How to File an LLC in Maine

Many share a dream of starting a small business, but the path from concept to your first sale can be tricky. Selecting the proper business structure is one of the first steps on this winding journey. This could be a sole proprietorship, LLC, S corp, or C Corp. One of the most popular choices among first-time business owners is the Limited Liability Company (LLC). 

However, the type of business is just one part of the puzzle. Next, you’ll need to select where to file your new business. With a supportive entrepreneurial environment, many new business owners consider Maine. In fact, Maine is home to over 144,000 small businesses.[1]

If you are considering forming an LLC in Maine, you’ve come to the right place. In this step-by-step Maine LLC guide, we will go over the process of filing an LLC and all the things you’ll need to consider to help ensure your business’s long-term success and growth.

Key Takeaways:

• Maine is home to over 144,000 small businesses.

• An LLC is a business structure offering personal asset protection for its owners while providing potentially substantial tax savings. 

• Maine provides various resources and support for small business owners, including access to funding, mentorship, and training programs.

What Is an LLC Formation?

An LLC is a business structure offering personal asset protection for its owners while providing potentially substantial tax savings. This business entity can be an excellent option for entrepreneurs looking to start a new business and protect their personal assets from any potential liabilities.

Regarding taxes, LLCs in Maine must pay sales tax and annual state fees, but they are not subject to corporate income taxes. Additionally, members of an LLC have the flexibility to choose whether they want to be taxed as a partnership, S Corp, or C Corp, which can result in significant tax savings and pass-through taxation options.

Step-by-Step Guide to Starting Your Maine LLC

Starting an LLC in Maine is an opportunity to set sail on an exciting entrepreneurship journey. The state of Maine is a great place to do it, with a thriving small business environment. Maine also provides various resources and support for small business owners, including access to funding, mentorship, and training programs.[2]

Once you’ve established your LLC, the journey doesn’t end there. Compliance and reporting requirements, such as submitting annual reports and keeping accurate financial records, are actions you will need to continue to do throughout the lifetime of your business. Otherwise, you open yourself and your business up for legal and tax troubles. 

While starting an LLC is similar across states, the specific requirements and fees can vary. Therefore, it’s essential to seek guidance specific to Maine to ensure a smooth process, and with our help, you can confidently navigate the waters ahead.

Step 1: Choose a Business Name for Your Maine LLC

When setting up shop in Maine by forming an LLC, one of the initial tasks is selecting a one-of-a-kind and fitting business name. It’s crucial to opt for a name that another company doesn’t already use and complies with the naming regulations established by the Maine Secretary of State.

Conducting a Name Search 

To see if your desired name is available, starting with a name search is a good idea. The Maine Secretary of State provides a business name search tool on their website, which allows you to search for existing LLCs, corporations, assumed names, and DBAs. You can also use the Free Business Name Search at Swyft Filings. 

In the Pine Tree State, you can reserve an LLC name before officially forming the LLC. You can submit an Application for Reservation of Name to the Maine Secretary of State’s office. The application can be submitted online, by mail, or in person. The reservation fee is $20, which reserves the name for 120 days. Expedited filing is also available for an additional fee of $50 for next business day service and $100 for the same business day option.[3]

Reserving your name is not required, but it may be a smart choice. It helps ensure that your desired LLC name is available before moving forward with the official formation process, allowing you additional time to focus on getting all your paperwork right.

When choosing your Maine LLC name, here are some essential requirements to keep in mind:

• Ensure that the name is not already in use by another business.

• Make sure the name is distinguishable from existing business names.

• Include the words “Limited Liability Company” or the abbreviation “LLC” in the name.

• Reserve your desired LLC name by submitting an Application for Reservation of Name to the Maine Secretary of State.

• Conduct a name search to ensure your desired name is available.

• Check the availability of the corresponding website domain.

• Trademark your LLC name through the United States Patent and Trademark Office (USPTO).

• Get additional documentation for certain words such as “Bank,” “University,” or “Insurance.”

Securing a Domain for Your Maine LLC Name 

Before finalizing your LLC name with Maine, it is also advisable to check the availability of the corresponding website domain. This will help your small business build an online presence and make it easier for customers to find you. 

