If you’re looking for a reliable DIY guide for starting an LLC in Maine, look no further.
Below you’ll find all the information you need to launch your business and handle any associated costs. Follow each step carefully and your LLC will be established and ready to hit the ground running.
That said, the process can be complex, with various filings and costs, so if at any point you need help, you can hire an LLC creation service.
Need Help Starting Your LLC?If you want to make sure your LLC is formed correctly, hire an LLC service. Below are the top two that will take care of all the legal paperwork:
ZenBusiness – $39: If getting the most value out of an LLC service is your priority, choose ZenBusiness. They charge one of the lowest rates online and include all the most important features when starting a business. IncFile – $0: If you're on a strict budget and prefer using the cheapest LLC service, choose IncFile. They will form an LLC for free (plus state filing fee) and give you great features along the way.
ZenBusiness – $39: If getting the most value out of an LLC service is your priority, choose ZenBusiness. They charge one of the lowest rates online and include all the most important features when starting a business.
IncFile – $0: If you're on a strict budget and prefer using the cheapest LLC service, choose IncFile. They will form an LLC for free (plus state filing fee) and give you great features along the way.
Step 1: Name Your LLC
What’s in a name? Quite a bit, actually. Your business name is your Maine LLC’s identity, its personality, its reputation. Find a name that sticks in customers’ minds – while conveying your brand qualities – and you’ve struck gold. A unique, memorable name can draw in new customers and keep existing ones coming back.
Your LLC name is going to appear everywhere: business cards, marketing collateral, websites, legal contracts, bank accounts, invoices, directories, and much more. So be sure that it conveys your product, service, brand, and values.
While you can (and should) be creative with your business name, there are certain state requirements that it must follow.
Before you start using your name on legal documents and other materials, ensure that it complies with Maine’s business name requirements. This means it must contain the words “limited liability company” or “limited company,” or one of the following abbreviations: “L.L.C.,” “LLC,” “L.C.,” or “LC.” But it doesn’t end there. It must also avoid obscene language, abusive/unlawful language, and suggested affiliation with public agencies.
You can follow all these rules, but if your name is already taken, it won’t be valid. The name must also be distinguishable from every other name reserved or registered with the state. If you find that your name is unavailable and need to distinguish it, altering the following elements will NOT make it unique:
- Punctuation and special characters
- Capitalization and spacing
- Articles (“a,” “an,” and “the”)
- Conjunctions (like “and,” “but,” and “or”)
- Business type designators like LLC, Ltd., Inc., or LP
Consider this: your friend Fanny wants to open a flower shop in Portland, Maine. The name she wants, Flowers by Fanny, LLC is already in use. So she comes up with a new one: Fanny’s Florals and Design, LLC. This name is similar to the original but includes new words, distinguishing it in the Secretary of State’s records.
Determine the Name is Available
Of course, you will only need to make distinguishable changes if your name is already taken. Don’t make the mistake of ordering business cards, creating advertisements, and using a name on documents like the Certificate of Formation without first confirming it’s available. Use the Secretary of State’s Corporate Name Search to see if there’s an existing business using your desired name.
Maybe you pegged a distinguishable name right away, or maybe it took some modifications, but either way, once you have a unique name, you can lock it down by filing a name reservation.
Optional: Name Reservation
You may have fallen in love with a particular name, but still have some preparation and paperwork to sort out before starting your LLC, and you’re worried that someone will swipe it in the meantime. To calm your nerves, you can reserve that name in Maine for a total of 120 days.
Think about Fanny. After making her name distinguishable, she’s ready to make it official, but if she’s waiting on some paperwork to start her LLC, she can place a hold by sending an Application for Reservation of Name and a $20 payment to:
Secretary of State
Division of Corporations, UCC, and Commissions
101 State House Station
Augusta, ME 04333-0101
You can pay by check or credit card, but if you’re using a card, you must also submit a credit card voucher.
A name reservation can be extremely helpful if you haven’t started your business yet. If your LLC is ready to go, however, you’ll save time and money by skipping this step and simply using that name on your Certificate of Formation, which will register it automatically.
Step 2: Choose a Registered Agent
Fanny’s LLC is quickly taking shape, and if it’s going to operate in Maine, she’ll need a go-between for state and legal communications. This is called the registered agent.
A registered agent is a key component of your budding LLC, handling all of its sensitive communication with the state so you don’t have to. But maintaining an agent isn’t just a convenience, it’s required.
The Secretary of State website states that an LLC “must always have a clerk or registered agent on record,” and that this agent “is the individual who serves as the corporation’s contact to receive service of process in legal matters.”
