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.
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.
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.
A Maine LLC is created by filing a Certificate of Formation (MLLC-6) with the Maine Secretary of State. The certificate must include:
The articles must be filed by mail. The filing fee is $175.
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.
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.
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.
If you are just starting your business or have already been operating as a sole proprietor, you should consider forming an LLC. LLCs limit an owner's personal liability for business debts and lawsuits and offer a lot of flexibility when it comes to ownership, management, and taxation of the business. To learn more about LLCs and decide if it is the right business structure for you, see What is a Limited Liability Company (LLC)?
It is important to make sure that your LLC's name is distinguishable from the names of other existing businesses on file with the Maine Secretary of State. You can conduct a name search for free on their website to make sure your proposed name is available.
Filing on your own is often the cheapest option, but completing all of the forms and filing them yourself can be complicated. Hiring a lawyer is another option, but will often cost you hundreds, if not thousands, of dollars in the process. Nolo's Online LLC formation service can complete all of the paperwork and filings for you, with packages starting at just $49.00. To learn more about the costs associated with forming and running an LLC, see How Much Does It Cost to Form an LLC?
Maine does not require LLCs to have operating agreements, but it is highly advisable to have one. An operating agreement will help protect your limited liability status, prevent financial and managerial misunderstandings, and ensure that you decide on the rules governing your business instead of state law by default. For more information, see The LLC Operating Agreement.
Depending on its type of business and where it is located, your LLC may need to obtain other local and state business licenses. For local licenses, check with the clerk for the city or town where the LLC's primary place of business is located (or county if it is in an unincorporated area). For state license information, check Maine’s Department of Economic & Community Development online Business Answers service. For more information, see Nolo's article How to Get a Small Business License in Maine.
In some cases, for example if you have employees or will be selling goods and collecting sales tax, you’ll need to register with Maine Revenue Services (MRS). You can register online on the MRS website. For more information on Maine LLC tax registration, check Nolo's article, Maine LLC Annual Filing Requirements.
To do business in Maine, all LLCs organized outside of the state must register with the Maine Secretary of State. Foreign LLCs must appoint a registered agent for service of process physically located in Maine. To register, file a Statement of Foreign Qualification to Conduct Activities (MLLC-12) with the secretary of state. The application is filed by mail. The filing fee is $250.
The completed application must be accompanied by a Certificate of Existence or Good Standing from the foreign LLC’s home state, dated nor more than 90 days prior to the filing of the certificate.
Before filing, make sure the LLC’s name is available in Maine by checking the Maine business name database. If the name is not available, the foreign LLC must adopt a fictitious business name for use in Maine and submit with the application a Statement of Intention to Transact Business Under an Assumed or Fictitious Name (MLLC-5). An additional $40 fee must be paid when filing the statement.
For most formation purposes, a Maine single-member LLC is considered the same as a multi-member LLC. The steps to form a single-member LLC in Maine are the same as those listed above.
Single-member LLCs do have additional flexibility when it comes to filing a tax return. To learn more, see Nolo’s article, How Single-Member LLCs Pay Federal Income Tax.
If you provide a licensed professional service in Maine and want to form an LLC, you will be required to form a professional limited liability company (PLLC). Examples of professional services include architects, attorneys, dentists, certified public accountants, and more. Generally, if you provide a service that requires you to obtain a Maine state license before practicing, then you are a professional service. Under Maine law, LLCs can be formed to provide professional services. However, only one specific type of service may be provided and all the owners of the LLC must be licensed or registered to perform the professional service for which the LLC was organized.
To learn more about forming a Maine PLLC, see our article, How to Form a Professional LLC in Maine.
If you reach the point where it is time to close your business and cease all operations, then you will want to properly dissolve your LLC to limit your liability for lawsuits and government fees. Learn about the steps you will need to take.