Maine is famous for its delicious lobster, breathtaking coastlines, and expansive forests — and it also boasts an equally vibrant business community.
Readily available capital, reasonable regulations, and strong grassroots support are among Pine Tree State’s perks for new business owners.
It’s no wonder outdoor equipment and apparel giant L.L. Bean is headquartered there.
A Small Business Administration (SBA) report found that small businesses made up 99.2% of Maine businesses in 2020, employing 57.2% of the state’s workforce. And Maine is a friendly environment for minority-owned companies.
If you want to start a business in Maine, consider forming a limited liability company (LLC). This business structure provides liability protection to its owners and has a flexible management structure.
We’ll walk you through everything you need to know about starting an LLC in Maine in this step-by-step guide.
7 steps to open an LLC in Maine
- Step 1: Choose a business name for your Maine LLC
- Step 2: Designate a registered agent
- Step 3: File the Maine LLC Articles of Organization
- Step 4: Obtain an Employer Identification Number from the IRS
- Step 5: Register with the Maine Department of Revenue and Labor
- Step 6: Prepare an LLC operating agreement
- Step 7: Open a Maine business bank account
Step 1: Choose a business name for your Maine LLC
Choosing a business name for your Maine limited liability company is the first and most crucial step.
Under Maine law, your LLC’s name must comply with several naming guidelines. Your business name must:
- Differ from other business entities, registered with the Maine Secretary of State (SOS).
- Contain “limited liability company,” “limited company,” or the abbreviation “LLC,” “L.L.C,” “LC,” or “L.C.”
- Not contain words that refer to other types of legal entities such as “limited partnership” or “Corp.”
- Exclude obscene language or promotions of abusive or unlawful activity.
- Exclude any references to government agencies (e.g., State Department, Treasury, FBI, etc.)
If you intend to use restricted words (e.g., bank or credit union) in your LLC name or a professionally licensed individual (e.g., lawyer or doctor), you may need to file additional paperwork that proves your qualification.
You can check name availability by searching the Maine SOS’s business name database.
Once you verify the selected name availability, you can reserve it for up to 120 days. It gives you extra time to prepare other business formation documents without rushing.
You’ll file an Application for Reservation of Name (MLLC-1) form by mail and pay a filing fee of $20.
If you want to do business under a different legal name, you must register a trade name, often called a DBA, or “doing business as.”
For example, if your business’s legal name is “Kate’s Wedding Gowns LLC” and you want to do business as “Best Wedding Gowns in Maine,” you’ll have to register this trade name with the Maine Secretary of State.
Maine laws recognize fictitious and assumed names as two different designations:
- An assumed name: A DBA that allows you to do business under another name. The filing fee is $125.
- A fictitious name: A name taken by a foreign LLC if another Maine entity uses its legal business name. The filing fee is $40.
To register a fictitious or assumed name, you’ll file a Statement of Intention to Transact Business Under an Assumed or Fictitious Name (MLLC-5) form with the Maine Secretary of State.
Step 2: Designate a registered agent
As a business owner, you might handle several tasks to avoid spending more on payroll and other employee costs. One of those tasks is accepting legal papers on your LLC’s behalf.
Maine LLCs are required to have a registered agent for service of process. The agent can be an individual or business entity that agrees to receive and handle legal paperwork on the company’s behalf.
The requirements for a registered agent generally include:
- Being at least 18 years of age.
- Reside in Maine.
- For commercial agents, have a business entity authorized to do business in Maine.
- Have a physical address (not a virtual office or P.O. Box) in Maine.
- Accept legal correspondence and mail from Maine’s Division of Corporation on behalf of the LLC.
- Keep regular business hours.
Legally, you can be your own registered agent. However, you must meet all the above requirements. You’ll also need to share your personal information (name, address, etc.). It opens you up to annoying sales calls, junk mail, or spam email.
Plus, you must keep regular business hours, which means you have to be available all day every day in case of service of process.
For any business owner, it might be challenging to do all of this while growing a business. So you may consider hiring a registered agent service.
A registered agent service accepts legal documents on your company’s behalf and sends them to you. This way, you’re protected from potentially awkward situations like being served a lawsuit in front of potential clients.
Plus, a professional agent can organize all your legal documents, freeing you to meet other deadlines while keeping your business in good standing with the state.
Registered agent services in Maine cost between $100-$300 per year. But they save you a lot more in penalties and state fees for non-compliance or embarrassment in front of clients.
Step 3: File the Maine LLC Articles of Organization
To form an LLC in Maine, you’ll need to submit Articles of Organization through the mail (there’s no online option).
Before that, there are a few steps you need to take:
- Download a Maine Certificate of Formation (MLLC-6) form.
- Fill out the form with the entity name, entity type, registered agent’s name and office address, and the filing date.
- File the completed form with the Maine SOS by mail.
- Pay a filing cost of $175.
The SOS will process your filing, which typically takes around 5-10 business days (or up to 15 business days in the event of delays and federal holidays).
If you need your LLC formed faster, expedited processing is available at an additional fee:
- 24-hour processing: $50
- Immediate processing: $100
In the latter case, your formation documents are processed the same day they’re received in the mail.
Step 4: Obtain an EIN (Employer Identification Number) from the IRS
Congrats! You’ve formed your LLC.
The next step is to get an Employer Identification Number (EIN) from the Internal Revenue Service (IRS).