Taxes, lawsuits, maintenance requirements, and more – the registered agent takes care of it all. If you had to do this yourself, it would pile additional tasks onto your already-full plate. Plus, your agent makes your business available to receive documents even when you’re out of town or away from the office. This is especially important if your physical office is outside Maine.
Now for the practical application, the “how-to.” Declaring a registered agent is a one-step process. You just need to include the agent’s information when filing your Certificate of Formation, and it will be added to your public record. Reach out beforehand and confirm that your agent agrees to the appointment.
You have two options for who can serve as a registered agent: an individual or a company.
Individual as Registered Agent
You may think that an individual registered agent would need specialized training or experience, but this isn’t the case. Anyone can serve as your registered agent, as long as they are a Maine resident, have a physical address in the state, and are at least 18 years old.
Third parties like attorneys, accountants, and consultants are wise choices, but family and friends are options too. You can even serve as your own LLC’s agent, provided you meet the state’s requirements.
Registered Agent Service
It can be a lot easier, though, to use an LLC formation service like ZenBusiness (or even IncFile and Northwest Registered Agent), so we highly recommend it. Not only will they take care of business formation requirements, but they’ll also include a free registered agent service. Or, if you’d rather start your LLC on your own, you can use registered agent services to cover your agent duties.
During the life of your LLC you may, at some point, need to change your registered agent. Perhaps you want to switch from an individual to a professional service, or maybe your existing registered agent resigns. Either way, you’ll want to make the change as soon as possible because operating without an agent on file can lead to administrative dissolution.
Step 3: File the Formation Documents with the State
This is where the LLC formation process kicks into high gear. Let’s check back in with Fanny.
She’s reserved her unique business name, designated a registered agent, and she’s ready to get her LLC off the ground. It’s time for Fanny to take on the most important LLC document: the Certificate of Formation. This filing creates a record for Fanny’s Florals and Design, LLC with the Maine Secretary of State, giving it the authorization to commence business in the state.
When you’re ready to get your business going, it’s time to file your Certificate of Formation. To get started, head over to the Secretary of State website and download the Certificate of Formation document. When you’ve finished filling it out, mail or hand-deliver it to:
Secretary of State
Division of Corporations, UCC, and Commissions
101 State House Station
Augusta, ME 04333-0101
The Certificate of Formation costs $175, so include a check (payable to the Maine Secretary of State) or a credit card voucher with your form.
Standard processing time is 5-10 business days, but if you’re in a hurry, you can request one of two expedited options: 24-hour service for an extra $50 fee or immediate service for $100.
Once your Certificate of Formation has been accepted, you’re authorized to get your business activities rolling in Maine.
Step 4: Create an Operating Agreement
The operating agreement is the framework that holds up an LLC, the vital underpinning that establishes processes for its procedures, activities, and conduct. Essentially, it serves as your company’s bylaws.
Maine is one of the few states that requires every LLC to adopt an operating agreement, and for good reason. An operating agreement will not only entrench your business procedures, but it also protects your personal assets and legitimizes your LLC in the eyes of banks, courts, government agencies, and more.
Let’s say our friend Fanny sells a percentage of her company to two other owners. Her operating agreement could stipulate how the LLC’s assets would be distributed among them in the case of dissolution. But if she decided to maintain sole ownership, the agreement could be used in court as evidence that the LLC’s assets are separate from her personal ones. These are just two examples, but the operating agreement governs everything from member duties to tax structure.
If you’ve decided to draft an agreement, there are two ways to go about it:
- Write it yourself. Don’t be intimidated by this option. There are plenty of free online templates that serve as helpful guides. You can create an effective document from most of the templates out there, but we recommend getting one through ZenBusiness, which includes a free LLC operating agreement with every package. This will save you a lot of time and money.
- Hire an attorney. If you want to be absolutely sure that you don’t miss any important details, an attorney can write or review the agreement for you, ensuring that it complies with state law, includes all necessary information, and avoids the state’s default laws.
What are default laws?
Each state has its own set of generic, baseline laws for how LLCs should operate. These laws, however, only govern matters not included in your operating agreement. Take dissolution, for example. If your LLC ever dissolves, your operating agreement would determine what happens to its remaining assets and debts. But if you fail to include it in the agreement, the state will make that decision for you.
Because default laws are broad and not tailored to your specific business, they often aren’t in your LLC’s best interest, so it’s best to avoid them by being as comprehensive as possible in your agreement.
Step 5: Get an EIN
There’s simply no way to avoid taxes. In fact, it’s illegal to try, so don’t do it.
Federally, LLCs are classified as “pass-through” entities, businesses that don’t file corporate tax returns, but whose owners include income and losses on their individual returns. Still, there are certain circumstances that require LLCs to pay federal taxes, like classifying as a corporation or partnership, hiring employees, or selling merchandise. So, in Fanny’s case, if she plans on hiring additional florists and selling bouquets, she will need to apply for an EIN.
