A Maine LLC is formed once the Maine Secretary of State approves the Certificate of Formation. An LLC is a way to legally structure your business. It provides personal liability protection while being flexible and requiring fewer formalities.
Forming an LLC in Maine requires a few formalities to be completed before submitting the Certificate of Formation. That way, you might get smooth sailing towards approval. Some due diligence can make the process way simpler.
So here are steps on how to go about starting an LLC in Maine.
1. Selecting A Name For The Maine LLC
The name you choose for an LLC in Maine should be clearly distinguishable from existing entities. Names that are the same as (or very similar to) existing entities aren’t accepted.
A quick way to check for name availability is to search the Business Name Database made available by the Secretary of State. This should provide a good idea of the name availability.
Selecting A Designator
Every Maine LLC should end its name with a proper designator. This means the company should be clearly identifiable as an LLC. As designators go, LLC is the most common, but the state offers other options too. These are:
- Limited Liability Company
- Limited Company
- LLC
- L.L.C.
- LC
- L.C.
Name Reservation Requests (Optional)
Maine allows a name reservation for your LLC for up to 120 days. This requires filing an Application For Reservation of Name (Form MLLC-1). The form can be filed via mail and has a filing fee of $20.
2. Maine LLC Registered Agent
Each Maine LLC must have a registered agent for service of process. The agent is responsible for receiving legal documents like lawsuits, summons, etc. on behalf of your LLC. Therefore, the agent must have a physical street address in Maine. Adherence to normal business hours is also expected.
A Registered Agent can be any person who is a resident of the state, or a business entity authorized to do business in Maine. The business entities also include commercial registered agents, which are a popular pick for many people.
Maine Department of State website maintains a list of commercial agents in the state.
3. Filing The Certificate Of Formation
Once you have the necessities of LLC name and Registered Agent completed, you can move to file the Certificate of Formation. Maine doesn’t have an online filing system for Certificate of Formation, which is something of a dubious distinction.
The Certificate of Formation is analogous to the Articles of Organization used by several other states. In Maine, once the LLC comes into existence once the Secretary of State approves the Certificate of Formation.
To file the documents, you’ll need to download the Certificate of Formation (Form MLLC-6). Once you’ve filled the form, mail it to the secretary of state along with a $175 filing fee. The fee can be paid using a check or money order. The mailing address for the completed Certificate of Formation is:
Secretary of State
Division of Corporations, UCC and Commissions
101 State House Station
Augusta, ME 04333-0101
Generally, it takes 5-10 business days for the Certificate of Formation to be processed. If you’d like to move faster, the state also offers expedited filing options. These cost extra on top of the $175 filing fee.
Expediting processing to a 24-hour time costs an additional $50. To speed things up for 1-hour approval, you’ll have to add $100 to the filing fee.
4. Operating Agreement
It is highly advisable for every LLC to get an Operating Agreement, even if it is not necessitated by law. An Operating Agreement is an internal document of the company that can often be detailed enough to act as something of a “constitution” for the LLC.
You can use the Operating Agreement to lay down the groundwork for the operation of the LLC. This includes setting procedures, policies, and other relevant work requirements. For multi-member LLCs, the agreement may also show the percentage of the company owned by each member, their roles and responsibilities, dispute resolution, and more.
Additionally, the presence and adherence to an Operating Agreement shows that the LLC is being run properly. It may also reinforce liability protection by showing that the LLC and the members are separate entities.
Every member of the LLC should have a copy of the agreement with them. However, remember that this is an internal document of the LLC and doesn’t need to be filed with any government department.
5. Applying For An EIN or Federal Tax Number
The EIN (Employer Identification Number) is a federal tax ID issued by the IRS. This can come in handy for a lot of purposes (besides taxation). These include opening a separate business bank account for your Maine LLC, getting business credit cards, and more.
Getting an EIN is free. The quickest way to get it is to file with the IRS online. If filing online isn’t possible, you’ll have to download and fill Form SS-4. Once completed, you can file this form via postal mail or fax.
6. Maine LLC Annual Reports
Every LLC in Maine must file an annual report with the Secretary of State. Reports are due every year by June 1, except the year the LLC was formed. For example, if your LLC was formed on March 11, 2021, the first annual report will be due by June 1, 2022.
You can file the annual report online or via mail. To start, you’ll have to download the pre-printed annual report form. You’ll need your Maine LLC charter number to generate the report. Once it’s done, you can download the report and mail it to:
Secretary of State
Division of Corporations, UCC and Commissions
101 State House Station
Augusta, Maine 04333-0101
Filing online is easier and quicker, even though the system feels outdated.
Maine Annual Report filing fee for domestic LLCs is $85. If you’re filing online, you can pay via credit cards. When filing via postal mail, you’ll have to include a check or money order for the said amount.
7. Business Licenses, Permits, And Taxation
The exact details of your business license, permit, and tax obligations will require an understanding of the local, state, and federal laws. As an example, your city/county of operation may have specific requirements for business licenses and/or permits.
Similarly, the industry of your LLC may require licenses or attract taxation based on Maine law. The state has a page on Business Licensing details, which can be very useful for your ME LLC.
Federal taxation depends on how you structure your LLC for taxation. By default, the IRS treats LLCs as pass-through entities. So, your income from the LLC can be a part of your personal tax returns. However, there might be changes if you choose to have your Maine LLC taxed as a C-corp or S-corp.
A good understanding of these requirements and staying compliant will ensure that your Maine LLC continues running smoothly.