Maine is a state in the New England region of the northeastern part of the United States of America and it is the 41st most populous state amongst the 50 United States of America. Maine is considered to be the safest state in the whole of the United States of America. The crime rate is at the barest minimum when compared to other states in the U.S.
Maine is the least populated state in the United States of America and the population is predominantly whites. The economy of Maine is driven by the Agric Sector, the Manufacturing and Service sector as well. Maine is the number one destination for hiking, sport fishing, sport hunting, snowmobiling, boating, camping, amongst others. If you intend starting your business in Maine, then you can be rest assured to run your business in one of the safest places in the United States of America.
In this article, we will be sharing a step-by-step guide on forming a limited liability company in Maine. However, before we get started, let us take a quick look at Maine and the benefits of creating an L.L.C. in the city.
Table of Content
- The Cost
- STEP 1: Choose A Name for Your Limited Liability Company (LLC)
- Step 2: Appoint A Registered Agent in Maine
- Step 3: Prepare and File a Certificate of Formation
- Step 4: Create an Operating Agreement
- Step 5: Acquire an Employer Identification Number
- Step 6: Maine Tax and Regulatory Requirements
- Step 7: Securing Business Licenses and/or Permits
- Step 8: Open Your LLC Bank Account
- Step 9: Apply and Obtain Your Business Phone Number
- Step 10: File Your LLC Annual Report
- Step 11: Hiring of Employees
If you want to form an LLC in Maine, you are required to file your Certificate of Formation with the Maine Secretary of State and wait for your LLC to be approved. You can only file your LLC by mail (there is no online filing yet). The state filing fee is $175 and the approval time is 5-10 business days (unless you pay $50 or $100 extra for expedited processing).
How to Form an LLC in Maine
Here are some steps you would have to follow if you want to form an LLC in Maine;
STEP 1: Choose A Name for Your Limited Liability Company (LLC)
It is up to you to come up with a name for your L.L.C. In Maine, your name ought to be unique and come with the abbreviation L.L.C. or include the words “Limited Liability Company.
Your LLC’s name must be distinguishable from the names of other business entities already on file with the Maine Secretary of State. Names may be checked for availability by searching the Maine Secretary of State’s business name database. You may reserve a name for up to 120 days by filing an Application for Reservation of Name (MLLC-1) with the Secretary of State. The reservation must be filed by mail. The filing fee is $20.
To give you a better understanding, here are some of the naming guidelines for Maine:
- Your company name must contain the phrase “Limited Liability Company” or any of its abbreviations (L.L.C. or L.L.C.)
- Your company should not include words or phrases that might make the public confuse your company with a government agency such as F.B.I., State Department, NASA, Treasury. Examples of such restricted words include Bank, University, and Attorney.
- If you want to make use of restricted words like Attorney, Bank and the rest, you will need more paperwork as well as a licensed individual such as a lawyer or doctor to be members of your L
- You can check if the name you intend to use is available by carrying a search business
So also, you must make sure that the name you want to use is not already taken. You can be check if the name is unique by searing the name on the State of Maine Website. Also, make sure your business can use its name as a web domain. Even though creating a business website is not on your plan, it is best you purchase the URL to stop others from using it.
After you have registered a domain name, consider creating a professional email account. A professional email that makes use of your domain name is vital to establishing trust between your business and its customers. In this modern era, where scam is on a high, companies need to make use of a professional email address to provide a sense of professionalism and credibility.
Step 2: Appoint A Registered Agent in Maine
Next, you are required to choose a registered agent for your L.L.C. in Maine. A Resident Agent is the person or company who receives your LLC’s documents, notices and legal mail (called Service of Process). Because of this, the Resident Agent must have an actual street address in Maine (PO boxes are not allowed by the state). Picture your registered agent as your company representative to the state.
It is important to note that not everyone can be a registered agent. For a person to be eligible to become a registered agent, the person or corporation must be a resident of Maine. That is to say, the individual or corporation must have a physical address within the state.
If any member knows the ropes of being a registered agent, you may elect him or her rather than hiring one. This will help you save some dollars, especially if you are running a small business. However, hiring a seasoned registered agent offers tons of benefits like privacy and peace of mind. Please note that you, your friend or family members or a commercial resident agent are qualified to be your LLC’s Resident Agent.
Step 3: Prepare and File a Certificate of Formation
A Maine LLC is created by filing a Certificate of Formation (MLLC-6) with the Maine Secretary of State. The certificate must include:
- the LLC’s name
- the date the Certificate should become effective (upon filing or a later date)
- whether the LLC is a low-profit LLC (formed to accomplish charitable or educational purposes)
- whether the LLC is a professional LLC (this is so if members perform professional services; including accountants, attorneys, chiropractors, dentists, registered nurses, and veterinarians)
- the name and address of the LLC’s registered agent, and
- signature of authorized person.
Please note that the articles must be filed by mail. The filing fee is $175.
Step 4: Create an Operating Agreement
An LLC operating agreement is not required in Maine, but is highly advisable. This is an internal document that establishes how your LLC will be run. It sets out the rights and responsibilities of the members and managers, including how the LLC will be managed. It can also help preserve your limited liability by showing that your LLC is truly a separate business entity. In the absence of an operating agreement, state LLC law will govern how your LLC operates.
An Operating Agreement lists the rights and obligations of the members of the LLC. These include rules on how the LLC should be run, how taxes are to be paid, and how profits / losses are to be shared among the members.
The Operating Agreement also contains the list of members of your LLC and how much their stake is in the business. Even if you have a Single – Member LLC (you’re the only owner), it’s still best practice to have an Operating Agreement.