You’ll need an EIN to handle payroll and file federal taxes, especially if you plan to hire employees or have multiple LLC members. Single-member LLCs without employees don’t need to get an EIN, though. You can use your social security number to file tax returns if you report taxes as a sole proprietorship.
To obtain an EIN for your Maine LLC, complete and submit your application on the IRS website at no cost.
If you’re not a U.S. citizen or resident who formed an LLC in Maine, you can’t get your EIN online. Instead, you’ll mail or fax Form SS-4 to the IRS.
Step 5: Register with the Maine Revenue Services and Department of Labor
Revenue Services Registration
If you have employees, you’ll register for Maine State Income Tax Withholding by completing and filing an Application for Tax Registration.
Even if you don’t have employees, you’ll still need to register when you sell taxable goods or services. The issued state ID lets you report all applicable state taxes.
Department of Labor Registration
When you have workers, your LLC needs to pay unemployment insurance tax to the state. The tax you’ll pay depends on your industry, payroll totals, and previous experience using the unemployment system.
The official website provides plenty of explanatory videos and text guides about necessary employer registrations.
Step 6: Prepare an LLC operating agreement
Several states, including Maine, legally require single-member and multi-member LLCs to
have an operating agreement.
An operating agreement is a legal document that establishes your LLC’s business structure and internal governance rules all members must follow. The agreement may be oral or in writing. A written agreement is preferable as it holds more value in court.
You can create your own operating agreement using a template or an online tool. Or have a corporate attorney draw one up for your business.
An operating agreement must include the following sections:
- Initial investments
- Profits, losses, and distributions allocations
- Decision-making powers, voting rights, and management
- Transfer of membership interest
- Dissolution of the business
You don’t need to file your LLC’s operating agreement with the Maine SOS office since it’s an internal document. Just make sure it’s filed safely with other important company documents.
Step 7: Open a Maine business bank account
The primary purpose of forming an LLC is to protect your personal assets from any debts or claims associated with the business.
To have this type of LLC protection, you’ll need to open a separate bank account for your company. Mixing personal and business funds can lead to legal and tax problems.
You can get dedicated business banking and credit accounts from:
- Bangor Savings Bank: Free checking for small businesses, no minimum daily balance, 500 free transactions per month, no monthly service charge.
- Bar Harbor Bank & Trust: Easy Business Checking Account—$0 to open; no monthly service charges.
- Machias Savings Bank: Business Checking Account: $500 to open, no service charge, monthly fee, or minimum balance.
Maine LLC taxes, costs, and fees
Like most states, Maine requires you to file an annual report with the SOS. It’s more like a check-in with the state and ensures they have updated information about the LLC owners, location, and registered agent.
The state filing fee is $85 for domestic Maine LLCs, while foreign LLCs pay $150. Late filings attract a penalty of $50.
If you fail to file an LLC annual report, the state can dissolve your company within 60 days.
You may also need to pay various state and business taxes to stay compliant:
- Sales tax: If you plan to sell taxable goods or services, you must file the Application for Tax Registration form with the Maine Revenue Services to obtain a State Sales Tax Number. Registration is free.
- Unemployment insurance tax: If you have employees in Maine, you’ll register for this tax and sign up for Employee Withholding Tax on their behalf.
Maine doesn’t charge franchise taxes. Your company won’t pay federal income tax either. Instead, members will be taxed on their personal income.
Read more about filing taxes for an LLC.
Maine business permits and licenses
To operate your LLC, you must comply with your local, state, and federal government regulations.
For instance, if you run a diner, you’ll likely need building permits, health permits, signage permits, etc.
On a state level, there isn’t a general business license. Instead, towns and cities require one.
The requirements for Maine licenses and permits depend on your business’s location (zoning requirements) and activity, while the costs vary depending on the type of license or permit you’d need.
Also, you may need another “specialist” license if you operate in a regulated industry such as medical, legal, or teaching.
Don’t be surprised if short classes are required to prove your proficiency in providing professional services.
You can apply online with the correct regulatory or licensing agency for your LLC:
- State: Requires a seller’s permit if you intend to sell taxable goods or services in Maine. Plus, certain professions must obtain additional licenses or permits. You can register for a seller’s permit online for free.
- Local: Depending on your business location or activity, you may need other licenses or permits. For instance, the City of Portland requires most LLCs to get a local license.
- Federal: If your LLC conducts activities regulated by the federal government (e.g., firearms or hazardous waste), you’ll need to apply for the relevant business permit or license.
Pros and cons of forming an LLC in Maine
Forming an LLC in Maine can be fun and rewarding, but it can also be a challenging experience. Here’s a quick summary.
Maine LLC pros
- Registering an LLC is relatively inexpensive
- No minimal annual franchise taxes for LLCs
- Attractive business climate
Maine LLC cons
- Higher operating costs for foreign LLC
- Expensive assumed name registration
- General business licenses required in many cities/towns
- The cost of LLC formation in Maine is $175.
- It takes 5-10 business days to form a Maine LLC.
- Trade name registrations are expensive at $145 per name.
- Maine law legally requires LLCs to have an operating agreement, but you don’t need to file it with the state.
- Some cities in Maine require a general business license on top of the operation’s specific permits.
Maine LLC FAQs
Below are some of the most frequently asked questions (FAQs) about forming an LLC in Maine.