How to Start an LLC in Maine

Maine is known for its rugged individualism along with its jagged rock cliff coastline. This extreme northeastern state has both moose and lighthouses, along with excellent lobster. It is also the end of the Appalachian Trail. Yet, Maine can be the beginning of your trailblazing business. It has 147,240 small businesses that makeup almost all of the state’s economy, topping 99.2% of all Maine’s businesses. Small businesses in Maine employ 56.5% of the state’s workforce by giving jobs to 289,156 people. The state has large businesses, like J.D. Irving and Idexx Laboratories too. J.D. Irving employs 15,000 people and Idexx Laboratories employs 7,000 people. Some of the top industries in Maine are fisheries, shipbuilding, and manufacturing machine companies but other industries are also big ones for the state. These include forest products, and clean energy. Maine state officials said some industries trending upward include accommodation and food services, waste services, finance, and insurance.

The natural place to start creating an LLC is to select a name. Maine entity names are governed by state law, specifically Title 13-B, §301-A. The law states the name must be distinguishable from all other businesses on state records. 

State law also says your business name can’t be similar to another one that’s already in use. 

Names can’t be similar

Maine defines what can make a business name confusing and lists things like only adding a suffix like LLC to a name already registered, adding articles like “the” or “an,” using conjunctions such as “and” as well as the symbol “&,” changing the words to singular, plural or possessive forms, and using abbreviations, symbols, punctuation, fonts or typefaces to make the name look different while being the same as another business. 

According to Maine law, such practices create confusing names and those will not be approved by the state in a registration application.

Names must include LLC

All LLCs in Maine must have either LLC or Limited Liability Company in the name. Other general guidelines are that a name can’t be similar to a state or federal agency, can’t suggest a connection to a government agency, can’t imply an illegal purpose, and can’t use the word “Olympic.”

Name must be available

Those forming an LLC in Maine should check on name availability. For that, you’ll visit the state website, conduct a name search, and review the results provided. 

This search tool will only generate up to 100 records at one time so you may need to narrow your terms or do several searches to determine if your name matches, or is similar, to another in the state.

If the name is already in use, you can’t use it. If the directory shows that no other business is using the name, you can use it. 

Check other sources

You can also do a check through major search engines targeting the State of Maine, just to see if there’s anything else associated with your proposed name.

Before registering your name, check to see if a matching domain name and social handles are available too. While it may be that a domain with your chosen name is being used for a business outside of Maine, knowing you can’t use that domain for your LLC could cause you to rethink the name and choose something more unique. 

An LLC in Maine must have a registered agent listed on its formation paperwork to gain state approval. A registered agent is someone who can accept legal documents, like service of process, on behalf of the startup. This is an important function as your LLC may receive government documents or court-related papers. 

The State of Maine isn’t as strict as some states about rules to be a registered agent. You can be your own registered agent or you can ask a family member or friend to do it. There are three primary conditions Maine has for all those wishing to serve as registered agents. 

To be a registered agent in Maine, you must: 

Some business owners hire a registered agent service. This is a viable solution because it saves business owners stress and aggravation should a legal document come in the middle of a busy day or when they are serving a customer in their shop. 

There are companies within the state and nationwide corporations that handle this function. The cost of hiring a registered agent in Maine ranges from $49 to $150 yearly. There is a list of commercial registered agents that can offer services in Maine on the Secretary of State’s website. 

However, three national companies that are approved to do business as registered agents in Maine are Northwest Regional Agent, ZenBusiness, and Bizee.

We recommend:

Visit ZenBusiness

Pros

• Solid customer support
• Long track-record of reliability
• Large company with lots of resources

Cons

• Hard to find refund and cancellation policy

Visit Northwest

Pros

• Industry experience
• Stellar customer reviews
• Personalized support
• Volume discounts

Cons

• Fewer add-on services than some competitors
• State fees charged separately (industry standard)

Visit Bizee

Pros

• Excellent value for money
• Quality services
• Good customer reviews
• No hidden charges
• Live chat support

Cons

• A lot of upsells in the signup process

Filing for a Certificate of Formation called a form MLLC-6 with the State of Maine is what makes your LLC an official business. In other states, you file Articles of Organization. It’s the same form, just a different name. 

The form is a pretty basic one that shares some crucial information with the state including:

The form also allows the LLC members to attach an exhibit to expound on other matters. This is not mandatory but is a place where you can clarify other parts of the business structure on state records.

You must provide complete contact information for the application, including your name, address, and email address for the form to get approved. Otherwise, it will be returned. Forms can be filed online or sent by mail, FedX, or UPS. There are different mailing addresses for the service you use. 

