How to Start an LLC in Maine

The idea of starting up a limited liability company (LLC) in Maine can feel daunting at first. Fortunately, it’s easier than you might think if you have the right information on hand.

In this article, we’ll teach you:

• The steps you must take to start an LLC in Maine
• Essential tasks you should take care of after you start your LLC
• The amount of time and money it takes to form a Maine LLC

Read on to learn more about forming a Maine LLC for your business!

Last updated: Sep 2024

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Step 1: Name your Maine LLC

To start a Maine limited liability company, you will need to decide on a business name. However, Maine laws limit what options are available. Certain words are not allowed, while other words are mandated.

The following sections explain these rules in more detail.

Words You Have to Use

Maine Revised Statutes Section 31-1508 requires all LLCs names to contain one of the following designations:

• “limited liability company”
• “limited company”
• “L.L.C”
• “L.C.”
• “LLC”
• “LC”

The statute also permits you to shorten “limited” to “ltd.” and “company” to “co.”

Words You Can’t Use

Section 31-1508 also gives the Maine Secretary of State the discretion to refuse a business name that does any of the following:

• Uses obscene language.
• Promotes abusive or illegal activity.
• Falsely suggests an association with public institutions.

Additionally, if your LLC is not licensed to offer a certain service, its name can’t suggest that your business provides those services.

Your Maine LLC name must also be different or “distinguishable” from other registered business names. The goal of this rule is to minimize consumer confusion.

Research the LLC Name You Want

After you’ve chosen the name you want to use, you can check the Maine Secretary of State’s Corporate Name Search to see if it is available.

If the name you want is used by another company, there are two ways you can still use the name. First, you can use the name if the other business entity consents and agrees to change its name to something else. You can also use the name if you have a court order that says you have the right to do so.

If the name you want is available, Maine Revised Statutes Section 31-1509 lets you reserve it for 120 days. To do this, you must mail an Application for Reservation of Name and a $20 filing fee to the Secretary of State at the following address:

If you want to submit the form using UPS or FedEx, you should use the address below instead:

Maine DBA: Using an Assumed Name

Many LLC owners choose to use a “doing business as” or “DBA” name rather than their company’s real name. A DBA is an alternate name that lets you do business using a different moniker.

Business owners often use DBAs that are less formal than the official name of their LLC. You can also start using a different DBA as your business grows and you start to branch out.

Maine refers to DBAs as “assumed names.” If you want to use a DBA for your LLC, Maine Revised Statutes Section 31-1510 says you must register it with the Maine Secretary of State. 

You can do this by mailing or shipping a Statement of Intention to Transact Business under an Assumed or Fictitious Name form and a $125 filing fee.

Step 2: Appoint a Registered Agent for your LLC

A registered agent is a person or business that receives legal documents on behalf of an LLC.

Under Maine Revised Statutes Section 31-1661, every LLC must maintain a registered agent in the state. Your registered agent must be available to receive service of process throughout standard business hours.

In Maine, you have the option to use either a commercial or a non-commercial registered agent. The main difference between the two is that commercial registered agents must register with the Secretary for State and be “in the business” of serving as a registered agent.

New business owners often think the best choice is to be their own LLC’s registered agent. There are a few advantages to this option:

• It’s cheap: You’re not paying someone else to do it for you.
• It’s easy: The only address and contact information you have to keep current is your own.
• It’s reliable: You will receive all important documents personally.

However, being your own registered agent is usually not worth the trouble it causes.

Some of the problems you might encounter include:

• No privacy: Your name and address will be published on the Secretary of State’s website. This means that anyone with an internet connection can find your personal information.
• Junk mail/spam: You will get a ton of junk mail in addition to a small amount of real mail and any service of process.
• No breaks: You also must be available at all times during regular business hours to receive documents. This means no vacations, sick days, or leaving the office for lunch.
• Business interruptions: Client meetings can be interrupted by people serving process. That could be embarrassing or hurt your reputation.
• It’s your fault if you miss something: You always have to make sure your address is correct and up to date. If you make a mistake or miss something, you are held responsible.