Trademarking Your Maine LLC Name 

To protect your brand and prevent other businesses from using your name, it is important to trademark your LLC name. You can complete this process through the United States Patent and Trademark Office (USPTO) or hire a trademark attorney to advise you.[4]

Step 2: Fill Out the Maine Certificate of Formation

After you have the perfect name picked out for your new business, the next step in the LLC formation process is filing the Maine Certificate of Formation, also known as the Articles of Organization.[5] This document officially incorporates your LLC, making it a separate legal entity under state law.

But before you file, ensure you have all the necessary information ready. Here’s a checklist of line items you’ll need to include in your certificate of formation:

• The name of your LLC (make sure it complies with Maine’s naming regulations)

• The name and address of your registered agent

• The business address

• The effective date of formation

• The purpose of the LLC

• The duration of the LLC

• The name and address of the incorporator

• Additional provisions (optional)

Once you have gathered all this information, you can head to the Maine Secretary of State website to file your certificate of formation. The filing fee is currently $175, and the processing time is around 20-25 business days.[6]

Don’t forget that Maine LLCs must also file an annual report by April 1st each year. This report updates the contact information for the LLC, including the registered agent and the LLC’s principal office. The filing fee for the annual report is $40, and it can also be filed online through the Secretary of State’s website.[7]

Step 3: Hire a Maine Registered Agent

To stay compliant with state law and regulations, having a trusted registered agent for your Maine LLC is vital. A registered agent in Maine is responsible for receiving legal and business-related documents on behalf of your LLC, such as service of process in case of lawsuits and other legal documents required by the state.

When choosing a registered agent, they must have an actual and physical street address in Maine. P.O. boxes are not acceptable for a Maine registered agent. The registered agent’s address will also serve as the registered office for your LLC.

All registered agents should be available during regular business hours, partly because they can only accept service of process papers during normal business operating hours. If your registered agent is not available during these times, it can result in your LLC being non-compliant with state law.

You can choose to be your own registered agent, but it usually isn’t recommended. Hiring a registered agent service may be more beneficial if you are not always available at your registered office during business hours. They will ensure that all legal documents are received and handled promptly to ensure your LLC remains in good standing with the state.

At Swyft Filings, we offer a Registered Agent service that small business professionals trust. Our service includes dedicated digital tools, such as an online dashboard, which provides secure and reliable access to your official documents. Our team is available 24/7 to assist you with any questions or concerns. 

Step 4: Create an LLC Operating Agreement

Creating an LLC operating agreement in Maine is essential in establishing your limited liability company. This legal document outlines the rules and guidelines for how your LLC will operate, including information on ownership, management, and distribution of profits and losses.

The state of Maine does not require an operating agreement, but it’s still a highly recommended part of the process. Without one, your LLC will be subject to the state’s default rules, which may not align with your specific business needs. Having an operating agreement in place can help prevent disputes and misunderstandings among members and protect in case of legal disputes.

When creating an operating agreement, it’s essential to include the following key elements:

• Names and addresses of all members

• Percentage of ownership for each member

• Management structure, including how members make decisions and who has the authority to act on behalf of the LLC

• Rules for voting, admitting new members, and dissolving the LLC

• Provisions for how profits and losses get distributed among members

• Information on how to resolve disputes

Remember that an operating agreement is a living document that may require updates as your business evolves. So, you’ll need to review and update your operating agreement regularly to ensure that it continues to reflect the current state of your LLC.

Consider consulting with an attorney when drafting your operating agreement to ensure that it complies with state laws and covers all necessary aspects of your business operations. 

If you’re looking for an easy and affordable way to create an operating agreement for your Maine LLC, our team of experts can help you draft a comprehensive operating agreement tailored to your specific business needs and compliant with state laws. 

Step 5: File for an Employer Identification Number

EIN stands for Employer Identification Number, which is like your LLC’s social security number. It’s used for tax purposes and is required if you plan on hiring employees or opening a business bank account.

Getting an EIN is simple and, best of all, free! You’ll need to visit the IRS’s website, provide some basic information about your LLC, and you’ll have your EIN in no time.[8]

Let Us Handle Your LLC Paperwork

You have a great idea and the drive to make it happen. Now all you need is the right guide by your side. With Swyft Filings, you’ll have the power to easily and efficiently form your LLC, and our team of experts will assist you every step of the way. 

Our services give you the tools and resources to pave your way to success. You can focus on running your business while we handle the legalities. Don’t let the process of LLC formation hold you back from reaching your full potential. Try us out today and see the difference for yourself!