The bottom line is that, in case your LLC is sued, having an Operating Agreement shows that your LLC is operating properly. This helps maintain your personal liability protection.
Step 5: Acquire an Employer Identification Number
An EIN is sometimes referred to as a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number (FTIN) is a 9 – digit number similar to a social security number. The Employer identification number will be used to identify your business.
It is like a social security number for your company. An Employer Identification number is essential because you will need it to open a business account for your company, to hire employees as well as tax purposes. You can obtain your E.I.N. from the I.R.S. after creating your company. You can do it via mail or online. Note: It won’t cost you a dime to get an E.I.N. from the I.R.S.
You can obtain an EIN from the IRS either
- Via mail (approval takes 4 weeks)
- Via fax (approval takes 4 business days)
- Via online application (approval is instant at the end of the application)
Step 6: Maine Tax and Regulatory Requirements
In the state of Maine, annually, all Maine LLCs are required to file an Annual Report and some Maine LLCs are required to file an Annual Report and Personal Property Tax Return.
An Annual Report keeps your LLC’s contact information up to date with the Maine Secretary of State.
Additional tax and regulatory requirements may apply to your LLC. These may include:
EIN: If your LLC has more than one member, it must obtain its own IRS Employer Identification Number (EIN), even if it has no employees. If you form a one-member LLC, you must obtain an EIN for it only if it will have employees or you elect to have it taxed as a corporation instead of a sole proprietorship (disregarded entity). You may obtain an EIN by completing an online application on the IRS website. There is no filing fee.
Business Licenses: Depending on its type of business and where it is located, your LLC may need to obtain other local and state business licenses. For local licenses, check with the clerk for the city or town where the LLC’s primary place of business is located (or county if it is in an unincorporated area). For state license information, check Maine’s Department of Economic & Community Development online Business Answers service.
Maine Revenue Services: In some cases, for example if you have employees or will be selling goods and collecting sales tax, you’ll need to register with Maine Revenue Services (MRS). You can register online on the MRS website.
Step 7: Securing Business Licenses and/or Permits
The next step you are expected to take is to secure your business license and permits as the case may be. The type of business licenses and/or permits your LLC will need to legally operate in Maine will depend on its location and the industry it is involved in.
Please note that in order to operate your LLC you must comply with federal, state, and local government regulations. For example, restaurants likely need health permits, building permits, signage permits, etc.
The details of business licenses and permits vary from state to state. Make sure you read carefully. Don’t be surprised if there are short classes required as well. Fees for business licenses and permits will vary depending on what sort of license you are seeking to obtain. To find out more, contact your local agencies in the city, town or county where your LLC is located.
Step 8: Open Your LLC Bank Account
In order to keep your business finances apart from your personal finances, it is advisable that you open a separate bank account for your Maine LLC. It will indeed help you maintain your personal liability protection. A separate bank account helps maintain your liability protection and it also makes business accounting and taxes a lot easier.
The items needed to open an account in Maine are your approved Articles of Organization, EIN Confirmation Letter from the IRS, and your driver’s license or passport. We also recommend calling the bank ahead of time to find out if additional documents are required.
Tips: Look for free business checking: Call a few banks in Maine and take down notes for comparison. Some banks charge monthly maintenance fees for your LLC’s checking accounts, others don’t.
Debit card: A debit card for your LLC will be issued when opening the account.
Credit card: If you want to start building business credit for your Maine LLC (or get travel and cashback rewards), you can get a credit card or two for your LLC. We recommend using creditcards.com to find a business credit card.
Step 9: Apply and Obtain Your Business Phone Number
Instead of using your home telephone number or your cell phone, you can purchase an affordable “virtual business number” specifically for your Maine LLC. You can set this virtual business phone up to forward to your cell phone, go through voice prompts, or configure it any way you’d like.
You can check out Phone.com as they have the cheapest plans and their customer service is excellent.
They offer local phone numbers as well as 1-800 toll-free numbers. You can easily setup call forwarding, pre-recorded prompts, and get voicemail messages forwarded to your email.
Getting a separate business phone number for your Maine LLC is also a good idea in order to keep your actual number private from those pesky “public record” websites.
Step 10: File Your LLC Annual Report
All LLCs doing business in Maine must file an Annual Report with the Maine Secretary of State every year by June 1. You can obtain a pre-printed annual report form from the Secretary of State’s website; you’ll need your LLC’s state charter number to access the online form. The report may be filed online, or by mail. The filing fee is $85 for domestic LLCs, $150 for foreign LLCs.
It is important to point out that in Maine, an LLC may face fines and even automatic dissolution when they miss one or more state filings. When this happens, LLC owners risk loss of limited liability protection. A quality registered agent service can help prevent this outcome by notifying you of upcoming filing deadlines and by submitting reports on your behalf.
Step 11: Hiring of Employees
Of course, registering an LLC means that you will need employees and in order to get it right as regard hiring employees, then you should ensure that you stay on the side of the law and here are some steps you should follow:
- Verify that new employees are able to work in the US
- Report employees as “new hires” to the State
- Provide workers’ compensation insurance for employees
- Withhold employee taxes
- Print compliance posters and place them in visible areas of your workspace
Lastly, ensure that you find out more information from the Maine Department of Labor, Licensing, and Regulation website.
Please, note that the information in this article is provided only for general purposes and it is no way a legal advice. No lawyer – client relationship is established or should any such relationship be assumed. For legal advice, please consult a professional lawyer.