How to Start your LLC in Maine

This document takes you through the process of establishing a Maine LLC step-by-step, including the process of establishing a compliant business name and registered agent up to the process of filing your Certificate of Formation, creating an operating agreement, and remaining compliant over time. By the final point, you will have a very clear picture of costs, timelines and legal requirements to be complied with so that you can comfortably concentrate on expanding your Maine-based business.

1. Name Your Maine LLC

One of the first decisions that you will make is to select the name of your LLC. Your name as a business is your brand name and the first impression to your customers, vendors and partners. Your name should be good, easy to recall and one that describes what your business is all about.

It is quite useful to explain your general business idea before deciding on a name. Consider your target market, services or goods that you will sell, and the perception that you will want your business to create. Several business owners also seek the input of trusted friends, colleagues or mentors because a fresh point of view can reveal the strengths or the problems that may be experienced with a name that a business owner has not considered.

After making a list of the possible names, it is always prudent to do some basic search on the web. This will enable you to check if other businesses of a similar nature are already in existence, domain names are free and the social media addresses may confuse the brand in the future. Brainstorming can also be generated through online business name generators but it is recommended to be used as a brainstormer and not as a decision-maker.

Name Availability Maine Checks

Once you have whittled down on your options, you will be required to check on the name availability at the Maine Secretary of State. This makes sure that your name of choice is not being used or is too close to another business already registered in state.

Check Federal Trademarks

In addition to state availability, you should also ensure that the US Patent and Trademark Office (USPTO) does not have your name as a federally registered trademark. This measure would cushion you against lawsuits and brand wars when you decide to go beyond Maine to grow your business.

Reserve Your Maine LLC Name

Whereas you are not prepared to register your LLC at the moment, Maine gives you the chance to reserve your company name. To accomplish this, you have to download name reservation form on the website of Secretary of State. At present Maine does not permit online name reservation and you have to send the form either by mail or in person.

Secretary of State
Division of Corporations, UCC and Commissions.
101 State House Station
Augusta, ME 04333-0101

Doing Business in Maine as a Foreigner

You can still choose to do business under another name even after registering your LLC as a way of branding or expanding. It is at this point that an assumed name in Maine in the form of a Doing Business As (DBA) is involved.

DBAs are favored in many businesses with the introduction of new product lines of business or when running the business under different brands under one LLC. As an illustration, assume that your LLC is called JJ Waffles, you can use JJ Muffins as an assumed name without the creation of a separate legal entity. This flexibility enables you to sell various products without having to separate all of this under a single LLC.

Banking convenience is another benefit of registering an assumed name. Using the DBA, you are able to receive customer payments and open accounts with a bank under such trade name that makes it easier and more professional to conduct business.

In Maine, the registration process of assumed name is completed by downloading a right form via the Secretary of State site and filling it through mail. There is no possibility of online filing. The charge is $125 and the forms are to be submitted to:

Department of the Secretary of State
Corporations, UCC and Commissions.
101 State House Station
Augusta, ME 04333-0101

2. Select a Registered Agent

All Maine LLCs are obliged by law to designate a registered agent. This individual or business is the official address in which legal papers, tax bills, and governmental mail are received on behalf of your LLC.

The registered agent is very important in ensuring that your business does not fail to meet deadlines or other legal notice requirements. In Maine, an individual, a member of LLC, or a professional service may be used as the registered agent, as long as he or she satisfies the requirements of the state.

Requirements of Registered Agents

The registered agent in Maine should:

• Be at least 18 years old
• Have a physical street address in the state (No P.O. boxes)
• Authenticity to be available within ordinary business hours
• In case the agent is a business entity, the entity should be licensed to conduct business in Maine

Other business owners have a preference of becoming their own registered agent, but it involves the regular presence at the registered address during the business hours. Most entrepreneurs choose to use a registered agent service to offer an added privacy, flexibility, and compliance assistance to them because of traveling a lot or working at home.

3. Decision Your Management Structure

The Maine LLCs may be member-managed or manager-managed, and the correct structure should be determined by the degree to which the owners would like to be involved in the day-to-day activities.

Member-Managed LLC

In member-managed LLC, all members play an active role in the management of the business. This type of business structure is effective in a small business where the owners desire to have direct control over the operations of the business.

Manager-Managed LLC

By contrast, a manager-managed LLC assigns it one or more managers who are or are not necessarily also members- to manage the day-to-day operations. This alternative is mostly adopted in cases where a few members feel that they would like to be passive investors.

Even though a member may also act as a manager in a manager-managed LLC, Maine demands that the member act as a manager together with at least one non-member manager. The default state of LLC in the State of Maine is that the LLC is member-managed unless it is mentioned in the Certificate of Formation.

At an early stage, it is better to select the appropriate management structure to prevent any internal conflicts and make sure that the expectations are clear.

4. Filing a Certificate of Formation

In order to legally create your LLC, you need to submit a Certificate of Formation in the Maine Secretary of State. As opposed to most states, Maine does not permit the process of filing this document online, and instead, you need to either file it via mail or in-person filing.

Information Required

The Certificate of Formation only needs some simple yet necessary information such as the:

• LLC's legal name
• Principal office address
• Registered agent details
• Registered office address

The filled forms must be sent along with the filing fee to:

Secretary of State
Division of Corporations, UCC and Commissions.
101 State House Station
Augusta, ME 04333-0101

5. Write an Operating Agreement

An Operating Agreement defines the manner in which you LLC will be owned and run. Maine is unlike most states, and requires LLCs to have an operating agreement, which may be written, oral, or implied through conduct. Although this is flexible, it is highly advisable to have a written contract to prevent disagreements and misunderstandings.

A good operating agreement will normally include ownership share, voting rights, apportionment of profits, management duties, process of inclusion or elimination of a member, and resolution of disputes.

Although templates are offered online, it may be beneficial to seek the advice or the lawyer, who can review and write your agreement to offer more legal protection and certainty.

6. Get Your Employer Identification Number (EIN)

The IRS issues an EIN and identifies your business with the help of it. It is not optional when the number of members in your LLC is more than one, when you intend to employ workers, or when you decide to be treated as a corporation.

Right on the IRS Web site, you can apply to an EIN at no charge. The application should contain name and taxpayer identification number of the person who is referred to as the responsible party; he will manage the finances and operations of the company.

7. Acquire Business Permits and Business Licenses

In Maine, licensing decisions differ based on the industry and location. Although Maine does not have a general statewide business license, a great deal of towns and cities have local licenses or permits to conduct business.

The Business Answers service of Maine can serve as a useful tool, explaining licensing requirements to follow in specific business operations. The industry-specific licenses, zoning permit, health permit and registration of sales tax might be required depending on your operations.

Inability to secure necessary licenses may attract fines, penalties or closing down of the business and therefore research is necessary.

8. Determine Your Tax Status

Maine LLCs are by default pass-through taxed, or they are taxed as pass-through entities, i.e., the profit and loss are directly transferred to the personal tax returns of the owners.

Default Tax Treatment

The taxation of single-member LLCs is similar to that of sole proprietorships, and multi-member LLCs are subjected to taxation as partnerships, except that an election to be taxed as a corporation may be made. S-Corporation or C-Corporation may also be elected by LLLCs when it is more suited to its financial strategy.

Besides the federal wages, the LLCs may pay the Maine state income tax, sales tax, and the employer payroll taxes on the business operations.

Annual Reporting in Maine

The annual report should be filed at the Secretary of State before June 1 st every year by Maine LLCs. The filing fee is 85 dollars and failure to file it at the right time may result in penalties or administrative dissolution.

Maine LLC FAQs