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Free Guide to Start an LLC in Maine

Starting a business in Maine can be an exciting time. Before selling your product or service though, the nuts and bolts of licenses, registrations, and taxes must be completed.

The guide below will show you the DIY process of forming an LLC in Maine. However, you can also use an online LLC service handle the paperwork for you. We reviewed and ranked the 7 best available.

 

The Top 2 Worth Considering:

  • Northwest Registered Agent is a great option if you are looking for premium customer support.
  • IncFile is ideal if you are looking for the best pricing with excellent features.

 

Step 1: Name Your LLC

Selecting a name for your Maine LLC is a first step, yet a very important one. A name that is unique and easy to remember is helpful in finding potential clients or retaining customers.

The name should indicate the product or service. It should also follow guidelines set forth by the state of Maine.

The name of an LLC will likely appear on business cards and stationary, marketing materials, a website, legal contracts, business bank accounts, invoices and/or a building directory.

Maine law requires that the business name includes the words, “Limited Liability Company,” “Limited Company,” “LLC,” “L.L.C.,” “LC,” or “L.C.” The abbreviations “Ltd.” and “Co.” may also be used. It must be different than other names already registered. Features that are not “distinguishable” include the following:

  • The addition or deletion of articles, punctuation, capitalization or special characters.
  • The inclusion of a different word or abbreviation that designates the type of entity.
  • The implication that the name is associated with the government.

For Example

Let’s imagine that someone is considering opening a flower shop in Portland, Maine. The name she is considering, Flowers by Fanny, is already in use. Instead, she decides to legally name her business Fanny’s Florals and Design, LLC.

Determine the Name is Available

Following the selection of a name but before filing the Certificate of Formation, check to ensure that your name is unique on the Corporate Name Search of the Maine Secretary of State website. Searching in other places, such as online, is also a good idea.

After you have determined that your chosen name is “distinguishable,” the name can be registered in order that you have exclusive rights for 120 days.

Optional: Name Reservation

Sometimes a situation may arise where an individual wants a particular name but needs time to organize his/her company before filing paperwork to create an LLC. In this case, a name can be reserved for 120 days in the state of Maine. The reservation may not be renewed.

The downside is that it does cost $20 for the reservation. Expedited processing is also available. The reservation can be processed in 24 hours for an additional $50 fee or done immediately for an additional $100 fee. Standard processing time is five to ten business days.

If paying by credit card, submit a completed credit card voucher with the reservation.

An Application for Reservation of Name can be completed and either mailed or delivered to the following address:

Secretary of State

Division of Corporations, UCC and Commissions

101 State House Station

Augusta, ME 04333-0101

 

Step 2: Choose a Registered Agent

Every LLC in Maine is required to have a registered agent. This agent can be an individual or a company.

The role of the registered agent is that of a contact person between the LLC and the state. As stated on the website of Maine’s Bureau of Corporations, Elections and Commissions, the registered agent “is the individual who serves as the corporation’s contact to receive service of process in legal matters.”

Simply put, the process agent receives communications or documents from the state involving such things as taxes or lawsuits and communicates them to the LLC.

Some may wonder why a Maine registered agent is necessary. The importance of the agent is to ensure that someone is always available to receive important documents even if the business owner leaves the office, goes on vacation, or is otherwise away. Also, having a registered agent is especially important if a physical office does not exist in Maine.

The owner of the LLC can designate a registered agent on the Certificate of Formation application.

Individual as Registered Agent

Most importantly, the individual must be a resident of the state of Maine. An LLC cannot act as its own registered agent. However, a member or manager can act as agent for the LLC.

Still, using a third party ensures that nothing falls through the cracks. The third party can be an accountant, an attorney, or even a friend. The agent must have a physical and mailing address in Maine.

Registered Agent Service

If using a service, the registered agent must be a business or professional. We recommend either using an LLC formation service (like Incfile or Northwest Registered Agent) which gives you a free registered agent or ordering a registered agent service by yourself if you choose to DIY your Alaska LLC formation.

 

Step 3: File the Formation Documents with State

Let’s assume that fictional Fanny has selected both the name for her LLC and the registered agent. She is ready to complete the paperwork (called the Certificate of Formation) that actually creates Fanny’s Florals and Design, LLC in Maine.

The filing fee for the Certificate of Formation is $175, and standard processing time is 5 to 10 business days. Expedited processing is also available. The reservation can be processed in 24 hours for an additional $50 fee or done immediately for an additional $100 fee.

Checks are payable to the Maine Secretary of State. If paying by credit card, submit a completed credit card voucher with the reservation.

