Do you want to form a limited liability company in Maine? We’ll walk you through all of the steps you’ll need to start your business in this post. Let’s start with some background information. Maine is located in the United States’ far northeast. Manufacturing, agriculture, tourism, biotech, electronics, and textiles are important industries. As a result, it is an ideal location for you to develop your LLC.
What is a limited liability company (LLC)?
LLCs are adaptable and have limited liability for their owners, as well as tax benefits. Members may be persons, companies, other LLCs, or foreign organizations, and there is no limit to the number of members. For someone who wants to start their own company, it is the best choice. Let’s look at the steps involved in forming Maine LLC.
Step 1: Determine a name for your limited liability company.
The name you choose for your business will represent its personality and identity. The name you select will be associated with your business. The title should linger in the minds of consumers and entice new ones to visit. The name is significant because it will appear on your business cards, website, bank accounts, and other documents. However, it would be best to name your LLC while keeping some of the specifications in mind. Check to see if it meets Maine’s criteria for a company name:
- The terms limited company or limited liability company, or the abbreviations LLC, LC must appear in the name.
- It should not include abusive, pornographic, or illegal words, nor should it imply government association in any form.
After you’ve followed the rules, double-check that it’s not too close to the names of other companies. You’ll need to make it stand out. However, simply adding punctuation, special characters, posts, or conjunctions do not make it distinctive. You’ll need to modify the keywords a little. Let’s say you want to start a grocery store in Maine. You name it “fresh global market.” However, you discovered that it is in practice. You may replace it with “Fresh marketplace.” The name is identical but distinct, which helps it stand out with the Secretary of State’s documents. Using the Secretary of State’s business name search, you can see whether the name is available or not.
You have the choice of reserving a name until you’ve settled on it. Yes, it is a choice. You can do that if you want to. There might be a reason why your LLC creation is taking longer than expected, and you’re concerned that someone else would take the name before you.
In that scenario, you have ten days to reserve the company’s name. You must send a request for name reservation along with a $20 fee to the following address:
Secretary of State
Division of Corporations, UCC, and Commissions
101 State House Station
Augusta, ME 04333-0101
Step 2: Give your LLC an official business address.
A street address for your LLC in Main should be selected. The address may be any physical street address, your company’s office building, or if you’re doing business from home, your home address.
Step 3: Appoint a Registered agent.
It’s time to start shaping your LLC and appointing a registered officer after selecting your name and address. A registered agent serves as a liaison between the state and the LLC; it is an essential LLC member since the agent manages all relevant and legal documents. The state requires the appointment of an agent for service of process or the registered officer.
The agent handles notices, litigation, fees, and a variety of other things. It makes the owner’s job a little easier to handle all of this. Since the agent is in charge of all correspondence, they should be available during office hours on business days. Choosing a licensed agent, on the other hand, is a breeze. The details about your agent must be included in the Articles of Organization. The registered agent’s information is public, making it simple to contact him or her. Before putting the agent’s name on the Articles of Organization, make sure you have their permission. A person or a business entity may act as an agent.
You can choose any person to be your agent if they are 18 years of age or above and live in Maine. A licensed agent does not need any special training. You can employ friends, relatives, and acquaintances; you can also work as your registered agent. You can hire attorneys or lawyers if you so choose.
The Registered Agent Service is also an option. They complete your work efficiently and take charge of your business needs, including the registered agent. So, you can utilize the registered agent service if you wish so.
Step 4: The Maine Secretary of State requires you to file a Certificate of Formation.
The LLC’s most important document is the Certificate of Formation( Articles of organization). This document establishes the company’s legal status in the eyes of the government. It pushes the formation of LLC into overdrive.
What is the aim of the Certificate of Formation?
It establishes a record with the Secretary of State for your company. It gives your LLC permission to start a business in Maine. The following details should be included in the article:
- name of the company, date on which the Certificate will take effect, and the name and address of the registered agent
- The approved person’s signature
- Mention if the LLC is a non-profit, i.e., whether it has educational or charitable goals.
- If the LLC members provide professional services, such as dentists, registered nurses, lawyers, chiropractors, accountants, and veterinarians, the LLC is considered proficient.
So, if you’re ready to start your business, you’ll need to file the Certificate of Formation. For this, you have to go to the official Secretary of State’s website and fill out the Certificate of Formation form if you want to apply.
