Maine offers a favorable business environment with a long history of entrepreneurship and supporting businesses. Maine has been named the best state in New England and one of the best states for employment vitality of women-owned businesses. Maine has invested $8 million in advancing diversity in the business community and $21 million to expand broadband access throughout the state. Read on to learn how to start an LLC in Maine.
What Is a Maine LLC?
A limited liability company or LLC is a legal business entity that offers the owners, called members, liability protection and simplified administration, including pass-through taxation. A Maine LLC is an LLC based in Maine or doing business in Maine. All Maine LLCs must file their Articles of Organization with the Maine Secretary of State.
What to Consider Before Forming an LLC in Maine?
Before forming an LLC in Maine, you should decide on the type of business entity that best fits your goals. A corporation may be the best business structure if you plan to take the company public. However, if you need a simple setup, liability protection, and minimal annual filings, an LLC can be a business entity that will protect your personal assets and add credibility to your business.
Once you’ve settled on creating an LLC, you’ll want to do market and customer research to identify opportunities and hone in on your target market. You’ll also want to create a business plan, including the company vision, mission, profitability analysis, and cash flow.
8 Steps to Start an LLC in Maine
If you’re ready to start an LLC in Maine, the initial steps include deciding on a name, filing for registration, and securing any necessary licenses. Here are the steps to start an LLC in Maine:
Step 1: Decide on a Business Name
A business name is important to distinguish your brand and build trust with the public. For that, consider choosing a name that encapsulates the business offerings and is easy to remember. The business name can’t be the same as existing business entities in the state. For LLCs, the name must include “limited liability company” or one of its abbreviations.
You can check possible names and web domains during the name selection process. A Google search of possible names will show you which websites exist with that name or similar names so that you can secure a web domain for your business. Some businesses also choose to use a DBA or fictitious name.
You can check with the Maine Secretary of State’s corporation and business entity database to confirm that your chosen business name isn’t already taken. You can also search for businesses with the same name nationwide. Also, search the US patent and trademark office to ensure the name isn’t trademarked.
Step 2: Choose a Registered Agent
Once you have a name, you’ll need a Maine registered agent. In Maine, a registered agent is an individual or business entity designated to receive and accept legal documents on behalf of the business. The registered agent must have a physical address in Maine and be available during normal business hours to accept service of process in case of court proceedings.
The Maine registered agent can be any Maine resident aged 18 or older, a registered Maine business entity, or a foreign business entity authorized to do business in Maine. You can also be your own registered agent for the business.
Step 3: Prepare and File LLC Articles of Organization
Filing articles of organization is essential to form an LLC. This legal document provides the necessary information about the LLC, such as its name, address, purpose, and the names of its members or managers.
This protects the owners from liability, as their personal assets are generally separate from the company’s debts and liabilities. You’ll also need to pay the $175 Maine filing fee. After filing with the Maine Corporations Division, the LLC becomes a legally recognized entity separate from its owners. You’ll usually get confirmation within 10-15 business days.
Step 4: Draft an LLC Operating Agreement
An LLC operating agreement is a legal document that outlines the rights, responsibilities, and operating procedures of the members of an LLC. It serves as a contract between the members and governs the internal affairs of the company, including the distribution of profits and losses, management structure, decision-making process, and dispute resolution.
An LLC operating agreement is a document that legally outlines the rights, responsibilities, and operating procedures of the members of an LLC. It serves as a contract between the members to govern the company’s operations, including management structure, decision-making process, dispute resolution, and the distribution of profits and losses.
An operating agreement outlines the company’s vision, mission, responsibilities, meeting schedule, buyout and buy-sell rules, and procedures for decision-making.
What’s Next After Filing an LLC in Maine?
After you form an LLC in Maine, you’ll need to keep the LLC active and compliant. That includes additional steps to set up the business plus annual filings.
Step 5: Apply for EIN
Once the business is established, the next step is to apply for an employer identification number (EIN) with the IRS. You’ll need an EIN to open a business bank account, hire employees, or file business taxes. You will need an EIN for each business entity or LLC.
After you’ve applied for an EIN, you’ll receive a confirmation letter from the IRS with the number. If you have lost your EIN, the simplest way to find your EIN number is to check the confirmation letter. You can also contact the IRS for help in locating it.
Step 6: Open a Business Bank Account
Opening a business bank account for your LLC is important in separating personal and business expenses. To open a business bank account, you can choose between local banks, credit unions, or an online bank.
