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Swyft Filings is committed to providing accurate, reliable information to help you make informed decisions for your business. That's why our content is written and edited by professional editors, writers, and subject matter experts. Learn more about how Swyft Filings works, our editorial team and standards, what our customers think of us, and more on our trust page.
Are you looking to start a business in Maine? The Pine Tree State has one of the lowest sales tax rates in the country and offers fantastic opportunities to entrepreneurs. To help you successfully get your small business up and running, we created a step-by-step guide to forming a Maine business, from idea to incorporation.
Start Operating in Maine: Key Points
Maine offers a beneficial environment for entrepreneurs, with small businesses accounting for 99.3% of all companies in the state.[1]
You can register your Maine small business as a limited liability company, a corporation, or a nonprofit organization.
It’s essential to apply for appropriate business licenses and permits, open a business bank account, and stay on top of your tax deadlines.
Easily start your business and remain compliant with our all-in-one tools, guiding you well past the initial setup with the right support and documents.
Ready to Start a Maine Business?
Setting up a business in Maine doesn’t have to be complicated. You can start operating in Maine in no time. However, gathering the information you need to navigate the incorporation process successfully is essential.
We’re here to help. Learn everything you need to know to become a small business owner in Maine in the sections below.
1. Choose a Business Idea
Every successful business was just an idea at first. Figuring out what you want your business to do is the first step to starting a business in Maine, and it is the most important one. Your business idea defines everything that follows, so spend enough time on this step.
Some entrepreneurs know what they want to do right away. However, it’s normal for your business idea to take time. Here are some things you can do to brainstorm your business idea:
Research Maine’s economy. Your chosen business industry should be in demand. Spend some time investigating what business industries are doing well in Maine. The most prominent sectors include agriculture, outdoor recreation, and clean energy.[2] Here are green business ideas you can start in Maine.
Follow your passions. There’s no better feeling than running a small business that excites you. Assess your interests and skills and brainstorm how to turn them into a successful business. The opportunities are endless.
Consume inspiring content. Whether it’s books or journal articles, reading can help you discover promising business ideas. Here are more everyday places where entrepreneurs can find inspiration.
Choosing the right business idea takes time, and that’s okay. Don’t be afraid to have ambitious dreams. Whether quitting your 9-5 or starting your own business as a recent college grad, Maine offers many opportunities for successful entrepreneurship.
2. Draft a Maine Business Plan
Every new business needs a detailed business plan that articulates how you will bring your business idea to life. There’s no required format that every business plan must follow, but typical sections include the following:
Executive summary: a one-page summary of the most critical parts of your business plan, including your business mission.
Market overview: a detailed analysis of your industry, target audience, and main competitors.
Products and services: an overview of the products and services your startup will sell, including their most important features and benefits.
Company organization: an explanation of how your business will be structured and the primary responsibilities of business owners (if you have a business partner) or employees (if you plan on hiring employees).
Financial plan: revenue and expenses projections and other important financial considerations for your company, such as where your funding comes from.
Marketing plan: an overview of your sales funnel, pricing strategy, and marketing channels.
It’s vital to draft an extensive business plan before you go any further into the business formation process. Operating in Maine without a business plan comes with serious risks, such as unexpected expenses.
→ If you’re looking for additional resources, the Small Business Administration (SBA) has business plan templates that you can use. Maine Small Business Development Centers also have great resources.
3. Select a Business Name
Your business name should be memorable and simple. You have almost complete agency over what you want to name your Maine business. Still, it must be distinguishable from other business names already registered in the state. You can do a Maine business search or use Swyft Filings’ Free Business Name Search tool to determine if your desired business name is in use.
Once you find a business name, reserve it with the Maine Secretary of State for a $20 fee. Name reservation is an excellent option for entrepreneurs considering starting a business in Maine who want their business name to stay available. This is also an ideal time to secure your social media handles and domain names.
4. Choose a Business Structure
There are different types of business structures that you can use for your business. You can operate your Maine business as a sole proprietorship, a limited liability company, a corporation, or a nonprofit. Choosing the proper business structure is crucial because it determines how your business will be taxed and whether you’ll have any personal liability protection.
Sole Proprietorship
A sole proprietorship is the default business structure. If you conduct business activities and don’t have a registered business entity, you’re automatically considered a sole proprietor. Becoming a sole proprietor doesn’t require incorporation and it’s the easiest way to start a business in Maine. It’s also the cheapest, since you won’t need to pay any filing fees.
However, running your business as a sole proprietorship has significant disadvantages. As a sole proprietor, your business assets and liabilities and personal assets and liabilities are the same. If your business faces litigation or has debts, your assets, such as your house or car, will be at risk.
Some sole proprietors decide to file for a DBA (doing business as) to operate their business under an assumed business name instead of their legal name. Most banks require sole proprietors to have a DBA to open a business bank account.
Limited Liability Company (LLC)
A limited liability company is a flexible business structure that protects its owners’ assets. Many entrepreneurs register their small business as an LLC because it allows them to report their business income on their personal income tax return, similar to when you’re a sole proprietor. Learn more about forming a Maine LLC here.
Corporation
A corporation is a robust legal entity that provides its owners — also known as shareholders — with strong liability protection. It’s an excellent option for entrepreneurs who may want to sell their small business one day or want to issue stock.
Corporations are typically more challenging to manage than limited liability companies or sole proprietorships. You’ll need to comply with lengthy requirements for record-keeping and operating procedures. You may also be taxed twice on your corporate income. Still, some startups can qualify for an S corporation tax status to avoid double taxation.
Nonprofit Organization
Suppose your business is advancing a social cause without expecting a financial gain. In that case, you’ll need to form a nonprofit organization. A nonprofit is a particular business structure reserved for businesses like charity organizations, legal aid societies, and public schools. Donations fund nonprofits and may qualify for tax-exempt status.
5. File Business Formation Documents
To officially register your business in Maine, you must file business formation paperwork with the Maine Secretary of State. The exact formation documents you must file depend on your chosen business structure. This is also when you’ll need to pay a filing fee. The fee depends on your business structure as well.
Maine LLC Formation Documents
To form your LLC, you must file a certificate of formation with the Maine Secretary of State and draft an LLC operating agreement. The filing fee is $175.
A certificate of formation is the main LLC formation document. It’s going to ask you for foundational information about your limited liability company, such as your name and your Maine registered agent’s physical address. This document is also sometimes called an article of organization.
An LLC operating agreement is an internal document that outlines your LLC’s rules and standard procedures. Maine law requires all LLCs to have an operating agreement, but you don’t have to file it with the Secretary of State.[3]
Maine Corporation Formation Documents
You’ll need to file the articles of incorporation with the Maine Secretary of State and draft corporate bylaws to form a corporation in Maine. The filing fee is $145.
The articles of incorporation is the principal formation document that officially establishes your corporation with the Secretary of State. It’s essential to fill it out correctly because even the most minor inconsistencies can lead to future difficulties with business formation or tax filing. It’s also sometimes called a certificate of incorporation.
Corporate bylaws establish essential rules and regulations for your corporation. You don’t have to file them with the Maine Secretary of State, but you must draft them and have them in your business.
Form Your LLC or Corporation with Swyft Filings
Navigating through business formation documents can quickly become overwhelming. Swyft Filings can handle the paperwork so you can focus on growing your business. Answer a few questions about your business and form your LLC, corporation, or nonprofit in minutes.
6. Apply for Maine Business Licenses and Permits
Most small businesses must apply for licenses and permits to operate in Maine. You may need to obtain federal, state, or local business licenses for your startup. You must research your startup's business license and permit requirements.
Federal Licenses
The federal government regulates specific business industries, such as alcoholic beverages and logistics. If your business is in one of these regulated industries, you’ll need to get a federal business license. You can check if you need a federal permit on SBA’s website.
