Start An LLC In Maine
Limited Liability Corporation (LLC) is becoming more popular in Maine. Entrepreneurs now appreciate the operations and tax systems of this business structure.
However, most people think it’s complicated to form one, but that’s not the case. Keep reading to learn how to start an LLC in Maine.
Let’s first see how Maine compares to other states as a place to start an LLC.
| State | Maine | New Hampshire | Massachusetts | Vermont | US Average |
|---|---|---|---|---|---|
| Population | 1,362,359 | 1,377,529 | 6,984,723 | 643,077 | 6,619,825 |
| LLC Filing Fee | $175 | $100 | $500 | $125 | $130.38 |
| LLC Annual/Biennial Fee | $85 (every year) | $100 (every year) | $500 (every year) | $35 (every year) | $89.34 (every year) |
| Corporate Tax Rate | 3.50-8.93% | 7.60% | 8.00% | 6.0-8.5% | 5.60% |
| Nominal GDP per capita | $55,425 | $91,129 | $56,028 | $64, 773.08 |
Requirements For Starting An LLC In Maine
You need to have certain things to start an LLC in Maine. They include:
- A licensed and named business
- A registered agent
- Formation documents
- Operating document
- Employer identification number (E.I.N.)
How Much Does It Cost To Start An LLC In Maine?
As a business owner, you always work with a budget to achieve your goals. For this reason, you need the answer the question’ how much to start an LLC in Maine?’ to make the right moves. Here is a breakdown of the costs.
You must fill out and mail or hand-deliver the certificate of formation to Maine’s Secretary of State. This will cost you $175, which is non-refundable if you do it yourself. If you get the help of an LLC formation service, you will pay service fees.
In addition, if you have an existing LLC but would like to expand your services to Maine, you will be considered a foreign LLC. The filling cost for a foreign LLC is a non-refundable $250. Its registration is done by filing Form MLLC-12 and sending it by mail.
If you want to expedite the process, you will pay an additional $50 to be completed in 24 hours or $100 for immediate service per entity.
Furthermore, creating a new name for your LLC is a requirement. You can reserve your name for 120 days before forming your LLC by filing and mailing an Application for Reservation of Name form to the Secretary of State. This will cost you $20.
If you don’t need to expedite the formation process or perform additional procedures, your budget should be $175. However, prices change. Therefore, it will help to call the Secretary of State’s office to get current prices.
You have probably heard people talking about how to start an LLC in Maine for free. However, this is impossible because you need to pay filing fees before the process begins.
Steps To Start An LLC In Maine
So, what steps should you take when creating an LLC in Maine. The following are the steps to follow:
- Pick a Name for Your LLC
- Find a Registered Agent in Maine
- File the Certificate of Formation
- Create an Operating Agreement
- Get Your EIN
Pick A Name For Your LLC
You need to have an LLC name for your business. According to the state’s law, your name should follow specific guidelines. For instance, it should have ‘Limited Liability Corporation’ or ‘Limited Company’ or suffixes like LLC, LLC, L.C., or L.C.
Come up with a name that communicates your brand. Use the corporate name search to discover names already taken by other businesses. Also, do not use obscene words or statements that promote illegal activities.
Moreover, if your LLC will have a different name from the one you will be doing business with, you need to create a Doing Business As (D.B.A.) name.
With this, you will file and mail a form for a Statement of Intention to Do Business Under an Assumed Name or fictitious name. The fee for filing an assumed form is $125. The fee for foreign LLCs to file for a fictitious name is $40.
In addition, you will probably create a website for your business. Hence, you need to find and secure a matching domain. Do a domain name search. If you find a matching one, buy it, even if you are not planning to open a website soon.
It’s also best to also get a trademark for your business name. Visit the United States Patent and Trademark Office website to find out if your chosen business name is already trademarked. While at it, register and maintain a trademark for your new business name.
Find A Registered Agent In Maine
It helps if you work with a registered agent to handle legal documents on behalf of your business. A professional agent will save you time and ensure every step is followed correctly. However, you can also serve as your registered agent in the state of Maine.
| ZenBusiness – $49 + state fees to register your LLC (read review) |
| Incfile – $0 + $50 state fees to register your LLC (read review) |
Certificate Of Formation
The Certificate of Formation form is available online on the Maine Secretary of State’s website. Download the PDF file and fill out the form. The required details are entity name, entity type, registered agent name, office address, and filing date.
After you are done, download and print the file, then mail it to the Secretary of State’s office plus the fees. The mailing address is:
Secretary of State Division of Corporations, U.C.C., and Commissions
101 State House Station
Augusta, ME 04333-0101
Operating Agreement
An operating agreement outlines the ownership and operations of your LLC. This includes how ownership is divided, who will manage the processes, how much each member invested, how profits and losses will be divided, how roles and rights can be transferred, and how the business can be dissolved.