The application fee is $175. So, in addition to the form, you must also send a cheque made payable to the Maine Secretary of State. With your file, you can also include a credit card voucher. You can mail it or send it in person after you’ve filled it out completely and carefully to the following address:
Secretary of State
Division of Corporations, UCC, and Commissions
101 State House Station
Augusta, ME 04333-0101
It will take about five to ten working days for your paper to be processed. However, if you believe the wait time is excessive, you can appeal that your process is accelerated. There are two possibilities:
- For $100, you get instant service.
- 24-hour processing service is available for an additional $50 charge
You are authorized to begin the business ventures after your document has been processed successfully and the Certificate of Formation is approved.
Step 5: Draft an Operating Agreement for a Maine Limited Liability Company.
The next crucial step after the corticated of creation is to establish an operating agreement. During times of dispute, this paper comes in handy. The LLC members will use the operating agreement to establish the ground rules for how the company’s internal affairs will be controlled and handled. The records would detail how much each member’s initial contribution was, as well as their positions and responsibilities. Any limited liability company (LLC) in Maine is required to have an operating agreement. It’s fantastic because the operating agreement establishes its legitimacy to the government, courts, banks, and others.
The agreement also safeguards your properties and specifies your LLC’s operating procedures. If there are some disagreements, and one of the members wishes to sell his share but requests sole control, this operating agreement would serve as proof. If a member wishes to depart, the contract specifies how the properties will be allocated. There are numerous other advantages to the operating agreement, including anything from member responsibilities to the tax structure.
You’ve recently become aware of the significance of an operating agreement and have agreed to compose one. If you desire to, you can employ an attorney or prosecutor.
They will draft and evaluate the agreement, guaranteeing that it follows state law and includes all relevant details. You may also record it on your own. Yes, indeed! Don’t be frightened. There are many free online models available for your use. You will establish a functional and efficient operating agreement with their assistance.
Step 6: The Internal Revenue Service will provide you with an EIN (Employer Identification Number).
If you don’t want to go to prison, don’t think of a way to stop paying taxes. It is against the law to dodge paying taxes. The tax structure of an LLC is adjustable. They are pass-through entities, which means they are not required to file corporate income tax returns.
As a result, the tax is passed on to the owners, hence the term. However, this does not exclude the LLC from paying taxes. They are also expected to pay certain taxes, which are dependent on some conditions. You must pay taxes if you sell products, recruit workers, or operate as a partnership or corporation. Certain activities, such as forming a company or association, recruiting staff, or selling goods, enable LLCs to pay federal taxes. If you own a small grocery store and recruit employees, you’ll be required to appeal for an Employer identification number.
In a nutshell, the IRS uses this number to describe the LLC’s tax records. If you file some business tax, you’ll require an EIN. There are three ways to obtain an EIN:
Online is one of the most effective ways to obtain an EIN. You get the number right away. It doesn’t get any better than that! You must complete the procedure between the hours of 7 am to 10 pm Monday to Friday. You will receive your EIN once you have completed your application; you must have a legitimate taxpayer number.
If you choose to use the Fax form, you can do so. It’s the second-fastest method of obtaining your EIN. Your EIN will be received in four working days. To do so, you must first fill out Form SS-4. After that, fax the form to (855) 641-6935.
The third choice is to submit a letter. It takes about four weeks for the application to be processed. If you want to send the mail, you must first download Form SS-4, mail it to the following address:
Internal Revenue Service Operation
Attn: EIN Operation
Cincinnati, OH 45999
This is the final step in the process of forming an LLC. However, it would be preferable if you were well prepared for anything. Few additional steps are there that you must remember. Isn’t it always preferable to be safe than sorry?
Step 7: Submit an annual report.
Maine LLCs are obliged to file an annual report every year. The information includes details about who is in charge of the LLC, how they can contact you, and much more. You must also meet the standards of your state’s tax filing system. Every year, remember to send the periodic online review. You have the option of submitting the details electronically or delivering a hard copy.
The deadline for submissions is June 1st. However, if you fail to send the report by the deadline, your LLC’s good position with the state will be jeopardized. If you keep forgetting to submit the report, you will be administratively dissolved. The report filing costs $85 for domestic LLCs and $150 for international LLCs, so submitting also requires payment. If you’re sending a hard copy, make sure to follow all of the directions in the Certificate of Formation section.
Step 8: Obtain the required business licenses.
