You have big plans, but before your business can officially take off, you’ll need to make a bit of an investment.
And we’re not talking about renting office space or paying employees — before you sell a single product, there are startup costs associated with launching an LLC in Maine.
Make sure that you consider all the possible costs associated with starting an LLC. To help you out, we’ve compiled the most common Maine startup fees here.
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Overall Maine LLC Formation Costs
LLC Name Reservation Fee
This isn’t a mandatory fee — name reservation is a completely optional part of the process. But if your LLC isn’t quite ready and you’re worried you might lose your name, it could be worth it. For a $20 fee, you’ll receive 120 days of exclusive rights to your desired name. However, filing the Articles of Organization automatically registers your name, so if your business is ready to go, it’s more efficient to start there.
To clarify, most states don’t require name reservations, and they’re rarely necessary. If you’re concerned about someone else registering the name you want, you could opt to simply form your LLC instead of reserving the name.
Whether you reserve your business name or not, you should always perform a Maine business name search to make sure the name you want is available.
Certificate of Formation Fee
This is the big one, the most important (and most expensive) form that you’ll file to start your Maine LLC. It costs $175, but without it, your business doesn’t exist in the eyes of the state, so it’s $175 well spent. You only need to file the Certificate of Formation once, so after it’s accepted, you won’t need to pay this fee again. Forms are available on the Secretary of State website.
The information you’ll need to file your Certificate of Formation includes the official business name of your LLC, the effective date of your LLC’s formation, an indication that your business is a low-income LLC (if applicable), an indication that your business is a professional LLC (if applicable), the name and CRA Public Number of your registered agent (if you have a commercial registered agent), the name and address of your registered agent (if you have a noncommercial registered agent), the date, and the name and signature of your LLC’s authorized person.
Before we move on, we’ll mention that if you’re forming a Maine professional LLC, you’ll use the same Certificate of Formation form used by standard LLCs.
Depending on the type of business you’re registering and where you’re located in Maine, you may need to acquire certain licenses before conducting business. For example, a restaurant would need to obtain a “Food Service Certification” from the Department of Health before serving customers.
The state has particular licensure requirements, but so do individual cities, so you’ll need to check with both. Visit the Maine Business Licensing Division to determine which licenses you may need.
What are some of the most commonly required business licenses for Maine LLCs? If your business operates in a regulated industry, you will probably need some sort of professional license to operate in compliance with state law. On the municipal level, things like alarm permits, building permits, and zoning permits are all very common. Some Maine municipalities have general business licenses as well.
LLC Formation Service
Starting an LLC in Maine can be a complicated and time-consuming process. If you want to spend less time on paperwork and more time planning your business, you might opt for an LLC formation service. These services take care of the registration process for you, so you don’t have to spend time on research, paperwork, and filings.
Most of these services (which are often frequently used LegalZoom alternatives) offer LLC registration services like Certificate of Formation filing, tax consultations, and phone/email support for a flat rate, with options to pay more for premium packages with premium services like Employer Identification Numbers, operating agreements, and expedited filing.
Registered Agent Service
Appointing a Maine registered agent is an important part of your LLC formation process. Your registered agent is responsible for handling sensitive legal and tax documents and keeping your business compliant with Maine business law. In short, you need an agent you can trust.
While you can be the registered agent for your own LLC, this puts pressure on you to keep up with business filings and potential legal disputes. Sometimes it’s better to hand off that responsibility to a professional. A registered agent service ensures that your annual reports and other forms are filed efficiently, saving you from the penalties of delinquent filings and the stress of having to do it yourself.
If you need to change registered agents or resign as a registered agent in Maine, check out our full guides on these topics.
If you have questions or concerns about the LLC formation process or if it’s the best business structure for you, sometimes it’s best not to take chances and consult an attorney. They’re not cheap, but they can provide essential business advice, professional filing assistance, and peace of mind.
Some attorneys offer free consultations (usually 30-60 minutes) but will charge by the hour after that. On average, business attorneys charge between $150-350 per hour. Some will offer a flat rate for setting up an LLC, which can range from $500-2,000.
Cost variations depend on the experience and location of the lawyer. Make sure you’re finding the right fit for your LLC by searching, comparing, and contacting lawyers. Sites like Avvo offer access to entire databases of Maine business attorneys, so you can analyze all of your options before sitting down for a consultation.
If you don’t want to go digging for your own attorney, we compiled the following list of highly rated business lawyers in Maine. All of these attorneys are primarily focused on the business world, they all receive five-star ratings from clients, and they all have excellent Avvo ratings.