It’s important not to mix your personal funds with business funds. By creating a separate account, you can track your business transactions easily, maintain accurate financial records, and demonstrate the legitimacy of your business to clients, suppliers, and financial institutions. It also helps to protect your personal assets and ensures that you comply with legal and tax requirements.
Ask the bank about interest and fees to choose the best account for your business’s needs.
This allows you to keep expenses low and ensures you have access to a debit card, checks, and other features needed for your business.
Step 7: Obtain Licenses or Permits
To start, you will need to register the LLC with the Secretary of State. You may also need to apply for a business license from your city or county and obtain additional permits or licenses from the state or local government. You can check the Maine Corporations Division and contact your local Chamber of Commerce for specific requirements.
Step: 8: Get Business Insurance
In Maine, business owners are required to carry only worker’s compensation insurance. However, additional coverage may be necessary depending on the type of business. Other business insurance to consider include:
- Professional liability insurance
- Umbrella insurance
- Directors and officers’ liability insurance
- Liability insurance
- Property insurance
- Commercial vehicle insurance
- Business owner’s policy
- Cyber insurance
4 Types of LLCs to Consider in Maine
There are four types of LLCs to consider in Maine, depending on your business goals and area of operation. These include:
1. Single-member LLC
A single-member LLC is formed with a single owner or member. If you’re forming an LLC independently, you’ll create a single-member LLC to gain the same legal protection of your personal assets from business liability. A single-member LLC offers simplified administration and management, along with pass-through taxation, so you can easily get the business up and running in Maine.
2. Multi-member LLC
A multi-member LLC is any limited liability company with two or more members. A multi-member LLC is a great option for business partners or several individuals planning to form a business together. There’s no limit on the number of members an LLC can have. With a multi-member LLC, you gain a legal business entity and personal liability protection, along with other LLC benefits like pass-through taxation and simplified administration.
An L3C is a low-profit limited liability company designed for social outreach and non-profit use. An L3C has the same liability protection and pass-through taxation as a standard LLC. Unlike a 501(c)3 corporation, which must adhere to strict requirements, an L3C is relatively simple to set up and maintain. L3Cs and LLCs have the same legal structure. You might choose to create an L3C if your business purpose focuses on the betterment of society versus earning a large profit.
PLLCs are professional services businesses with the same legal protection as a standard LLC. According to Maine law, accountants, advanced practice registered nurses, attorneys, chiropractors, dentists, optometrists, osteopathic physicians, physicians and surgeons, physician assistants, podiatrists, registered nurses and veterinarians, and any other professionals required by state law to have a license as a precondition to engaging in that profession will need to form a PLLC. At least one member must be licensed in each professional service the LLC offers.
Launching Your Maine Business
Launching a Maine business is a big undertaking. Maine offers excellent resources to help small businesses get started. But you also need a team you can rely on. Get doola’s LLC formation services to streamline your business formation process.
For a low fee and fast service, doola guarantees formation in any state, including a Maine LLC. Get doola to help with company formation, EIN, and opening a business bank account so you can focus on your core business offerings.
Why should I file an LLC in Maine?
Filing an LLC in Maine creates a legal business entity that can offer personal asset protection and give legitimacy to your business. An LLC simplifies administration and is fast to open.
How long does it take to get an LLC in Maine?
Opening an LLC in Maine can take 10-15 business days plus mail time. However, processing time can vary. How you submit the filing documents can affect the total time.
How much does an LLC cost in Maine?
It costs $175 to file the certificate of formation in Maine. If you hire a registered agent or use a business formation service, those costs can be higher. Check total costs and consider the value it adds to your company to choose the best option for your company.
How is an LLC taxed in Maine?
In Maine, LLCs have pass-through taxation by default, so members will report income on their individual income tax returns. However, LLCs can also elect to be taxed as an S-corporation or a C-corporation.
Can I change the name of my LLC in Maine after it’s formed?
Can an LLC in Maine be taxed as an S-Corporation?
Yes, a Maine LLC can elect to be taxed as an S-corp by filing Form 2553 with the IRS. All LLCs in Maine can be taxed as either an S-corporation or a C-corporation.
Do I need to have a physical office for my LLC in Maine?
Yes, you must have a physical office for the Maine LLC and a Maine registered agent. For the registered office, someone must be available during regular business hours. If you don’t have a physical office for your Maine LLC, you could use a registered agent service.
Can I dissolve or close my LLC in Maine if I no longer need it?
Yes, you can dissolve or close a Maine LLC by filing form MLLC-11C, a certificate of cancellation. You’ll submit this with a filer contact cover letter with the Maine Secretary of State, Bureau of Corporations, Elections, and Commissions.