A limited liability company (LLC for short) is a way to legally structure a business. It combines the limited liability of a corporation with the flexibility and lack of formalities provided by a partnership or sole proprietorship. Any business owner who seeks to limit his or her personal liability for business debts and lawsuits should consider forming an LLC.

Here are the steps you need to take to form an LLC in Maine. For more information on how to form an LLC in any state, see How to Form an LLC.

1. Choose a Name for Your LLC

Under Maine law, an LLC name must one of the following: "limited liability company" or "limited company," or the abbreviation "L.L.C.," "LLC," "L.C.," or "LC"; or, in the case of a low-profit limited liability company, "L3C" or l3c."

Your LLC's name must be distinguishable from the names of other business entities already on file with the Maine Secretary of State. Names may be checked for availability by searching the Maine Secretary of State's business name database. You may reserve a name for up to 120 days by filing an Application for Reservation of Name (MLLC-1) with the Secretary of State. The reservation must be filed by mail. The filing fee is $20.

2. Appoint a Registered Agent

Every Maine LLC must have an agent for service of process in the state. This is an individual or business entity that agrees to accept legal papers on the LLC's behalf if it is sued. A registered agent may be (1) an individual who resides in Maine, or (2) a business entity authorized to do business in Maine. The registered agent must have a physical street address in Maine. A list of Maine commercial registered agents can be found on the Maine Department of State website.

3. File a Certificate of Formation

A Maine LLC is created by filing a Certificate of Formation (MLLC-6) with the Maine Secretary of State. The certificate must include:

• the LLC's name
• the date the Certificate should become effective (upon filing or a later date)
• whether the LLC is a low-profit LLC (formed to accomplish charitable or educational purposes)
• whether the LLC is a professional LLC (this is so if members perform professional services; including accountants, attorneys, chiropractors, dentists, registered nurses, and veterinarians)
• the name and address of the LLC's registered agent, and
• signature of authorized person.

The articles must be filed by mail. The filing fee is $175.

4. Prepare an Operating Agreement

An LLC operating agreement is not required in Maine, but is highly advisable. This is an internal document that establishes how your LLC will be run. It sets out the rights and responsibilities of the members and managers, including how the LLC will be managed. It can also help preserve your limited liability by showing that your LLC is truly a separate business entity. In the absence of an operating agreement, state LLC law will govern how your LLC operates.

5. Obtain an EIN

If your LLC has more than one member, it must obtain its own IRS Employer Identification Number (EIN), even if it has no employees. If you form a one-member LLC, you must obtain an EIN for it only if it will have employees or you elect to have it taxed as a corporation instead of a sole proprietorship (disregarded entity). You may obtain an EIN by completing an online application on the IRS website. There is no filing fee.

6. File Annual Reports

All LLCs doing business in Maine must file an Annual Report with the Maine Secretary of State every year by June 1. You can obtain a preprinted annual report form from the Secretary of State's website; you'll need your LLC's state charter number to access the online form. The report may be filed online, or by mail. The filing fee is $85 for domestic LLCs, $150 for foreign LLCs. For more information on Maine LLC annual reports, see Nolo's article, Maine LLC Annual Filing Requirements.