Foreign Qualification Fee
This only applies if your LLC was formed in another state and is now expanding into Maine. In this case, your company would need to foreign qualify by filing the “Statement of Foreign Qualification to Conduct Activities” instead of the Certificate of Formation.
All foreign business entities are required to foreign qualify in Maine, or they could incur some pretty severe penalties. Avoid them by submitting the Statement of Foreign Qualification and paying a $250 fee. This form may be pricier than the Certificate of Formation, but it’s similarly a one-time filing, so you won’t have to pay the fee again.
LLC Annual Fees
Some LLC formation fees are for the startup — the Certificate of Formation, business licenses, and name reservation — but there are also some maintenance-related fees. For example, Maine LLCs are required to file an annual report each year to update their information with the Secretary of State. Annual reports must be filed online or by mail between Jan. 1 and Jun. 1 and cost $85, so you can write that expense into your yearly budget.
The information required to file your annual report includes the official business name of your LLC, the name and CRA Public Number of your registered agent (if you have a commercial registered agent), the name and address of your registered agent (if you have a noncommercial registered agent), your LLC’s principal office address, a brief description of your LLC’s business in Maine, and the name and address of at least one of the LLC’s members and/or managers.
For more info on annual reports for Maine LLCs, check out our full article on this topic!
By default, LLCs are classified as “pass-through” entities by the federal government, meaning that the business itself doesn’t file a tax return. Instead, its owners and/or members report income and losses on their personal returns. Maine doesn’t impose a franchise tax on its LLCs either. This makes taxes relatively simple for Maine LLCs.
That said, certain circumstances could cause your business to pay specific taxes. If you maintain employees, you will need to pay a withholding and unemployment tax. And if you sell merchandise, you’ll be subject to a sales or use tax. These require registration with the Department of Revenue and Department of Labor.
It’s slightly less common, but if you’ve elected to have your LLC taxed as a corporation, you’ll need to pay the corporate income tax, which ranges from 3.5-8.93%, depending on your company’s income.
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Looking at all these fees, you might be thinking: how can I pay less? While you might be tempted to look for loopholes or find a way around them, this could cause you bigger problems in the future.
Because they’re required every year, annual reports are the most common forms to forget. If you don’t file by June 1, the state will assess a $50 fee, and if you still haven’t filed 65 days later, the state can administratively dissolve your LLC. Plus, fail to submit your annual report or other necessary filings (like registered agent changes) and your LLC will lose its good standing with the state. WIthout good standing, you won’t be able to foreign qualify in most other states, apply for some business loans, renew professional licenses, and more.
There are also penalties for failure to pay required business taxes, although they depend on the type and amount of the tax. In the end, staying ahead of your filings and payments will save you a lot of money and stress in the future.
Planning Your Expenses
By now, your budget spreadsheet might be looking a little crowded, but have no fear! Most of these are one-time fees that you won’t have to worry about again. Plus, with all these on the books, there won’t be any surprise costs when you register an LLC in Maine.
Soon, you’ll have these fees behind you and you’ll be forging ahead, growing your business and earning profits. As you do, make sure to keep up with the few recurring fees — like annual reports — so your business doesn’t fall out of good standing.
Key Steps for Starting a Maine LLC
- The first step to forming a Maine LLC is to come up with a good name for your business. You’ll want to make sure the name you want is still available and hasn’t already been claimed by another business, so you’ll need to search the state’s business database to verify its availability.
- Next, you’ll need to choose your registered agent. While you can legally serve as your own registered agent in Maine, this role can actually be more of a hassle than you might expect. That’s why we always recommend hiring a reputable registered agent service that can handle the responsibility of this position on your behalf.
- The third step involves the preparation and filing of your Certificate of Formation. You’ll need to fill out the paperwork and pay a $175 fee. Once the state processes this document, your LLC will be officially open for business!
- That’s not the end of the road for the startup process though, as you’ll also need to create an operating agreement for your LLC. Most states do not require LLCs to draft and maintain an operating agreement, but Maine does. The operating agreement is an internal document that outlines how your LLC will operate, and there are several aspects of this document that can prevent messy ownership disputes down the line.
- You will also need to acquire a federal tax ID number (also known as an EIN, or employer identification number). This is essentially a Social Security number for your business, as it is a nine-digit code used to file taxes, hire employees, open business banking accounts, and more.
- Next, you’ll need to register for any relevant taxes with Maine Revenue Services, and also obtain all licenses and permits that apply to your business type. Keep in mind that, depending on the nature of your business, you might require licenses from the federal, state, county, and municipal governments.