The applications and payment can be sent or delivered in person to the following address:

Secretary of State

Division of Corporations, UCC and Commissions

101 State House Station

Augusta, ME 04333-0101

An online filing option is not available.

 

Step 4: Create an Operating Agreement

An operating agreement in the state of Maine is recommended though not required. The agreement is a contract that defines the operations of the LLC, includes terms and conditions, states the responsibilities of its members, and ensures legal protections of its members.

All owners of the LLC must be in agreement of the terms in the agreement and sign before a notary public.

The operating agreement is useful for both multi-member and single-owner LLCs. In both cases, the agreement provides protections.

For example, in the case of the multi-owner LLC, the terms can stipulate what should happen if a death or divorce occurs among one of its members. In the case of the single-owner LLC, the agreement could be used in court as evidence that the LLC is separate from the individual owner.

The operating agreement can be created in two ways. Some individuals may choose to write the agreement on their own, using an online template. In this case, forms are available that are specific to state. Be sure to use the correct multi-member or single-member form.

The alternative is hiring an attorney to create the document. The benefits of using an attorney are ensuring the document doesn’t exclude any important information, adheres to state law, and invalidates default provisions that may not be what you wish.

 

Step 5: Get an EIN

An EIN is an Employer Identification Number. Anyone who runs their business as a corporation or partnership must file for this 9-digit number in order to identify the tax accounts of a business. The number can be applied for in one of the following three ways:

Online

Applying online is the quickest method. The process can be completed between 7 a.m. and 10 p.m. EST, Monday through Friday. When the form is completed, the information will be immediately validated and a number issued while you are still online. In order to apply online, a valid individual taxpayer number, such as a Social Security number, is required.

Fax

Form SS-4 can be downloaded, completed and faxed to 855-641-6935, twenty-four hours, seven days per week. The EIN will be provided within four business days.

Mail

If either of the above methods are unavailable, Form SS-4 can be mailed, though processing will take approximately four weeks. The form can be mailed to the following address:

Internal Revenue Service Operation

Attn: EIN Operation

Cincinnati, OH 45999

Think you’re ready to open up shop now? Guess again!

 

Step 6: Taxes, Licensing & Income Reporting

Businesses like Fanny’s Florals and Design, LLC may be official after completing the above steps, but it is important not to overlook a few critical details.

Taxes

On the federal level, most LLCs do not pay taxes directly to the government. Instead, they report income and losses on the owner’s personal 1040 tax returns. Schedule C is often used for reporting. Unless the LLC chooses to be taxed as a corporation, a single-member LLC is taxed as a Sole Proprietorship and a multi-member LLC is taxed as a Partnership.

Similarly, most LLCs will pay state tax on pass-through income via their personal income tax returns. The exception is if an election is made to tax the LLC as a corporation.

Unlike some states, Louisiana does not require LLCs to pay a franchise or privilege tax.

If your LLC has employees, you will need to pay a withholding and unemployment tax. Businesses that sell merchandise will need to pay a sales or use tax. Registration with the Department of Revenue is required for sales, use and withholding taxes.  Registration with the Maine Department of Labor is required for the unemployment tax.

Finally, an LLC may need to file and pay a local tax to a city, municipality, or county.

Licensing

General licenses are issued at the local level. For contact information for your municipality,visit Maine.gov Local Government portal.

A  professional or occupational  license may also be needed before a business can begin operations. Check out the Resources by Profession listing on Maine’s website.

Reporting

After an LLC is formed, an annual report must be filed with the state of Maine by June 1 each year. An emailed reminder will be sent prior to the due date.

The filing fee is $85. Failure to file the annual report and pay the fee will result in a loss of good standing. A penalty will also be assessed.  If the penalty is not paid, the LLC risks dissolution by the state.

The reports can be filed online, or a hard copy can be printed and sent through the mail or delivered in person to the following address:

Secretary of State

Division of Corporations, UCC and Commissions

101 State House Station

Augusta, ME 04333-0101

When all of the mechanics of setting up an LLC in Maine have been completed, someone like Fanny can get down to the business of setting up a website, creating a logo…or purchasing flowers!

 

Need Help Creating Your LLC?

We recommend LLC formation services because it allows you to knock off an important thing off your checklist so you can focus all your energy on actually starting a business.

Can you do it yourself? Absolutely.

However, a service that forms an LLC for you will help with ongoing maintenance and keep you notified of any requirements you should adhere to.

As we mentioned earlier, IncFile and Northwest Registered Agent are the top LLC services available. If you’re not familiar with them, as a point-of-reference many of our readers like to compare them to the most well known LLC service, LegalZoom.

IncFile vs LegalZoom or Northwest Registered Agent vs LegalZoom