We recommend you use a professional registered agent service to avoid issues like this. They’ll notify you if any documents come in for your business, and it only costs about $100 per year.

If you’re thinking of expanding your Maine business to other states and need to register as a foreign LLC, we suggest that you go with a nationwide registered agent service. That way, you can only have to deal with one provider, even if you need registered agents in multiple states.

Step 3: File Your Maine LLC Certificate of Formation

A certificate of formation is a legal document that lists basic details about your LLC. You’ll need to file a certificate of formation with the Secretary of State to officially start your Maine LLC.

What to include in my Maine Certificate of Formation?

Maine Revised Statutes Section 31-1531 says that your certificate of formation must list:

• The LLC’s name.
• The name and address of the registered agent.
• Any other matters you want to include.

If you have chosen a commercial registered agent, you only need to include their name. But if you’re using a non-commercial agent, you’ll also have to list their address.

You must submit your completed certificate of formation by mail or UPS/FedEx.

Maine LLC Filing Fee

According to the Maine Secretary of State’s LLC Forms and Fees, the filing fee for an LLC certificate of formation is $175.

Read More: How Much Does It Cost to Form an LLC in Maine

Maine LLC Processing Time

Standard processing times range from 10 to 15 business days. However, you can request 24-hour expedited filing for an additional $50 fee or same-day expedited filing for a $100 fee.

Step 4: Draft your Maine LLC Operating Agreement

An operating agreement is a contract that governs the day-to-day functions of an LLC. It also sets out the rights and duties of the members.

Maine is one of the few states that requires you to have an operating agreement. In addition to a certificate of formation, Maine Revised Statutes Section 31-1531 also requires the members of an LLC to enter into an operating agreement. However, you don’t have to file your operating agreement with the Maine Secretary of State.

Here are some of the things that operating agreements can do:

• They determine the rights and duties of LLC members. If one LLC member is responsible for running the business or managing the books, the operating agreement should say so.
• They say what the manager has the right to do. Managers also have special duties to the company and the members. The LLC operating agreement should state these.
• They outline what the LLC is legally able to do. The operating agreement should also set down how the company is allowed to conduct its business from day to day.
• They say how new members can join the company. They also have rules about how exiting members can leave.
• They set down how and when profits are paid to members. They can also create different types of membership and payment schemes.
• They say whether members or managers are in charge. They also say how to hire and fire managers.
• They say how and under what circumstances the LLC should end. You might not want to dissolve your business entity now, but you might in the future. It’s best to think about it and plan before it becomes an issue.
• They say how to change the rules. You may need to amend your operating agreement in the future. The operating agreement should set down the rules for making changes.

All LLC members should be involved in creating your Maine LLC operating agreement. This will help make sure everything is clear from the very beginning and reduce conflict among the members.

Step 5: Get an EIN (Employer Identification Number) for Your Maine LLC

An EIN is a 9-digit tax ID number that the IRS issues to businesses. Your EIN can be used to identify your business in the same way that an SSN identifies a person.

Here are the most common times when you need an EIN:

• Does your LLC have more than one member?
• Does your LLC have any employees?
• Is your LLC taxed as a C corporation or S corporation?

If the answer to any of these questions is yes, your LLC must get an EIN.

A single-member LLC can file taxes using its owner’s SSN. However, it may be a good idea to have an EIN anyway in case you need to open up a business bank account. An EIN can also help protect against identity theft and simplify your administrative processes.

There are two ways to get an EIN. You can apply for an EIN on the IRS website, or you can mail in a Form SS-4. If you apply online, you will get your EIN immediately. 

No matter how you get your EIN, it is free. So, there is no need to pay anyone to get one for you.

Read More: How to Get an Employer Identification Number in Maine

First Tasks After Registering your Maine LLC

Forming a Maine LLC is an essential first step when starting a business. Still, completing some additional tasks will help strengthen and protect your company.

