If you’re ready to form a limited liability company (LLC) in Maine, you are probably wondering how much it will cost. Having a basic understanding of the expenditures you must make is vital.
This article will explain the expenses of starting a Maine limited liability company.
Some of the topics we will cover include:
- Required expenses to start a Maine LLC
- Additional costs you should consider
- How to select the right LLC formation method
Keep reading to learn everything you need to know to make a budget for a Maine LLC formation.
Total Maine LLC Cost – Starting at $175
According to the Maine Secretary of State's Forms and Fees, the minimum cost of making a Maine LLC is $175.
This only includes one item:
- Maine Certificate of Formation filing fee: $175
Some LLCs will need to register with Maine Revenue Services, but this is free of cost. You may also need to apply for professional and local business licenses for your LLC, the costs of which vary.
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Maine LLCs – the Basic Costs
The total cost of starting an LLC in Maine will vary. However, the lowest potential cost is $175. We’ve explained in the sections below what your mandatory expenses might be when starting an LLC.
Certificate of Formation Filing Fee — $175
A Certificate of Formation is an official document that legally forms an LLC. To start a Maine LLC, you must submit a Certificate of Formation to the Secretary of State. Don’t be intimidated! You just need to fill out a form with basic facts about your business.
The state filing fee for a Maine Certificate of Formation is $175. Maine does not offer online filing, so you must use a paper form when filing this legal document.
State Tax Office Registration — Free
Maine law says that LLCs that sell tangible goods and certain taxable services must register with Maine Revenue Services to obtain a retailer’s certificate. There is no fee to do so.
Check out the Sales and Use Tax Guide to learn more.
Professional Licenses and Business Permits — Variable
Main requires businesses in certain industries to obtain state licenses and permits. You can review Maine.gov’s Business Licensing page for more information about these rules.
Your LLC may also need a local permit or business license. For instance, the city of Portland, ME, requires some companies to get business licenses.
Maine LLCs – Optional Costs to Consider
On top of the mandatory costs we’ve already discussed, it may be wise to invest in some additional expenditures. These optional expenses can help your Maine limited liability company thrive and grow.
Expedited LLC Filing Fees — $50 to $100
In Maine, standard LLC processing times generally range from 10 to 15 business days. If you need to get your LLC faster, you can pay for expedited filing. 24-hour processing costs $50, and same-day filing is available for a $100 fee.
Registered Agent Fee — about $100 per year
Maine requires every LLC to name a registered agent to receive legal papers for the company. You will include your LLC’s initial registered agent details in your Certificate of Formation. However, there is a $35 fee if you need to change your agent.
Some business owners think it’s a good idea to be their own LLCs’ registered agents. Unfortunately, they often don’t know the extent of their responsibilities when they sign up.
First, the law requires registered agents to always be able to accept documents during standard business hours. Plus, agents’ addresses are listed online, so they typically receive a lot of junk mail and can even have their privacy invaded.
That’s why we suggest that all LLCs use a professional registered agent service. They only cost around $100 per year, and the service will handle all of your registered agent duties for you.
Check out our Best Registered Agent Services article for some of our recommendations.
Operating Agreement — Variable
A Maine LLC operating agreement is a formal contract that establishes the rules for the company’s owners. They list vital terms such as the members’ privileges and duties, and the processes for exiting or joining the LLC.
Maine is one of the only states that require LLCs to have operating agreements. You don’t have to file your operating agreement with the Secretary of State, but the law does mandate that you make one and keep it for your records.
Although you can write an operating agreement for your own LLC, we recommend working with a professional.
One option is to hire an attorney to draft an LLC operating agreement for you. Doing so will give you a thorough, accurate, and highly-customized contract. But know that lawyers can be pricey. If you want to save money, an LLC formation service can deliver an operating agreement for as little as $39.
DBA Fee — $125
Many LLCs are run under “doing business as” or “DBA” names. A DBA is a name that a business is called other than its official name. For example, business owners often drop the “LLC” when marketing their companies.
In Maine, DBAs are called “assumed names.” If you want to use a DBA for your LLC, you must submit a Statement of Intention to Transact Business under an Assumed or Fictitious Name to the Secretary of State.
