Maine, a business friendly state has witnessed an increase in its GDP from $46.62 billion in 2000 to $52 billion in 2006 and in 2017; it increased to $52.8 billion. Some of the industries that have shown steady growth in this billion dollar economy include manufacturing, management of companies and enterprises, arts, entertainment & recreation, healthcare and social assistance, and accommodation and food services. The growing business economy is responsible for the rise in the number of startup companies in Maine.
Advantages of setting up an LLC or Corporation
There are several advantages or benefits that business can enjoy when they register a new company in Maine. One of the primary benefits is that the labor costs are 6% less than the national per capita rate, which transforms into savings. If you were to set up an LLC or a corporation in Maine, then the specific advantages of these two types of entities are:
Advantage#1: Salient benefits of Corporation or LLC formation
- Independent Life: If you register a new business in Maine as an S Corporation then it will enjoy an independent life. The business entity will continue operations undisturbed even if it faces the death of one of its stockholders.
- Raise additional Funds: If you register a new company in Maine as a C Corporation then the business entity will be able to raise additional funds through the sale of stock.
- Change in Ownership: If you have formed an S Corporation in Maine then sale, and purchase of stock will be able to facilitate changes in ownership.
- Limited Liability: The owner of an LLC startup company in Maine will be able to enjoy limited liability protection, which means creditors can sue the LLC but not the owner or investors.
- No Privilege Tax: One of the benefits for LLC’s in the state of Maine is that there is no franchise or privilege tax applicable to businesses. As a result, the business entity will not be subject to any state tax on the net worth or income.
- No Minutes of meetings: Unlike a corporation, an LLC startup company in Maine will not be required to maintain any minutes of the meetings or resolutions.
Advantage#2: Business Incentives
Apart from the specific advantages of corporation and LLC, if you register a new business in Maine, there are several benefits that your business can leverage from. These benefits are considered as business incentives and are provided by state and federal agencies. Some of the most popular incentive programs include:
- Pine Tree Development Zones (PTZ): This is one of the most popular business incentive programs. In order to enjoy the benefits, you have to register a new company in Maine especially in the development zones and in eligible sectors, which are:
– Financial Services
– Aquaculture and Marine Technology
– Composite Materials Technology
– Advanced Technologies for Forestry and Agriculture
– Environmental Technology
– Information Technology
– Manufacturing and Precision Manufacturing
As a part of this program, the business entity will be able to enjoy corporate tax credits as well as sales and use tax exemptions on real and personal property.
- Finance Authority Of Maine: This is a quasi-governmental agency that provides a wide variety of financing options to startup companies in Maine. The financing options include:
– Maine Rural Development Authority: This provides financial assistance to business entities with maximum funding of $500,000.
– New Markets Capital Investment Credit: As a part of this option, an investor including a business entity that makes a qualified equity investment especially in a business that is considered to be a part of a low-income community, can get investment credit that is equal to almost 39% of the investment.
If you register a new business in Maine, there are several other incentive programs that you can benefit from including Technology Tax Credits, Community Development Block Grant Program, Maine Manufacturing Extension Partnership (MEP), Employment Tax Increment Financing (ETIF), Business Equipment Tax Exemption (BETE), and Business Equipment Tax Reimbursement (BETR) among others.
Are there any Disadvantages of Incorporating in Maine?
Are you wondering if there are any disadvantages if you register a new company in Maine? The disadvantages are very few and almost inconsequential. For example, the time taken for registration of a corporation is longer as compared to a partnership or the fee for foreign LLC’s and corporations is higher than that of domestic business entities. The truth is that the advantages of doing business in this state are much more and will enable your business achieve its intended growth.