Open a Business Bank Account

We suggest that you open a bank account for your LLC. This will allow you to manage your business’s finances separately from your personal funds.

The advantages of using an LLC bank account include:

• Convenience: Keeping things separate makes your LLC’s bookkeeping much simpler.
• More business opportunities: Your LLC can only receive credit card payments through a business bank account. You can also do business with people who won’t take personal payments.
• Personal asset protection: Mixing your personal and business funds could cause you to be held responsible for the LLC’s debts.

Of these, personal asset protection is crucial.

One of the benefits of starting an LLC is that you and your business will be different legal entities. This separation is known as the “corporate veil.” It prevents creditors from seizing your personal assets to pay off business debts.

A business bank account will help you keep your business and personal funds separate. This is important because mixing the two can lead to the “corporate veil” being pierced in a lawsuit.

If the corporate veil is pierced, you can be held personally liable for business debts. But if you keep your funds separate, you will be able to take advantage of the personal asset protection offered by an LLC.

Get Business Insurance For Your Maine LLC

Purchasing business insurance is a great way to protect your Maine LLC. Make sure that you take the time to determine what type of business insurance best fits your company’s needs.

We suggest that you consider the following types of business insurance:

• General liability insurance: You’ll need this if there’s an injury on your property. It pays for damages and a lawyer if you need one.
• Commercial automobile insurance: This works like your own car insurance. It covers drivers and vehicles for your business.
• Workers’ compensation insurance: Maine law requires most employers to obtain workers’ compensation insurance coverage. You can choose to buy a policy from a private insurance company or get approved to self-insure.
• Commercial property insurance: This protects your property in the event of damage. Keep in mind that flood insurance is often a separate policy.
• Professional liability insurance: Lawyers, doctors, architects, and other professionals need this insurance. It provides coverage and legal defense in the event of a malpractice case.
• Business income insurance: If you have to close for some time, business income insurance can pay back the loss of income. Policies vary, though. Make sure that you know exactly what kinds of losses will be covered.

Keep Your Maine Company Compliant

Once you have formed an LLC, it is critical to adhere to all applicable laws. For instance, certain businesses may need to get a license or permit. Additionally, your LLC might be required to file taxes.

You should always stay current with the latest changes in the law. This will help you make sure your business stays compliant.

Maine Business Permits and Licenses

You may need to get a general business license from your town or city. Certain professions and types of businesses will also need to get additional permits and licenses. You can learn more on Maine.gov’s Business Licensing page.

Maine Tax Requirements

LLCs in Maine are subject to state sales, use, and service provider taxes. Check out the Maine Revenue Services website for more details.

Federal LLC Tax Filing Requirements

LLCs are considered “pass-through” entities, so they aren’t required to pay federal income tax. Instead, LLC profits must be reported as the personal income of its owner on a Schedule C.

You will also need to pay Social Security and Medicare taxes, even if your LLC does not have any workers. If you do hire employees, make sure you withhold payroll taxes from their wages.

Annual Report and other Filing Requirements

Maine Revised Statutes Section 31-1665 says that all LLCs must file an annual report with the Secretary of State. You can file your report online, or you can download a paper report and submit it by mail or UPS/ FedEx. There is an $85 filing fee.

Maine Business Formation Quick Links

• Internal Revenue Service — apply for an EIN online
• IRS information regarding the federal tax treatment of LLCs
• LLC Forms and Fees (SOS)
• Credit Card Payment Voucher (SOS)
• Corporate Name Search (SOS)
• Small Business Resources (SOS)
• Annual Report Filing (SOS)

Statutes:

• Name Requirements: Maine Revised Statutes Section 31-1508
• Name Reservation: Maine Revised Statutes Section 31-1509
• Assumed Name: Maine Revised Statutes Section 31-1510
• Registered Agent: Maine Revised Statutes Section 31-1661
• Certificate of Formation/ Operating Agreement: Maine Revised Statutes Section 31-153
• Annual Report: Maine Revised Statutes Section 31-1665