Think about your LLC a year from now: raking in profits and taking Maine by storm. 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.
While you’re making plans and dreaming big, 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.
Quick Note: If you’d like to keep your costs of starting an LLC as simple and low as possible, consider hiring ZenBusiness – a reliable business formation service. To get a better idea of the value they offer and how it works, we compared them to the two most well known services:
Bare Minimum Cost to Start an LLC in Maine
Optional: LLC Name Reservation Fee
- $20 with optional expedited service for $50 (24-hour) or $100 (immediately)
Required: Certificate of Formation Fee
- $175 with optional expedited service for $50 (24-hour) or $100 (immediately)
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.
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.
LLC Formation Service
Starting an LLC 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 the time on research, paperwork, and filings.
Most of these services (like ZenBusiness and Northwest) offer basic LLC formation service like Articles of Organization 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 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 and on-time, saving you from the penalties of delinquent filings and the stress of having to do it yourself.
Not all registered agent services are equal, so you’ll need to be careful in choosing one. Fortunately, we’ve done some research for you, and we recommend Northwest Registered Agent. In addition to registered agent services, Northwest also handles LLC formation — and they’ll include a registered agent free for one year when you form your business with them. We think they’re the most reliable choice, but if you’d like to evaluate all your options, check out our Best Registered Agent Services guide.
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 $500-2000.
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.
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.
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, it’s 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.
What If I Don’t Pay?
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.