If you own a business that was created in a state other than Maine, you will need to qualify or register that business in Maine if you want to do business there. Here is an overview of the rules on how to qualify your foreign (non-Maine) limited liability company (LLC) to do business in Maine.
For Maine purposes, if your LLC is formed in another state, then it is known as a foreign LLC in Maine. In other words, foreign doesn’t mean from another country. Instead, it means your business was organized under the laws of another state. A domestic LLC, on the other hand, is one that is formed in the state where it is doing business. This is common usage throughout the United States. For example, an LLC formed in Alabama is a foreign LLC in Mississippi.
According to Maine’s LLC Act, you are required to register your foreign company with the state of Maine if you are “transacting business” or “conducting activities” in Maine. (Each of the latter terms is used in different places in the Act.) What does this mean? Well, like most states, Maine’s LLC Act does not specifically define what “transacting business” or “conducting activities” means in relation to foreign registrations.
However, state laws governing when foreign companies must collect state sales tax in their state provide some guidance on the issue. Under these laws, a business must have a physical presence in—or nexus with—the state in order to be required to collect state sales tax on sales to that state’s residents. Generally speaking, physical presence and nexus are synonymous, and mean having:
Certain exceptions may apply and the rules get more complicated with things like Internet sales. Nevertheless, in general, if you have an office, a store, a warehouse, or employees in another state, you will need to qualify your LLC as a foreign company in that state. For more details, including some possible distinctions between physical presence and nexus, check Nolo’s articles on Internet Sales Tax: A 50-State Guide to State Laws.
Like many states, Maine’s LLC Act specifies certain activities that do not constitute transacting business in the state. The items listed include:
For the actual legal description of each of these items, check Section 1623 of the Maine Limited Liability Company Act.
If your LLC’s only activity in Maine is one or more of the listed items, you should not need to register with the state.
To register your foreign business in Maine, you must file a Statement of Foreign Qualification to Conduct Activitieswith the Bureau of Corporations, Elections and Commissions, which is a division within the office of the Maine Secretary of State (SOS). You can download a blank copy of the Statement (Form MLLC-12) from the SOS website.
To complete the form, you must provide more or less the same information that you need to create an LLC in your home state.More specifically, for the Maine Statement of Foreign Qualification, you need to provide:
As noted in the third listed item, you must include a separate application for a fictitious name if your LLC’s name conflicts with the name of another business already registered in Maine. Also, as noted in the next-to-last listed item, you must include a certificate of existence or equivalent document from the secretary of state of the state where you created your LLC. The filing fee is $250.
If your LLC transacts business in Maine without having received foreign qualification from the SOS, it cannot bring a lawsuit in the state to collect debts. Moreover, if your LLC transacts business in Maine without first having qualified to do so, it is liable for penalties. However, not having a valid statement of authority does not invalidate your LLC’s acts (such as making contracts) or prevent the LLC from defending a lawsuit in the state. Also, a member or agent of the LLC is not liable for the debts, obligations, or other liabilities of the company solely because the company conducted activities in Maine without having a statement of foreign qualification on file with the SOS.
If your business is organized as a corporation rather than an LLC, the rules and requirements for foreign qualification in Maine are similar. You will, however, have to use a different application form, FORM MBCA-12Application For Authority To Do Business. See the Maine SOS website for forms, information, and filing instructions for registering a foreign corporation in Maine.