Before starting their business, the company needs to get a few business licenses and permits. There are different permits for different programs. This is dependent on the services or goods you provide. A business permit may be required, but these are handled by the local municipality or county government. So, go to the Main.gov local government site to get all the details and instructions. Also, certain operations and practitioners need special state permits or licenses. For example, you’ll need a food and service license as well as a health license before opening a restaurant.
You can look up which certifications you need on the government’s website. Your license requirement is determined by the sector you work in and the location of your company. Don’t try to bypass these licenses; failing to comply with the license and permit requirements will result in fines and penalties, as well as the possibility of being barred from doing business in Maine. City business licenses/tax permits, health permits, warning permits, construction permits, signage permits, liquor licenses, zoning permits, and more are examples of permits and licenses.
Step 8: Taxes
Let’s look at the taxes you’ll have to pay after you’ve obtained the permits and license.
Federal Income Taxes
The tax is not paid directly to the federal government by the LLC. The gains and losses are reported on the owners’ tax returns. You can opt to be taxed as a corporation because of the flexible tax structure; in that case, you must file a corporate tax return.
State and Local Taxes
The same can be said for state taxes. Instead of filing a separate corporate return, the owners record the gains and losses on their tax returns. Furthermore, the LLC in Maine is exempt from paying the franchise tax or the privilege tax.
All other taxes
Other taxes must be paid, depending on the venue, whether or not you have employees, and how the IRS taxes your LLC. Sales and use tax, limited liability entity tax, employer withholding tax, motor vehicle tax, consumer use tax, tobacco tax, and other taxes are among them.
You’ve learned everything there is to know about forming an LLC. However, even after the formation, you must adhere to those guidelines. The work does not stop with the construction of the LLC. You must attend to other matters for your business to run smoothly. What exactly are these items? Let’s take a closer look.
Following the formation of an LLC, there are some critical steps to take.
Separate your personal and business assets.
Do not combine your personal and company accounts. If your LLC is sued or prosecuted, personal assets such as your vehicle, house, savings, and so on would be at risk.
They must be kept apart. How are you going to do it? You can do so by following the steps below:
Create a separate bank account for your business:
If you open a business bank account, your personal and LLC assets will be separated. As a result, your assets will be safe, and tax filing and accounting will be easy.
Obtain a credit card for your company:
You can conveniently split your assets and construct a separate credit history for your LLC if you have a business credit card.
Engage the services of a company accountant:
Please don’t put off hiring an accountant; it’s a necessity for any company.
He or she will help you manage your finances, prevent you from overpaying taxes, and avoid fines and penalties, among other things. You will concentrate on your business’s growth with the assistance of an accountant who can handle your payroll and bookkeeping.
Ascertain that your LLC has insurance
Any company’s foundation is insurance. You are aware that not every organization is risk-free, but knowing that you are covered is reassuring. Your company will be covered if there are any injuries or mishaps.
Make a Website for Your Company
Branding and marketing are critical components of any business’s development, and building a website is just one step in that direction. It makes no difference whether an organization is a small or large business. Everyone wants a website because it attracts potential customers and offers essential information. So, once your LLC is up and running, don’t forget to set up a website. There are several free resources available on the internet to assist you. As a result, it isn’t a concern at all.
Distribute a Press Release
If you want to reach a larger audience with your company, you can issue a press release. It is a cost-effective and effective way to advertise your company because it generates attention. The customer will be directed to your website, which you have created above, by the press release. As you can see, I told you that having a website is essential. It serves as a portal to your business.
Make sure your property is secure.
Since you’re a new company with a newly established LLC, you can recognize your intellectual property and take steps to protect it.
What is intellectual property? How does it work?
It refers to intellectual property such as trademarks, patents, inventions, and copyright. Maybe you’re in a company that doesn’t need patent protection, but you need to protect your copyrights or trademarks. A trademark is a simple to register and inexpensive brand name. You may trademark your product or service with or without the assistance of a lawyer. You must apply to the use of your slogan, name, or other essential marks; you will use the designation after your application has been processed (TM). Pictures, graphics, manuscripts, music and sound recordings, motion pictures, architectural works, and computer programs are protected by copyright. It grants the owner the exclusive right to alter or reproduce the work. You have two options for safeguarding your work: You must file a patent and trademark application with the United States Trademark Office. Then it would be best if you made your staff and independent contractors sign confidentiality agreements prohibiting them from disclosing, stealing, or misusing your copyright works.
Finally, we have concluded. We can say that if you follow all the steps mentioned above thoroughly, you will be running your LLC very soon and achieve tremendous success. So, all the best for your journey.