Start Your Own Business in Maine: Seven Steps You Need to Take

From licenses and permits to taxes and insurance, learn what you need to do to start a business in Maine.



Here’s an overview of the key steps you’ll need to take to start your own business in Maine.

Step 1. Decide on a Legal Structure

The most common legal structures for a small business are:

  • sole proprietorship
  • partnership
  • limited liability company (LLC), and
  • corporation.

There also are special versions of some of these structures, such as limited partnerships and S corporations. You’ll want to consider which business entity structure offers the type of liability protection you want and the best tax, financing, and financial benefits for you and your business. Check  Choose Your Business Structure  on Nolo’s website for more information on how to choose the best ownership structure for your business.

Step 2. Choose a Name

For LLCs and corporations, you will need to check that your name is distinguishable from the names of other business entities already on file with the Maine Secretary of State (SOS). Names can be checked for availability by searching the Maine SOS  corporate name search. You can reserve an available name for 120 days by filing anApplication for Reservation of Name  with the Maine SOS. There are also certain name requirements for LLCs and corporations (like including a word such as “LLC” for LLCs or “Company” for corporations). See  How to Form an LLC in Maine  and  How to Form a Corporation in Maine  for more information.

If you plan on doing business online, you may want to register your business name as a domain name. See  Choose and Register a Domain Name  for more information. In addition, to avoid trademark infringement issues, you should do a federal and state trademark check to make sure the name you want to use is not the same as or too similar to a name already in use. See  How to Do a Trademark Search  for more information.

Step 3. Create Your Business Entity

  • Sole proprietorship:  To establish a sole proprietorship in Maine, you don’t need to file any documents. For more information, see  How to Establish a Sole Proprietorship in Maine.
  • Partnership:  To create a general partnership in Maine, you don’t need to file any organizational documents with the state. Although not legally required, all partnerships should have a written partnership agreement . The partnership agreement can be very helpful if there is ever a dispute among the partners. For more information, see  How to Form a Partnership in Maine.  To form a  limited liability partnership  (often used by professionals), you must file a Certificate of Limited Liability Partnership with the Maine SOS. For more information, see  How to Form a Limited Liability Partnership in Maine.
  • LLCs:  To create an LLC in Maine, you must file a  certificate of formation  with the Maine SOS. You will also need to appoint a  registered agent  in Maine for service of process. Although not required by law, you should prepare an  operating agreement  to establish the basic rules about how your LLC will operate. The operating agreement is not filed with the state. For more information, see  How to Form an LLC in Maine  and  How to Form a Professional LLC in Maine  (for professionals).
  • Corporations:  To create a corporation in Maine, you must file  articles of incorporation  with the Maine SOS. You will also need to appoint a  registered agent  in Maine for service of process. Although not legally required, you should prepare  bylaws  to establish your corporation’s internal operating rules. Bylaws are not filed with the state.  S Corporations  must also file IRS Form 2553,  Election by a Small Business Corporation,with the IRS. For more information, see  How to Form a Corporation in Maine.

Step 4. Licenses and Permits

Tax Registration.  If you will be selling goods in Maine, you must register your business with Maine Revenue Services (MRS). If you will have employees in Maine, you must register with MRS and the Maine Department of Labor (DOL). For both kinds of registration, you can use the MRS/DOL  application for tax registration.

EIN.  If your business has employees or is taxed separately from you, you must obtain a federal Employer Identification Number (EIN) from the IRS. Even if you are not required to obtain an EIN, there are often business reasons for doing so. Banks often require an EIN to open an account in the business’s name and other companies you do business with may require an EIN to process payments. You can get an EIN by completing an online application on the IRS website. There is no filing fee.

Regulatory licenses and permits.  These cover areas such as:

  • health and safety
  • the environment
  • building and construction; and
  • specific industries or services.

General licenses needed to operate a business are handled at the town or city level. You should contact the town or city office where your business is located for more information. You can find contact information for a particular town office through the  Maine.gov Local Government portal.

Professional and occupational licenses. These cover people who work in various fields. You can find a list of state-issued professional and occupational licenses at the  Resources by Profession  section of Maine.gov.

Step 5. Business Location and Zoning

You’ll need to pick a location for your business and check local zoning regulations. That includes if you work from home. You may be able to find zoning regulations for your town or city by checking  municode.com.

Step 6. Taxes and Reporting

Maine taxes every kind of business. See  Maine State Business Income Tax  for more information on state business taxes in Maine.

Sole proprietorships.  Pay state taxes on business income as part of their personal state income tax returns (Form 1040ME).

Partnerships.  Partners pay state taxes on partnership income on personal tax returns. If your partnership has non-Maine partners, you must also file  Form 941P-ME  for the partnership.

LLCs.  Members pay state taxes on their share of LLC income on personal tax returns. In addition, the LLC itself must file an annual report and pay an $85 filing fee. See  Maine LLC Annual Report and Tax Requirements  for more information.

Corporations.  Shareholders must pay states taxes on their dividends from the corporation. A shareholder-employee with a salary also must pay state income tax on his or her personal state tax return. Moreover, the corporation itself is subject to Maine  corporation taxes. And, finally, corporations must file an  annual report  and pay an annual filing fee of $85.

If you have employees, you must also deal with  employer taxes.

And, apart from Maine taxes, there are always federal income and employer taxes. Check IRS Publications 334,Tax Guide for Small Business, and 583,  Taxpayers Starting a Business, available at irs.gov.

Step 7. Insurance

Insurance is a good idea for most kinds of business. While insurance often is regulated at the state level, the types of business insurance available are usually similar across the fifty states. Check  Obtaining Business Insurance  for more information.

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