You need to create an operating agreement so that all members of the LLC.are on the same page. This reduces the chances of misunderstandings in the future.
Consequently, it can help your LLC stay in business for years. Use an operating agreement template to make work easier for you. Even though you will not file this document to the state, you are required by law to have it in place.
Get An EIN
The Internal Revenue Service (IRS) usually assigns businesses an Employer Identification Number (EIN) to identify them for tax purposes.
You need this number to run business operations like hiring employees, filing for faxes, or opening a business bank account. Even if you had one for your sole proprietorship business, you need to apply for a new EIN for the LLC if it has more than one member. You can request the IRS for an EIN online. It is free.
Did you know?
LLCs in Maine are subject to federal income tax classifications. This means that you will have different tax responsibilities based on your chosen classification.
LLC Taxes In Maine
How Much Do LLCs Have To Pay In Taxes In Maine?
LLCs don’t pay federal taxes. Members are taxed on their personal income. However, they usually pay government taxes like Maine Sales Tax, which is currently at 5.5%.
You may pay other federal and state taxes. Federal taxes are collected by the federal government, whereas state taxes are managed by the state, which is Maine. It is difficult to know how much LLC s in Maine pay in state and federal taxes because the structure is different.
Is Maine A Good Place To Start An LLC.?
Creating an LLC in Maine is an excellent choice if you want your business to be taxed as a single-member, multi-member, S Corp, or C Corp LLC
Furthermore, after you send your certificate of formation, it will take the state only 5 to 10 days to process and give you a response. This allows you to start your operations sooner.
Also, it is cost-effective to run an LLC in Maine. You need an initial $175 and $20 to reserve your business name. In addition, you will be filing an annual report at a fee of $85. Your report should be filed online or sent by mail by June 1 every year.
What To Do After Formation?
Once the Secretary of State informs you that your formation was successful, it’s time to do business now. Getting your LLC registered is just the beginning. You need to run your business professionally to take it to the next level. The following are things you need once the LLC is formed.
- Create a logo – You need a logo that represents your business. It should have a theme color or symbol unique to the LLC. You can hire experts to create a professional logo or use a logo maker tool.
- Build a website/eCommerce store – Today, a significant percentage of customers search for businesses online first. For this reason, you should have a website or eCommerce store if your LLC involves selling products. Since you would have bought a URL, setting up a website should be faster. Work with a professional to create an eye-catching site.
- Get a bank account – You should have a separate bank account for the LLC. Also, get a business credit card. You or any of the other members should never mix personal and business assets.
- Get business Insurance – You never know what may hit your business. For this reason, you need a business insurance plan to manage risks, allowing your LLC to grow. The types you need are general liability insurance, which all Maine businesses are required to have, professional liability insurance, and workers’ compensation insurance.
- File annual reports – All LLCs in Maine are required to file an annual report by June 1 every year. The Secretary of State’s website has a preprinted annual report that you can obtain using your LLC’s charter number. Fill out the form and file it online or by mail. Late filings attract a $50 fine. LLCs that fail to file the report after 60 days can be dissolved.
These factors are vital for running your LLC. smoothly. Ensure that you work with experts and get everything by the book to avoid inconveniences. For example, a registered agent will always remind you to file annual reports.
Resources To Start A Successful LLC In Maine
You should check out these sites if you want more help on how to start an LLC in Maine.
Start Marketing Your LLC In Maine
You need to market your business to stand out. For this reason, consider being active on social media, asking for referrals from existing customers, designing outstanding and informative business cards, blogging, and working with influencers. You should also learn from other businesses.
How To Dissolve An LLC In Maine
If at any point you and the other members of the LLC, if there are any, want to dissolve the business, you should do it officially. Not taking the right steps will lead to penalties and tax liabilities. Also, don’t let the LLC be automatically dissolved, for example, by not filing your annual report. This can lead to the loss of limited liability protection.
You need to follow your operating agreement to dissolve the LLC professionally. Then, close active business tax accounts. To do this, you must have paid any fees or fines owed to the accounts. Most tax accounts have a simple closure process. All you need to do is file a final return to the respective agency. Hire a professional public accountant to help you with the process.
Lastly, you need to file articles of dissolution, also called Certificate of Cancellation. You can file it by mail or take it personally to the offices. The filing fee for this form is $75. Once this form is processed, your LLC will be officially dissolved.
Conclusion
How to start an LLC in Maine is a popular subject. It is not an intricate process, especially if you work with experts and follow the right steps.
The Secretary of State’s website has the forms you need, from the certificate of formation to the certificate of cancellation. To run your business effectively, it is also important to have an operating agreement, EIN, bank account, bank insurance, and marketing strategies. If you are looking to start an LLC in Maine, use this article to guide you.