Not every limited liability company (LLC) lasts forever. In fact, many LLCs in Maine are only intended to operate for a designated time period. Whatever your reasoning for closing up shop, the state of Maine has a specific process that all LLCs must go through before they are considered to be officially dissolved.
Which steps are involved in the Maine LLC dissolution process? Are there different processes for businesses based in Maine and those expanded from other states? When do you need to dissolve your LLC? We’ll answer all of these questions and more in this article.
How Do You Dissolve a Maine LLC?
When closing a business registered as an LLC in the state of Maine, you’ll need to take care to dissolve your business exactly as the state outlines. The most important part of this process is filing the correct paperwork with the relevant legal entities, but this is far from the only vital step.
In addition to filing documentation of your Maine LLC dissolution, you will need to liquidate the assets of your business, notify all individuals and business entities that have an interest in your company, and resolve any outstanding liabilities with vendors, suppliers, or clients.
There are potentially severe penalties for failing to comply with the Maine LLC dissolution process, and you as a business owner could be personally responsible for your LLC’s liabilities and debts. Therefore, it’s extremely important that you complete each step outlined in this guide to ensure an effective and compliant dissolution.
As for the question of when you should dissolve your LLC, you should do this as soon as you’re certain you will no longer conduct business through this entity. This gives you an opportunity to close up shop with the knowledge that you’re not transacting any business after you start the dissolution process.
Dissolution for Domestic Maine LLCs
Is your LLC based in Maine, and registered as a domestic entity in this state? If so, you’ll start your dissolution process with a document known as the Certificate of Cancellation. This form will include some crucial information about your business, so you should fill it out carefully and accurately.
Among the info you’ll need to complete this form is the official business name of your LLC, the date your LLC was originally registered and the effective date of your LLC’s dissolution, along with your name, signature, and the date. You are also allowed to create additional sections and attach them to the form if you think the information is necessary and relevant to your dissolution.
In addition to your Certificate of Cancellation, you also need to submit a cover letter including the following information: the name of your LLC, the type of form you’re filing, your chosen processing speed, the amount of filing fee enclosed, and your name and contact info.
Once you’ve completed these forms, you’ll need to submit them to the Department of the Secretary of State by mail or in person. You will also need to include a $75 filing fee, which can be paid by check or by acquiring a credit card payment voucher from the Secretary of State.
The typical processing speed for this filing is from 5-10 business days. However, there are expedited options available that can speed up your dissolution. For an additional $50, you can upgrade to 24-hour processing, and the state will process your filing immediately for an additional $100.
But what does this process look like for a business that was formed outside the state and then expanded to Maine?
Dissolution for Foreign LLCs in Maine
If you operate a foreign LLC in the state of Maine, the dissolution process looks slightly different than it does for domestic entities. In fact, it’s actually technically called a cancellation rather than a dissolution. Interestingly, this process has nothing to do with the Office of the Judge of Probate. Instead, you’ll deal directly with the Secretary of State, cutting out your local county’s middleman.
To dissolve a foreign LLC in this state, you’ll first complete the Statement of Cancellation of Foreign Qualification document. Much of the information for this form is the same as the info provided for the Certificate of Cancellation, but there are some differences for the foreign version.
This form requires your LLC’s business name, the jurisdiction where your LLC was originally formed, the date of your LLC’s registration, the date your LLC was granted permission to conduct business in the state of Maine, a mailing address for potential future service of process deliveries, and the address of your LLC’s primary business location, along with your name, signature, and the date.
You will also need to complete the cover letter, exactly as we described it in the previous section, with the name of your LLC, the type of form you’re filing, your chosen processing speed, the amount of filing fee enclosed, and your name and contact info. The Statement of Cancellation has a $90 filing fee, and the filing process and processing speeds are the same as they are for the domestic version of this document.
Involuntary Dissolutions in Maine
We should also discuss the potential for an LLC to be involuntarily dissolved by the state. There are several reasons this could happen, and most of them revolve around significant mistakes made by the LLC’s ownership group.
For instance, Maine could involuntarily dissolve your LLC if you fail to pay any fees or penalties assessed by the state, fail to provide the state with an annual report, fail to maintain a registered agent, fail to notify the state that you have changed registered agents, or file false information about your company with the state.
It’s obviously never advisable to operate your LLC in a way that leads to the state dissolving it against your will. However, the penalties can be even steeper than you might realize. For example, reinstating your LLC in Maine can be a costly endeavor, as reinstatement penalties can cost you up to $600.
In addition, if you keep operating your business after the state involuntarily dissolves it, you could open yourself up to all sorts of legal issues due to the continued operation of a non-compliant entity. In general, you should be as careful as possible when it comes to following the rules and regulations in this state.
It’s not that the process for dissolving or withdrawing your LLC in Maine is terribly difficult. However, it is a process that you need to take great care to complete in a compliant fashion, or you could expose your business to a wide variety of potential legal complications and financial penalties. Trust us when we say it’s much smarter and easier to simply follow the directions with care to avoid any issues.
Do you need more information about operating an LLC in Maine? Take a look at the following resources: