Guide to Forming an LLC in Maine

Follow our free guide to form an LLC in Maine

• Pros and Cons of Forming an LLC in Maine

• Starting Your Maine LLC

• Maintaining Your Maine LLC

• Additional Maine Resources

Start your LLC in Maine the right way with Swyft Filings’s Maine LLC guide. We outline the process of forming an LLC in Maine into two simple phases, explaining each section along the way.

Pros and Cons of Forming an LLC in Maine

Pros

Privacy for Owners Maine does not require the LLC members/manager to be listed in the Articles of Organization. An organizer can submit the filing paperwork in place of the actual owners.

No Corporate/Franchise Taxes Maine does not impose any corporate or franchise tax on LLCs. The only taxes owed on the LLC’s revenue is the personal income tax paid by the members.

Cons

Ranked Among Worst States For Businesses According to CNBC, Maine is not one of the most promising sites for new business owners. Among the issues cited, the high cost of living and poor state infrastructure were key contributing factors in Maine’s poor scores.

Complicated and Expensive Corporate Taxes Maryland businesses that bring in more than $25,000 and choose to be taxed as a corporation are levied with a higher-than-average tax rate (from 7.93% to 8.93%) and an additional fee that can run in the thousands.

Cost of Doing Business

• $175 filing fee / $85 annual report

Phase One: Starting Your Maine LLC

Swyft Filings provides a comprehensive guide that will walk you through the process of LLC formation. Start today by following this first set of steps: 

• Step 1: Name your LLC

• Step 2: Establish Ownership of your LLC

• Step 3: Decide on a Registered Agent

• Step 4: File the Certificate of Formation

• Step 5: Create your Operating Agreement

• Step 6: Register for an EIN

Step 1: Name Your Maine LLC

Choosing a name for your Maine LLC is the first big step in creating your business. However, there are state and federal guidelines concerning the use of certain words in business names.

Tip: Use a free business name search tool to ensure your company’s desired name is available.

Business Name Guidelines

• The official name of your business must end with: Limited Liability Company, Limited Company, LLC, or L.L.C.

• Your business name cannot be intentionally misleading to consumers

• The name of your new LLC must not be similar to another organization’s name/trademark

Restrictions

• “Lottery” and “Bank” are ineligible for use (any state)

• Terms that represent educational or Veterans’ organizations are restricted

• Terms related to the Armed Forces or civil servants (police, EMT, fire)

LLC business names associated with government and/or financial entities are not always restricted - it depends on the state. Additional paperwork may be required.

URL Availability Even if you are not conducting business online, having a website for your LLC is still important. Check domain name availability at a number of online web services sites.

Step 2: Establish Ownership

The owners of an LLC are actually considered members and/or managers. All LLCs will have members, but not every LLC has managers —  the difference depends on the management structure of the business.

LLC Management Structures:

• Member-managed: All members participate in operating and making decisions for the LLC

• Manager-managed: An appointed manager oversees the daily operations of the LLC and the members are not actively involved. 

Maine LLC Member Guidelines

Required Number of Members There must be at least one member or manager to form an LLC in Maine.

Member Disclosure Requirements An organizer/authorized representative may sign and file the Certificate of Formation in place of the LLC members.

Age Restrictions LLC members in Maine may be of any age.

Residence Restrictions There are no residency restrictions imposed on LLC members in Maine.

Step 3: Find a Registered Agent in Maine

Selecting a registered agent is a necessary part of all LLCs formed in Maine. Your business cannot be official this position.

What is a registered agent? A registered agent is a party (person or business) responsible for receiving all official government and service of process notices on behalf of the LLC.

Why do you need a registered agent? Your LLC is required by law to have a registered agent so that your business has a consistent contact person.

What are the main requirements for a registered agent?

• The registered agent must have a physical address — not a P.O. Box

• The registered agent must be available during business hours

Who can be a registered agent in Maine?

• A state resident with a physical address in Maine

• An LLC or corporation that is licensed to conduct business in Maine

Can I be my own registered agent for my business? You can be your own registered agent as long as you meet the requirements.

Is being my own registered agent discouraged? Since the registered agent’s name and address are publicly listed, LLC business owners who choose to be their own registered agent risk compromising their personal information.

Tip: Avoid the hassles and choose Swyft Filings to fill the registered agent needs for small businesses in Maine. Find more information here.

Step 4: File the Certificate of Formation

Filing the Certificate of Formation with the Secretary of State is the most important step in creating your Maine LLC.

What is the Certificate of Formation? The Certificate of Formation is a legally binding document that is filed with the state government to officially and legally form your LLC.

Why do I need the Certificate of Formation? Your LLC business in Maine will not be legally recognized by the Secretary of State without filing this document. Consider the Certificate of Formation as part of your LLC’s foundation.

What information is included in the Certificate of Formation?

• The name and address of the LLC

• The name of the organizer filing the paperwork

• The name and location of the registered agent

• The effective date of the LLC

• The LLC designation as low-profit or professional (optional)

Additional Maine Filing Requirements

Maine requires professional service businesses to form an LLC in order to conduct business in the state.

Incorporation required:

• Accountants

• Attorneys

• Physicians and Medical Professionals

Incorporation optional:

• Professional Counselors and Psychologists

• Architects and Engineers

• Veterinarians

• Social Workers

A few points to consider:

• “Limited Liability Company” or “LLC” must be in the name of the business

• All members of the LLC must be licensed in the profession of the business.

