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Forming an LLC in Maine

Limited Liability Company (LLC) is a business entity that many small businesses choose as a way to organize themselves when they are just getting started. An LLC has a few advantages for small businesses but may not be appropriate for larger ventures or startups that are seeking investors. In addition, LLCs have a unique business structure that can get very technical.

You should look closely at other business entities like partnerships and S Corporations, before launching a Maine LLC.

We make business formation EASY. Learn about our DIY business formation services here.

Advantages of LLCs:

  • Limited personal liability for members for business debts and lawsuits.
  • Fewer reporting and recordkeeping requirements than other kinds of entities, including corporations.
  • Avoiding the double taxation—business and personal—of corporations if taxed as a pass-through entity.
  • Unlike corporations, Maine LLCs do not have to file annual or biennial reports with the state.

Disadvantages of LLCs:

  • An LLC is not a good investment vehicle for outside investors.
  • LLCs and S and C corporations pay commercial activity taxes, unlike sole proprietorships and partnerships.
  • LLC owners may pay self-employment taxes.

Registering Foreign LLCs in Maine

Any foreign (out-of-state) LLC that wants to do business in Maine must register with the Secretary of State. There is a $250 filing fee.

Step-By-Step: Forming a Maine Limited Liability Company

With all of that, you have decided to form an LLC in Maine. You have your members, your business plan, and a little startup capital, and you are on your way.

Here is a step-by-step guide for how to create a fully operational Maine LLC.

Step I: Name Your LLC

Creating a legally proper LLC name and then protecting it is one of the first actions in LLC formation. This is a process that can be complex and time-consuming, but it is essential for the LLC to operate legally in Maine.

The first thing you have to do is create a great name (that's up to you). Maine law requires that the business name be unique and different from any other company's name.

So your first task will be to search the Secretary of State Business Services business name search page to make sure that your chosen name isn't already in use for an existing business.

This search is just a preliminary step to the state filing. You still need to go through the registration process to get your name approved by the state.

The name you decide on must contain one of the legal suffixes:

  • Limited Liability Company
  • Limited Company
  • L.L.C.
  • LLC
  • L.C.
  • LC

In addition, a low-profit LLC must have the suffix L3C or l3c.

Professional LLC

A Maine Professional Limited Liability Company can use the designation PLLC. That designation is limited to certain professions, as spelled out in the statute.

Low-Profit LLC

Maine law allows a low-profit LLC structure for organizations that have charitable or otherwise public interest intent. This is designated by the suffix L3C or l3c in the name of the company, and the L3C must conform to Maine law regarding such organizations.

The name cannot use any variation of the word “corporation." It cannot use language considered obscene or that claims a profession or business affiliation that does not exist.

Reserve Your Name

Maine allows you to reserve a business name for 120 days while the formation process is going forward. This is no guarantee that your name will be approved, but it keeps anyone else from using it for that time.

Step II: Appoint a Registered Agent

The State of Maine requires an LLC to appoint a registered agent for service of process before formally filing with the state. A registered agent is designated to receive process (legal documents) on behalf of the LLC. A Maine registered agent can be an individual or a company (domestic or foreign), but it must have a physical Maine street address. A forming LLC will often choose a professional registered agent service or may choose the company lawyer.

Step III: Legally Protect Your Business Name

Next, make sure that no one else can use it in business or on the internet. This means that you have to make sure that no one else is using that name. You do this by doing a name search to make sure that the Internet Domain Name is available. If it is available, grab it immediately (that will only cost a few dollars).

If you want to do business nationally, or you want to operate in several other states, you should trademark the nonprofit's name with the United States Patent and Trademark Office (USPTO). This process takes some time and money. The name is still protected as a common law trademark while that application is pending.

Once you receive your federal trademark, apply to the Maine Secretary of State to register it as a Maine trademark or service mark. You may also trademark the Maine LLC name with just the state, without a federal trademark.