There is a $125 filing fee. You must use a paper form.
Name Reservation Fee — $20
If you have decided on an LLC name for your LLC but don’t have the paperwork in order, Maine lets you reserve a business name for 120 days. Reserving a business name protects it so that no one else can take it during that time.
To reserve an LLC name, you must file an Application for Reservation of Name with the Secretary of State. There is a $20 state fee, and you must submit a paper form.
Domain Name — about $20 per year
In today’s market, a functional and informative website goes a long way in marketing your business. If you want to build a website for your business, you must purchase a domain name for it to use. But don’t worry; domains are affordable and painless to get.
Even so, it’s vital that you buy your domain name as soon as you can. If you don’t, someone else might take it first. For instance, “domain squatters” buy up a newly-formed LLC’s possible domains. Then they resell them at a markup.
You can easily purchase a domain from GoDaddy.com or a similar company for about $20 to $50 per year. These businesses also offer regular discounts, so you can likely get one even cheaper.
Getting an Employer Identification Number (“EIN”) — Free
EINs are 9-digit identification numbers given to companies by the Internal Revenue Service. Many people think of an EIN as a social security number for their business. While the law requires some LLCs to obtain an EIN, others don’t have to.
No matter what, we always suggest that LLCs get EINs. This is because most banks will demand an EIN to open a business account. Plus, EINs help to protect against identity theft.
You can get an EIN online or mail Form SS-4 to the IRS. It’s always free to apply for an EIN, so don’t you don’t need to pay someone to get you one. You can get yourself an EIN at no cost in just a few short minutes.
Foreign LLC Qualification Fees — about $100 per extra state
If you’re planning to expand your business outside Maine, you’ll need to budget for additional costs. While you won’t need to start a new LLC in every state you operate, you will need to register as a foreign limited liability company.
Foreign LLC filing fees differ among the states, but they are often in the $100 range.
Writing Formation Costs Off
You can generally deduct your LLC formation expenses as business startup costs on your federal income taxes. The IRS provides substantial guidance on the topic, so we suggest that you check out the IRS website to learn more.
LLCs are considered to be “pass-through” tax entities by default. This classification allows LLC owners to deduct up to $5,000 in startup costs from their federal income taxes in their LLC’s first year.
Ursula decides to start a single-member LLC and open a valet parking service in Portland, Maine. Her formation costs are as follows:
- Maine LLC Certificate of Formation: $175
- Expedited (same-day) LLC Filing Fee: $100
- Portland Business License Application Fee: $45
- Portland Valet Parking Permit: $273
- Operating Agreement: $47
- Maine Registered Agent Service Fees: $100
- DBA Fee: $125
- Name Reservation Fee: $20
- Web Domain Costs: $30
Because the LLC is a pass-through entity, it doesn’t pay income taxes. Rather, Ursula herself must report her proceeds from the LLC and any deductions on her personal state and federal income taxes.
Ursula's total formation expenses were $915. Before deducting these costs, her total taxable income was $47,000. But with deductions, Ursula reduces her taxable income to $46,085. This drops her 2023 federal income taxes from $6,089 to $5,887.
Even though this is not a massive decrease, LLC owners who commit to deducting costs will see their tax savings grow over time.
Cheapest Way to Start an LLC in Maine
It can be tricky to decide on the best formation approach for your LLC. We’ve explained some of the most popular formation methods below. Be sure to consider the specific needs of your LLC as you read.
Formation Service – $39 + state fees
LLC formation services are a popular choice, particularly among first-time entrepreneurs. These companies aren’t law firms, but they specialize in the business entity formation process.
Formation services are a practical choice for most LLCs. The advantages of this option include:
- They’re easy. In most cases, a formation service will have helped hundreds of people through the exact process you are struggling with now. They have all the documents, information, and expertise you need right on hand.
- They don’t cost much. Because formation services have such a large volume of business, they don’t have to charge their clients that much money.
- They’re reliable. All of the formation services’ products and procedures have been tested hundreds of times over in the real world. That kind of experience should give you peace of mind and confidence going forward.
- They’re fast. Formation services have seen almost every business formation situation already. Chances are, they have many solutions for you that are ready right now before you even know you need them.