State Licenses
Maine doesn’t require a general state license. Still, some businesses may need to obtain a Maine business license depending on the nature of their business activities. The state of Maine regulates various industries and professions, such as dieticians and real estate agents.[4]
Local Licenses
Your city or county may have additional licensing requirements. You may need to obtain a general business license, a zoning permit, or an industry-specific license, depending on where your business is located. Get in touch with your local clerk’s office for more information.
It’s crucial to obtain appropriate licenses and permits after incorporation. Doing business without a business license can result in steep fines or even being forced to close your business. Swyft Filings can research what business license requirements you face at federal, state, and local levels and file your applications with the proper authorities.
7. File and Report Business Taxes
Paying taxes is a part of running a small business, so ensure you’re up to date with important tax deadlines. Tax obligations vary, but you’ll most likely need to pay a federal tax to the IRS, an income tax, and a sales tax if you sell goods. Maine also has a graduated corporate state tax.
Maine imposes a franchise tax on “banks and financial institutions.”[5] As a small business, filing taxes accurately and on time is crucial. Delays and missed deadlines can result in high fines and legal issues for your business.
8. Open a Business Bank Account
Having a dedicated business bank account ensures that your personal assets are protected. Most banks require business owners to have an employer identification number (EIN) to open a business account. It’s a tax identification number that serves as a social security number for your business. It’s also known as a federal employer identification number.
You can apply for an EIN on IRS’s website or use Swyft Filings for a more streamlined experience. Once you open a business bank account, you may consider applying for a credit card to build a credit history.
Take Your First Steps Toward Small Business Ownership
Maine is a great place to turn your exciting business idea into a thriving startup. To start a business in Maine, you’ll have to go through multiple steps, such as drafting a business plan and filing your business formation paperwork with the Secretary of State.
We’re here to help you succeed. Swyft Filings has a streamlined process to help you file for your LLC, corporation, DBA, or nonprofit online and in minutes.
Your Perfect Fit: Whether you're looking at a simple LLC or a dedicated nonprofit, we'll help you identify the best structure for your dream business.
Continued Support: Your entrepreneurial journey doesn’t stop at formation. Our key management services help ensure your business thrives.
Tailored Affordability: Get value-packed options suited to your business needs, starting at just $0 + state fees.
Frequently Asked Questions
Is Maine a good place to start a business?
There are many opportunities for entrepreneurs in Maine. From the high quality of life in cities like Portland and Augusta to a low sales tax rate, there is a lot for small business owners to take advantage of.
How much does it cost to start operating in Maine?
It depends on the nature of your business and your chosen business structure. To form your business, you’ll need to pay a filing fee. You’ll also need to cover fees when you apply for business licenses and permits.
Can I start a business in Maine without a business plan?
Drafting a business plan is an integral part of the business formation process. Starting to operate without a business plan exposes you to costly mistakes and lowers your chances of success.
What does Maine require to start a business?
You must file the appropriate paperwork with the Maine Secretary of State, apply for any required business licenses and permits, and open a business bank account.
What is the process for starting a business in Maine?
Once you finalize your business plan and decide on your business name, you must file business formation paperwork with the Maine Secretary of State. To start operating your business, you must obtain appropriate business licenses and open a business bank account.
Why are most LLCs in Delaware?
Delaware has many pro-business policies, making it a great place to start a small business. For more detailed information on this FAQ, see this article.
Bibliography
U.S. Small Business Administration. “Small Business Profile.” Accessed July 15, 2023.
Maine Office of Business Development. “Key Industries.” Accessed July 15, 2023.
Maine Legislature Maine Revised Statutes. “Title 31: Partnerships and Associations.” Accessed July 15, 2023.
Maine.gov. “Resources by Profession.” Accessed July 15, 2023.
Maine Revenue Services. “Franchise Tax (1120B-ME).” Accessed July 15, 2023.
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