Those using regular mail service should send the form to the Department of the Secretary of State, Corporations, UCC and Commissions, 101 State House Station, Augusta, ME 04333-0101. 

Those using FedX or UPS should send it to the Department of the Secretary of State, Corporations, UCC and Commissions, 111 Sewall St., 4th Floor, Augusta, ME 04330

Filing fee 

The filing fee to apply for a Certificate of Formation in Maine is $175. There is an expedited service where you can get paperwork filed the same business day for an additional $100 filing fee per entity. 

However, you will only need to pay the additional fee once if you’re filing several documents for the same LLC simultaneously. 

The State of Maine accepts payments by credit card, check, or money order.

Maine processing time 

Processing time for business entity filing is currently backlogged. The department is limiting telephone customer service hours from 10 a.m until 5 p.m. to address the backlog. 

The current processing time for corporate filings is between 25 and 35 days. The state asks that anyone wishing to know if their business formation filing has been processed should do a corporate name search on the website search engine to see if their business name shows up. Additional filing information can be found on the Information Summary page.

Expedited filings will not show up for download until the next business day.

The State of Maine doesn’t require a new LLC to draft an operating agreement but it’s a smart business decision. An operating agreement states how you and other members plan to run the LLC and details what happens in the event of unforeseen circumstances, such as a member’s death. 

Creating an operating agreement also clarifies rules so the LLC doesn’t fall under state law by default, which can create a lot of confusion and some legal issues.

An operating agreement should include: 

Once you pick a name, select a registered agent, file the formation paperwork, and create an operating agreement, you can start doing business as an officially-recognized company. However, there are still a few more items entrepreneurs need to do.

An employer identification number (EIN) is something you obtain from the Internal Revenue Service. It identifies your business much like a Social Security Number identifies a person. While all businesses aren’t required to get an EIN, all multi-member LLCs are required to have one. 

Other businesses that are required to have an EIN include those:

These are federal regulations implemented by the IRS, not the State of Maine.

One crucial element of running your LLC is opening business bank accounts. This should include both a checking and savings account. You want the LLC accounts to be separate from personal accounts to ease tax returns and accounting procedures. 

It also makes it easier for you to keep track of expenses and revenues to share with other LLC members.

Where you do your banking in Maine should be a thoughtful decision because the bank or credit union you build a relationship with would be the best place to go for a business loan. Three banks in Maine cater to small businesses. They are Bar Harbor Bank & Trust, Bangor Savings Bank, and Partners Bank. There are also numerous credit unions.

An LLC is its own business entity. For tax purposes, regardless if the LLC is manager-managed or member-managed, profits and losses are reported on the owner’s personal tax returns.

The owner pays federal taxes and state taxes as an individual, not as a corporation.

The state imposes income taxes on all business entities with income originating in the state. It is a graduated tax with rates that range from 3.5% to 8.93%. Rates are based on the total amount of annual revenue. 

Those on the lower end of the scale can have income up to $350,000 and maintain a lower tax rate. Those with a yearly income of more than $3.5 million will have the highest tax rate. 

Maine also charges a 5.5% sales tax on all goods.

Tax incentives in Maine

However, the state has many tax incentives, exemptions, and credits available to specific industries. Some of those include:

There are other tax credits and exemptions given to those in specific industries like chemicals and biofuels, manufacturing, custom computer programming, commercial agricultural businesses, and biotechnology.

Maine requires all businesses to file an annual report; sometimes referred to as a Statement of Information in other states. The annual report is a chance to change anything on the business information such as a change of registered agent. 

The first report must be filed between January 1 and June 1 of the following calendar year after the formation of the LLC. If your LLC was formed in January, you would file it next year. Those filing for business entities in December would file between next January and June 1. 

After that, all annual registrations have a June 1 deadline. They can be filed online or by paper mailing. The fee for filing a domestic business annual report is $85. The fee for a foreign business is $150 and all nonprofits have a $35 fee.

In this type of business, personal liability protection is standard. All personal assets like your home, car, and bank accounts are protected, but it’s still important to have insurance. This includes liability, workers’ compensation, property, and health insurance. 

The only insurance Maine requires is workers’ compensation insurance if a business has employees. Workers’ compensation pays for medical bills if there is an accident on the job that typical health insurance won’t cover.

It’s a good idea to get liability and property insurance even though the state doesn’t require that a business have them. It protects your LLC members should there be an incident with a customer, a theft, fire, or some other calamity. 

There are also insurances likely required by landlords if you rent a shop or other businesses you take on as clients.

Additional resources to help you set up a business in Maine

The State of Maine has plenty of resources for those seeking to start a small business. Below are some of those who can help answer questions and guide you.