the limited partners do not participate in the control of the business

  • Tax Aspects: pass-through unless an election is made to be taxed as a corporation

  • Creation: must be at least one general partner and at leas one limited partner (state law) 31 MRS 401 et seq.

Limited Liability Company

  • Liability Protection: limited to investment unless "veil" is pierced

  • Tax Aspects: pass-through, unless an election is made to be taxed as a corporation

  • Creation: state law and tax regulations now allow one member, if desired

Sub S Corporation

  • Liability Protection: limited to investment unless "veil" is pierced

  • Tax Aspects: pass-through, with some restrictions. IRC 1361 et seq.

  • Creation: limit of 75 shareholders, no non-resident aliens or entities (except for certain trusts)

C Corporation

  • Liability Protection: limited to investment unless "veil" is pierced

  • Tax Aspects: separate entity with double taxation of dividends

  • Creation: may have one or more shareholders, directors, and officers