If you are going to do business under a fictitious name—that is, a DBA, you must register that name with the City Clerk's office in the city in which you are doing business. A DBA name is not registered with the state of Maine.

Now that name is yours, you can keep anyone else from using it, and it conforms to Maine law.

Step IV: Structure the Business

An LLC has a particular, unique business structure.

To begin with, the stakeholders of an LLC are called “members." There is no stock issued, so they cannot be “stockholders." This is the primary reason that an LLC is not a good investment vehicle for either the founders or potential investors.

There is no number of members required. You can have a single-member LLC—say, for a one-person office.

Secondly, a Maine LLC must be governed by an LLC Operating Agreement, which is called a “Limited Liability Company Agreement" under Maine law. This is similar to, but different from “bylaws," “charters," or other forms of corporate organization.

The Maine Limited Liability Company Agreement should contain the following points:

  • Percentage of members' ownership
  • Voting rights and responsibilities
  • Powers and duties of members and managers
  • Distribution of profits and loses
  • Holding meetings
  • Buyout and buy-sell rules (procedures for transferring interest or in the event of a death)

An LLC may be managed by the members, or it may hire an outside manager. You will indicate which you have chosen on your registration application.

Step V: Write and File Your Maine Certificate of Formation With the Secretary of State

You are now ready to compose and register your Maine LLC as your business registration with the Maine Secretary of State.

Foreign LLCs cannot use this process. They must register separately, as noted above.

Your Maine Certificate of Formation must be mailed to the address at the end of this section. It cannot be processed online. There is a $175 filing fee, with expedited service available for an additional fee.

Your LLC Certificate of Formation documents must contain the following:

  • Name of the LLC
  • Filing date (date of mailing or a later date)
  • If applicable, the LLCs designation as a low-profit LLC or professional LLC.
  • Registered agent
  • Any attachments the LLC owners or members decide to include, particularly the LLC Company Agreement.
  • Signature(s) of at least one authorized person.

The Certificate of Formation must be accompanied by a cover letter that includes the following information:

  • LLC name
  • List of the filings you are enclosing (Certificate of Formation)
  • Any special handling requests (This is where you can check a box if, for example, you want expedited filing. You can pick 24-hour or immediate service.)
  • Contact information for whoever can answer questions, along with the address the Secretary of State should send the return documents.

Mail the Certificate of Formation, along with the filing fee, to:

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

After You File Your Certificate of Formation

You will have numerous state and federal requirements for your new LLC after you file with the state.

State Business Licenses

Certain kinds of businesses (professionals, construction, liquor businesses, etc.) must be licensed with the state of Maine. In addition, there may be local business licensing requirements, environmental impact requirements, etc.

State Employer Filing Requirements

Your LLC will be subject to state rules if it has employees—even if the employees are also members.

LLC Taxation

You will be subject to both state taxes and federal income taxes. This is a job for your accountant, but here is a brief outline of your tax obligations.

You will be subject to both federal withholding tax if you have employees and, of course, to business income taxation.

You must file to receive an IRS Federal Employer Identification Number (FEIN) on the Internal Revenue Service website if you will have employees. You must also apply for your FEIN if the LLC has more than one member. You will be subject to all federal tax-withholding rules.

LLCs also have very specific requirements for filing taxes.

Register With Maine Revenue Services

Register online with Maine Revenue Services for all of your LLC's Maine business taxes, including withholding taxes, sales taxes, use, and service provider taxes.

Annual Reports for an LLC

Maine LLCs must file an annual report with the Secretary of State in order to remain in good standing.

Want Help Forming a Maine LLC? 

Fortunately, forming an LLC in Maine can be a straightforward process with FindLaw's Business Formation Service. If you have questions, or would simply like the guidance of an experienced legal professional, you should contact a local business organizations attorney who will know all the applicable laws and procedures for forming an LLC in Maine, and how you can start your business off on the right foot.

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