However, a formation service isn’t the best fit for every LLC. The drawbacks to this method include:
- They’re not the best solution for complex LLCs. If you are forming a complicated company or one in a heavily regulated industry, you will have concerns that probably need more focused expertise in that area of business.
- Even if a formation service is a good fit, you can expect upselling. Formation services have to make money too, and some of them may pressure you to buy formation products or business services you don’t need. Even when you are using a formation service, you need to be a smart and informed consumer.
Using a professional LLC formation service can be a great way to set up a business. Check out our Best LLC formation services article for some of our suggestions.
Another popular formation technique is to retain a lawyer. Some business owners want to know that their LLC is being formed by a legal expert. Just remember that this expertise comes at a price. For instance, some attorneys bill several hundred dollars per hour for their services.
While expensive, lawyers offer significant advantages to new business owners:
- Lawyers help you manage risk. If you are starting a business with complicated legal issues, hiring a lawyer would be the best choice.
- Lawyers offer more customization when you need it. Do you need specific things put in an operating agreement? Is your company going to have a unique ownership structure? You may need an attorney to make sure these issues are handled properly.
Still, the disadvantages of this technique can outweigh the benefits:
- Lawyers cost more than any other option. The price tag alone should convince you that if you don’t need a lawyer, it’s not worth hiring one.
- Finding a lawyer takes a long time. Getting a lawyer who specializes in what you need, costs what you’re willing to pay, and can work with you well is a tall order.
- Lawyers also take longer to form a business than a formation service. Because lawyers are also very careful people, they will generally take much longer to form your company than non-lawyers would. Fortunately, most people don’t need a lawyer. In 90% of cases, a formation service will do just fine.
Do it Yourself
Of course, you can always handle your LLC formation on your own. Many business owners see this option as the most cost-effective approach without accounting for the value of their time. Keep in mind that the time you spend on LLC formation documents may be better used on other tasks.
The advantages of a DIY formation strategy include:
- Personal knowledge. A DIY business owner will learn a lot about the process while forming their own business, and they probably will retain that knowledge for years to come.
- It costs less upfront. If you don’t account for the value of your time, a DIY solution is the cheapest option.
However, there are also negative aspects to this method:
- You’re losing money when you consider how much time it takes to DIY. If you figure out that your time is worth $30 per hour, and you take 20 hours to complete your business formation, you have essentially spent $600 on business formation.
- There’s the risk of making a mistake. DIY business owners can easily make a mistake with all the paperwork that can cost them even more time and money.
- It’s a headache. State workers are very helpful, capable people. But they will also tell you that the laws and rules governing business formation are not easy, and they follow those rules for a living. It’s going to be even harder for you.
Annual Maine LLC Fees: How Much Will it Cost to Maintain your LLC?
If your LLC has business licenses or permits, you might also be required to renew them each year.
Some of your optional costs may also be periodic. For example, you might accrue the following expenses each year:
- Registered agent service fee: approximately $100
- Domain name registration: $20 to $60
How Much are LLC Taxes in Maine
LLCs in Maine don’t have to pay income taxes because they are “pass-through” entities. You will list your LLC’s profits on your personal income taxes instead.
However, if you choose for your LLC to be taxed as a corporation, it will be subject to Maine’s Corporate Income Tax.
Maine LLC Formation Costs Quick Links
- Maine Forms and Fees
- Maine Secretary of State
- Maine Revenue Services
- IRS — apply for an EIN online
- IRS information regarding the federal tax treatment of LLCs
Maine LLC Formation Costs FAQs
How much does it cost to start an LLC in Maine?
The lowest possible cost is $175. But, it may cost more based on your industry and location.
What is the cheapest way to start an LLC in Maine?
A do-it-yourself formation method is the least expensive in terms of money paid. However, if you consider the value of your time, an affordable LLC formation service is usually the most cost-effective option.
Do I need to hire an attorney to form an LLC in Maine?
No. The average LLC can be started without the help of a lawyer. For most LLCs, a DIY approach or a business formation service will be sufficient.
Can I pay to form an LLC more quickly in Maine?
Yes. Maine offers 24-hour filing for a $50 fee or same-day expedited filing for a $100 fee.