Once you’ve finished all of these steps, you’re ready to operate a compliant business entity with the state of Maine!
Key Steps for Maintaining a Maine LLC
After you’ve completed all of the items in the previous section, you’ll need to focus on maintaining your LLC. The first step in this process is to open a business bank account. This will help you keep your business and personal expenses entirely separate, and it will also help immensely with your accounting and taxation responsibilities.
You should also keep detailed records of every financial transaction that takes place with your LLC. This means maintaining a file of invoices for every purchase and sale you make, along with information regarding your employees or contractors and the work they perform for your business.
As we already mentioned, annual reports are a key component of LLC maintenance in this state, and there are harsh financial penalties for delinquent reports. Additionally, you might want to hold an annual meeting to discuss goals and priorities for your LLC, although this is an optional step.
Frequently Asked Questions
Before we wrap things up, let’s take a look at some of the most common questions we hear from readers regarding the LLC formation process in Maine.
What are the state business tax rates in Maine?
If your LLC is taxed like a sole proprietorship or general partnership, you’ll need to pay taxes on your business income at the state’s personal income tax rates (between 5.8% and 7.15%, depending on your income level). If your LLC is taxed like a corporation, you’re required to pay Maine’s 3.5-8.93% corporate income tax on your business revenue.
How quickly does Maine process LLC formations?
The state maintains a real-time turnaround time estimate for LLC formations near the top of this page. At the time of this writing, there was a processing time of 10-14 business days.
How many small businesses are there in Maine today?
The state of Maine is home to more than 140,000 small businesses. Entrepreneurs of all backgrounds and business types find that Maine is a great place to own and operate a small business.
What are the top small business resources and websites in Maine?
The Maine chapter of the Small Business Development Center is a great place to start, as they offer a wide variety of tools and resources for Maine LLCs. The U.S. Small Business Administration’s Maine District Office is another valuable resource, and the state’s small business resource page also has plenty of good info.
Should I form my LLC in Maine, or choose a state like Delaware or Wyoming?
Some people like to form their LLCs in states with favorable legal settings. For instance, Delaware is often seen as the most business-friendly state, as it has an entire court system that’s dedicated solely to business matters. As for Wyoming, this state has some of the most generous anonymity laws for LLC ownership.
However, for most people, your best option is to simply form your business in your home state. Forming in a different state can be a tremendous hassle, and it can add some unnecessary complexity to tax issues as well.
Cost to Start an LLC in All 50 States
We break down the LLC costs in detail in all 50 states. View all of our State LLC Costs guides below.
- Cost to Start an Alabama LLC
- Cost to Start an Alaska LLC
- Cost to Start an Arizona LLC
- Cost to Start an Arkansas LLC
- Cost to Start a California LLC
- Cost to Start a Colorado LLC
- Cost to Start a Connecticut LLC
- Cost to Start a Delaware LLC
- Cost to Start a Florida LLC
- Cost to Start a Georgia LLC
- Cost to Start a Hawaii LLC
- Cost to Start an Idaho LLC
- Cost to Start an Illinois LLC
- Cost to Start an Indiana LLC
- Cost to Start an Iowa LLC
- Cost to Start a Kansas LLC
- Cost to Start a Kentucky LLC
- Cost to Start a Louisiana LLC
- Cost to Start a Maryland LLC
- Cost to Start a Massachusetts
- Cost to Start a Michigan LLC
- Cost to Start a Minnesota LLC
- Cost to Start a Mississippi LLC
- Cost to Start a Missouri LLC
- Cost to Start a Montana LLC
- Cost to Start a Nebraska LLC
- Cost to Start a Nevada LLC
- Cost to Start a New Hampshire
- Cost to Start a New Jersey LLC
- Cost to Start a New Mexico LLC
- Cost to Start a New York LLC
- Cost to Start a North Carolina LLC
- Cost to Start a North Dakota LLC
- Cost to Start an Ohio LLC
- Cost to Start an Oklahoma LLC
- Cost to Start an Oregon LLC
- Cost to Start a Pennsylvania LLC
- Cost to Start a Rhode Island LLC
- Cost to Start a South Carolina
- Cost to Start a South Dakota LLC
- Cost to Start a Tennessee LLC
- Cost to Start a Texas LLC
- Cost to Start a Utah LLC
- Cost to Start a Vermont LLC
- Cost to Start a Virginia LLC
- Cost to Start a Washington LLC
- Cost to Start a West Virginia LLC
- Cost to Start a Wisconsin LLC
- Cost to Start a Wyoming LLC