How to start an LLC in Maine
Owning your own business can be a fulfilling, profitable experience – but it’s not without its fair share of challenges! From day one, entrepreneurs will face a lot of hurdles to cross before achieving their business goals. Even the actual act of forming a business entity like an LLC can feel intimidating.
Fortunately, this guide is here to help. If you’re an entrepreneur in Maine, or an existing business looking to expand into Maine, this guide is for you. We will go over the steps required to start an LLC in Maine – and keep the business compliant with ongoing requirements.
In Maine, new LLC formation is handled by the Maine Corporations Division, which is itself a division of the Secretary of State’s office. You can file applications directly with this department, or use the services of an LLC formation company (see below).
Consider utilizing an LLC formation service
To save time, entrepreneurs can benefit from using a professional LLC formation service to help them start a new business. These companies expedite and simplify the process of starting a new company using efficient tools and customized services. If you’d like some personalized help with the process, using a company is well worth the cost.
Some top options in the industry include Northwest Registered Agent, which is known for personalized service, and ZenBusiness, which is very cost-effective (starting at just $49). Either company would be an excellent choice.
If you choose to go this route, you will pay a bit extra (around $50-$150), but you will likely save quite a bit of time – and will have peace of mind knowing that everything was done correctly.
LLC formation services also offer similar services that can benefit your business. This includes Registered Agent services (see step #3 below), mail forwarding, marketing tools, and more.
Name your new company
Selecting a name for your company is the first concrete step you will need to take. As you will quickly learn, one of the biggest hurdles to this step is finding a name that’s not taken. Your business’ name must be unique and distinguishable from any business already registered in the state of Maine. To confirm availability, you can use the Maine Business Entity Name Search.
Finding a unique name is not the only requirement, however. The name must also meet all of Maine’s business naming requirements. This includes several requirements:
The name must contain “limited liability company” or an approved abbreviation (“LLC”, “L.L.C.”, “LC”, “L.C.”
The name cannot suggest an association with a public institution, like a government agency
The name cannot include obscene language or language that promotes unlawful activity
The name cannot contain certain protected words, without additional steps (terms such as “bank”, “credit union”, “doctor”, etc. require additional paperwork.
The full naming requirements can be found here.
Once you have found a name that is available and meets all the requirements, you can move on to step 3. You can also reserve the name in advance, should you wish to do so.
Using a Trade Name in Maine
While thinking about the name for your business, do keep in mind that it’s possible to use a trade name, otherwise known as a DBA or “doing business as” name, in Maine. This is basically a secondary name that can be used to do business under and is essentially attached to your existing business entity. You first need to select a compatible LLC name (see above), and then later can also add on trade names. This is useful for parent companies who own several businesses under one umbrella, and for any company wishing to do business under multiple names.
Appoint a Registered Agent
Every Maine LLC is required to appoint a Registered Agent to represent the company. This agent is responsible for receiving and delivering important documents to the business owners. This can include routine forms such as tax documents and more time-sensitive items like notice of lawsuits.
Anyone that is a resident of Maine can be a Registered Agent – including yourself or an employee. Alternatively, you can use a professional service to serve as your Registered Agent (which offers the benefit of keeping your personal mailing address private). Northwest Registered Agent and ZenBusiness are both good options for Registered Agent services.
Create an operating agreement (optional)
Note: This step is optional, but recommended.
Operating agreements are optional for LLCs but are still strongly recommended. An operating agreement is an internal document (meaning it’s kept on file internally, and not submitted as part of your application). The document lays out important details about your business, including operating procedures, and crucially, ownership structure.
If your business will have multiple owners or stakeholders, an operating agreement is essential as it establishes clear ownership structure guidelines. If agreed upon by all stakeholders, these agreements can help prevent future conflict.
Services like ZenBusiness can help with operating agreements, as they offer detailed templates that you can use to craft one. Alternatively, you can use legal services or a local lawyer to help you create a custom operating agreement.
File LLC Certificate of Formation
The Certificate of Formation is the formal document that establishes your LLC as a business entity. In most other states, this is called the Articles of Organization. This document must be submitted by mail, or in-person, to the office of the Secretary of State. The filing fee is $175, which is payable to the Maine Secretary of State (and is non-refundable).
To file the Certificate of Formation, fill out this form and mail it to:
Secretary of State
Division of Corporations, UCC, and Commissions
101 State House Station
Augusta, ME 04333
The application cannot be done online at this time, unfortunately.
Expedited filing services are available, for an additional fee. 24-hour service is $50 extra, while immediate service is $100 extra.
Processing time varies depending on the current backlog but is typically 1-2 weeks.
Apply for an EIN
Most businesses should obtain an EIN, which stands for an employer identification number. This is a federal tax ID number that enables businesses to hire employees. It’s required for any employees to be hired, so obviously, this is quite important for most small businesses.
The good news is that it is very easy (and free!) to apply for an EIN. Simply fill out this application on the IRS website.
This is handled on the federal level, through the IRS, so it has nothing to do with the state of Maine. However, Maine LLCs should still apply for an EIN, and use the EIN for federal tax ID purposes.
Apply for business licenses & permits
The Certificate of Formation establishes your LLC as a legal business entity. However, it’s not the only paperwork needed in order to legally operate a business in the state of Maine. Various business licenses and/or permits may be required.
Most businesses will also need a city or county-level business license, for each city/county they plan to operate in. Contact your local government for details.
Some businesses will also need statewide permits. This includes professional licenses for certain industries, liquor licenses, food service licenses, gaming licenses, etc.
Requirements vary depending on the business type, location, and industry. Maine Business Answers is a free service through the Maine Department of Economic & Community Development that can help you navigate these requirements.
Keep your business in good standing
On an ongoing basis, there are various tasks that you will need to tackle in order to keep your business running smoothly. This includes various steps to satisfy local, state, and federal requirements – from tax forms to permit renewals and annual reports.
There are dozens of requirements, and the specifics that your business will face will depend on the type of business you run. It’s wise to research your requirements now to start off on the right foot – and ideally, make calendar reminders so that you don’t miss any due dates.
Just a few of the potential requirements that your business may face include:
Maine annual report – required annually for all businesses
Federal tax returns
Federal quarterly taxes
State tax returns
Local tax returns in some areas
Employer taxes/payroll taxes
Business license renewals
Registered Agent (you must always have a registered agent appointed for the life of your business)
This list is not complete, but these are a few of the most important requirements. The Maine business portal has many useful guides and tips for navigating this process, as do the Office of Business Development and the Business Answers service. For local requirements, local city/county governments can also be helpful for finding answers to your questions.
Alternatively, you can use a professional service to help stay on top of your ongoing compliance requirements. Services like Northwest Registered Agent and ZenBusiness can both help with some tasks, and can help to remind you when key filings are due.
Open a business checking account
It is vital to keep personal and business finances as separate as possible. This makes it much easier to keep accurate books for accounting purposes, and also protects your personal assets in the case of a lawsuit related to your business.
Separating finances is simple – it just requires opening a new checking account (and business credit card, if needed) for your company. You can do this at most financial institutions, so you may even be able to use your existing bank. The point is to have a separate business account, which is to be used for all business transactions, and your existing personal account for all personal transactions.