• The LLC is only allowed to provide services for which the business was formed.

• The members are still subject to whichever licensing boards govern the LLC’s profession.

Step 5: Create an LLC Operating Agreement

Although not required an Operating Agreement is considered necessary for the successful formation of your Maine LLC.

What is an LLC Operating Agreement? The LLC Operating Agreement is a legally binding document that defines the rights and responsibilities of the LLC’s members and lays out the details of the business’s operating procedures.

Why do I need an LLC Operating Agreement? The LLC Operating Agreement is necessary because it provides structure for the business, protects business assets from creditors, and reduces disputes among members.

Do I need to file the LLC Operating Agreement? You do not need to file the Operating Agreement with the state; it is for the benefit of your LLC and remains in-house.

What goes into an LLC Operating Agreement? While there is not a set rule of what must be included in your LLC Operating Agreement, most documents include the following information:

• List of the members/managers and their roles

• Designation of authority in the LLC

• Initial capital contributions of the members

• Voting designations and percentages of the members

• Member transfer/addition rules and restrictions

• Distribution of profits

• Meeting schedule

Tip: Get a customized LLC Operating Agreement for your small business with Swyft Filings. Add structure to your LLC now.

Step 6: Register for an EIN

Most businesses formed in Maine must register for an EIN; in fact, your LLC will not be able to conduct business without it.

What is an EIN? The EIN stands for Employer Identification Number and is a nine-digit number that the IRS assigns your business for identification purposes. Think of the EIN as a social security number for your LLC.

Are all businesses required to have an EIN? Federal law dictates that certain types of business entities register for an EIN:

• Any business with employees (even if owned by one person)

• Any business with more than one member

• A partnership (LLC or C-corp)

Please Note: A sole proprietorship is not required to have an EIN, but it is still recommended.

Why does my LLC business need an EIN? The more common reasons you would need an EIN are:

• To hire employees

• To open a bank account in the U.S.

• To file your company’s taxes

• To pay independent contractors

In short, if you make money through your business and it has employees, you must have an EIN.

Is the EIN publicly listed? The EIN for your LLC will be part of public record.

Can I use my Social Security Number as the EIN? If you are a sole proprietorship who wants an EIN for your business, you can elect to use your social security number; however, your EIN is part of public record.

Swyft Filings offers EIN services for small businesses in Maine. Find more information here.

Phase Two: Maintaining Your Maine LLC

After completing the initial phase of starting your Maine LLC, you are ready for the next phase of the process that involves getting your LLC ready to operate:

• Step 1: Register for the necessary taxes in Maine

• Step 2: Apply for the required permits and licenses

• Step 3: File the Annual Report for your LLC

• Step 4: Request a Certificate of Good Standing

Step 1: Register for Maine State Taxes

Maine is among the few states that do not charge LLCs a corporate or franchise tax. LLC members are still required to pay state and federal income taxes on their earnings.

Corporate Tax Information You can elect to have your LLC taxed as a corporation; if so, you will be responsible for paying the corporate income tax rate on your business’s income:

Additional Tax Information Other taxes your LLC may need to pay:

• Sales and Use Tax at 5.5%

• Employee Withholding Tax

• Unemployment Tax

Step 2: Obtain Business Licenses and Permits

The licenses and permits required for an LLC in Maine can vary, depending on a number of variables:

• Location (city and county)

• Type of Business

• Industry

Tip: If you would like to see more in-depth information on licenses and permits, please feel free to visit the content in our learning library that covers business licenses and permits.

Step 3: File an Annual Report

All businesses formed in Maine are required to file an annual report with the Secretary of State.

What is an annual report? The annual report is legal documentation that is filed with the Secretary of State on a periodic basis that is designed to keep your business’s information current with the state.

What kind of information is in the annual report? The information requested in the annual report is similar to what was listed in the Certificate of Formation:

• The name and address of the business

• The name and address of the registered agent

• The names of the members

• The business’s EIN

Is the annual report part of public record? The annual report filed on behalf of your LLC is a matter of public record.

Fees and Due Date

Fee: $85 Due Date:  June 1 Implications of Late Filings:  $50 late fee/ dissolution after 65 days delinquent

Swyft Filings helps you stay compliant by providing stress-free solutions. File your annual report with us today.

Step 4: Request a Certificate of Good Standing

Your Maine LLC has been formed and is ready for business — the last step is requesting a Certificate of Good Standing for your business.

What is a Certificate of Good Standing? The Certificate of Good Standing is an official form that shows your LLC be being in proper compliance with all state regulations.

Who issues the Certificate of Good Standing? The Certificate of Good Standing is generally issued by the Secretary of State.

When can I request a Certificate of Good Standing for my business? You can request a Certificate of Good Standing after confirmation of LLC formation.

Why do I need a Certificate of Good Standing? Many businesses and financial institutions want proof that your LLC is in good standing with the state government. Some companies may not even agree to conduct business if your LLC does not have this certification.

Additionally, some states require a Certificate of Good Standing before a business can apply for Foreign Qualification.

Does the Certificate of Good Standing have an expiration date? The Certificate of Good Standing does not expire/does not need to be renewed.

Swyft Filings can create a Certificate of Good Standing for your Maine LLC. Click here for more information.

Additional Maine Resources

• Maine Corporation Guide

• State of Swyft Industry Report