The Employer Identification Number (EIN) is a nine-digit number that the IRS will use to identify your company’s tax accounts, so if you pay any business taxes, it’s extremely important to have one. Click the “Do I need an EIN?” link on this page to see if you fall into this category. If so, apply for an EIN one of three ways:
Need to get this done quick? File online – it’s by far the most efficient method. You can only complete the process between 7 a.m. and 10 p.m. EST, Monday through Friday, but you’ll receive your number immediately upon finishing the digital form. Keep in mind that you will need to provide a valid individual taxpayer number (like a Social Security Number) as part of the process.
You might prefer the feel and security of a paper form. In this case, download Form SS-4, complete it, and fax it to (855) 641-6935. You will receive your EIN within four business days.
Or, there’s always trusty postal mail. However, this is the slowest option, as processing typically takes around four weeks. If that doesn’t deter you, fill out Form SS-4 and send it to:
Internal Revenue Service Operation
Attn: EIN Operation
Cincinnati, OH 45999
Okay, so you’ve filed the Certificate of Formation, designated a registered agent, adopted an operating agreement, and filed for an EIN. Time to start doing business, right? Sorry, there are a couple of additional steps you may need to take first. But don’t worry, you’re almost there!
Step 6: Taxes, Licensing & Income Reporting
For all intents and purposes, most LLCs will be official after completing all the prior steps. Still, it’s important for business owners like Fanny to keep looking ahead, as there are certain maintenance requirements to keep a Maine LLC running smoothly and in good standing with the state.
Before you start doing business, create a plan for the following potential LLC requirements:
As mentioned earlier, LLCs are almost always classified as “pass-through” entities, which means that they don’t pay income taxes directly to the federal government. That responsibility falls instead on the owners, who must include business income and losses on their personal 1040 tax returns and/or Schedule C. LLCs are flexible with tax structure, so you can choose to have yours taxed like a corporation instead. In this case, it would need to file a separate corporate tax return.
As an LLC operating in Maine, you’re in luck, because your state income taxes are just as simple as your federal ones. Your business’ in-state income and losses are reported on the LLC owners’ personal returns rather than a separate corporate return. Plus, Maine doesn’t require its LLCs to pay any kind of “franchise” or “privilege” tax, so you won’t need to worry about that either.
But you’re not in the clear yet. If your LLC meets certain conditions, it will be responsible for other business-related taxes. For example, if you sell any merchandise, your LLC will owe Sales and/or Use Taxes. Or, if you hire employees, your LLC will be responsible for Withholding and Unemployment Taxes. Register for the Sales, Use, and Withholding Taxes through the Department of Revenue, and for the Unemployment Tax through the Department of Labor.
Plus, depending on your LLC’s location, it may owe a local tax to its city, municipality, or county. Consult your local government’s website to find out.
The Certificate of Formation may have already made your business legitimate, but your LLC might still need to obtain a license before doing business. This all depends, however, on the type of business you run.
You may need to obtain a general business license, although these are managed by local county or municipality governments. Visit the Maine.gov Local Government portal to find information and instructions.
Additionally, certain professions and operations require special state licenses. Our friend Fanny, for example, may need a Nursery Dealers License from the Department of Agriculture before she can open her flower shop’s doors. Check out this list of licensed professions for more information.
Once you’ve taken all the steps to start your LLC, you’ll be off and running, making deals and growing the company. But when things are moving 100 miles per hour, don’t forget that Maine requires all of its businesses to submit one important recurring filing: the Annual Report.
Every year, your LLC will need to file an Annual Report – either online or using a hard copy – before June 1. Mark this date on your calendar, because if you fail to file a report, your LLC will lose its good standing with the state and can be administratively dissolved.
Each report costs $85, so include a payment with your submission. If you choose to file a paper form, follow the filing instructions outlined in the Certificate of Formation section.
And we’ve come to the end. It’s a long process, and not always easy, but the reward is well worth it. If you’ve made it this far, congratulations! Your Maine LLC is ready for takeoff. So go ahead and start with that big sale, promotional campaign, or business deal. Maybe you’ll see Fanny out there in the business world, selling her beautiful floral creations.
Need Help Creating Your LLC?
If you even skimmed this guide to look over the steps, you likely got a sense of how many moving parts there are when starting an LLC. Can you do it all yourself? Absolutely. We have complete confidence in you.
But if you’d rather hand it off to someone else and not have to worry about it again, we recommend using an LLC set up service. This way, you can go about your other business responsibilities with the confidence that everything will be submitted correctly and punctually.
Plus, an LLC formation service can handle maintenance items like Annual Reports, so you can take them off your to-do list. And on top of that, many services also provide a registered agent.