FAQs

How much does it cost to set up an LLC in Maine?

Starting an LLC in Maine is an exciting adventure! And just like any adventure, there are a few costs to consider before setting off on your journey. Here’s a breakdown of the costs you can expect when setting up your LLC in Maine:

• Filing fee for the Articles of Organization: $175

• Registered Agent fee: You can choose to be your own registered agent or hire a professional service like Swyft Filings for an annual fee of around $99.

• Business License and Permit fees: These vary depending on your specific business and location.

• Name reservation fee: $20

• Operating Agreement: You can create your own or use a service like Swyft Filings to make one for you, starting at $35.

But don’t let these costs discourage you! Starting an LLC in Maine is a smart investment in your future business and can provide personal asset protection, tax benefits, and much more.

How is an LLC taxed in Maine?

LLCs in Maine are considered “pass-through” entities, meaning that the business does not pay taxes on its income at the state level. Instead, the income gets passed through to the individual members, who report it on their personal tax returns. The state does, however, impose a “minimum tax” of $150 annually for all LLCs, regardless of income. Additionally, depending on your business activities, you may need to obtain a state sales tax permit and collect and pay sales taxes to the Maine Revenue Services.

What are the benefits of a Maine LLC?

An LLC in Maine offers business owners several benefits, such as personal asset protection, flexible management structure, and pass-through taxation. 

By forming an LLC in Maine, you’re protecting your personal assets from any liabilities or debts of the business. If someone sues your company, your personal assets, such as your home, car, and savings, will not be at risk. 

LLCs in Maine also have a flexible management structure, allowing multiple members and the ability to assign different roles and responsibilities within the company. 

LLCs in Maine can also be great for tax purposes. They are considered pass-through entities, meaning the business does not pay taxes on its income. Instead, the income gets passed through to the individual members, and they pay taxes on their share of the income on their personal tax returns. This can result in significant tax savings for business owners.

How do you dissolve an LLC in Maine?

When dissolving an LLC in the state of Maine, you must complete and submit certain forms and filing fees to dissolve properly. 

The first step is to file the Articles of Dissolution with the Maine Secretary of State. All members of the LLC must sign this form and include information such as the LLC’s name and date of dissolution. The filing fee for this form is $35, with expedited options available.[9]

In addition to the Articles of Dissolution, it is also necessary to file any final state and federal tax returns for the LLC and to notify any creditors or claimants of the dissolution. It’s also essential to distribute any remaining assets of the LLC to its members and to take any other necessary actions to wrap up the LLC’s business affairs.

It is highly recommended to consult with a business attorney to ensure you take all proper steps and complete the dissolution process correctly to avoid potential legal issues and comply with state and federal regulations.

Bibliography:

1. Small Business Administration. Small Business Economic Profile Maine. https://www.sba.gov/sites/default/files/advocacy/Maine_1.pdf?aid=138d9e84-3478-43d8-8222-402529d58442. Accessed May 8, 2023.

2. Maine Department of Economic and Community Development. Start or Grow a Business. https://www.maine.gov/decd/business-development/start-grow. Accessed January 30th, 2023.

3. Maine Secretary of State, Corporations Division. Maine Limited Liability Company Form 1. https://www.maine.gov/sos/cec/forms/mllc/mllc1.pdf. Accessed January 20th, 2023.

4. United States Patent and Trademark Office. https://www.uspto.gov/. Accessed January 30th, 2023.

5. Maine Secretary of State, Corporations Division. Maine Limited Liability Company Form 6. https://www.maine.gov/sos/cec/forms/mllc/mllc6.pdf. Accessed January 30th, 2023.

6. Maine Secretary of State, Corporations Division. Limited Liability Companies. https://www.maine.gov/sos/cec/corp/llc.html. Accessed January 30th, 2023.

7. Maine Secretary of State, Corporations Division. Annual Reports and Fees. https://www.maine.gov/sos/cec/corp/annual.html. Accessed January 30th, 2023.

8. Internal Revenue Service. Apply for an Employer Identification Number (EIN) Online. https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online. Accessed January 30th, 2023.

9. Maine Secretary of State, Corporations Division. Maine Business Corporation Act Form 11. https://www.maine.gov/sos/cec/forms/mbca/mbca11.pdf. Accessed January 30th, 2023.