Starting LLC in Maine: Peculiarities & Detailed Manual
Want to start an LLC in Maine? It is a profitable decision for a business, as the state has waived corporate tax in favor of gross corporate income tax. So you’ve decided to start an LLC? Not sure how to initiate the process? To start an LLC in Maine, you need to get ready for several stages.
We’ve prepared a guide for you with just six steps to form your LLC and to get success! You can also refer to the virtual LLC formation service.
Note: ZenBusiness is the best service to file the LLC. You’ll surely appreciate reasonable prices, company values, and other peculiarities.
An Maine LLC: The Notion & Essence
Many Maine business owners choose to start an LLC. So, unlike a corporation, they can take advantage of flexible management. We’re talking about the protection of personal assets that sole proprietorships and general partnerships lack.
The state of Maine puts forward simplified requirements for registration and maintenance of LLC and invites business owners to choose the type of taxation. Do you still have doubts about the LLC?
6 Stages to Form an LLC Correctly
Stage №1: Choose Your LLC Name
The LLC name is a significant aspect, as it is the name of your company that makes the first and strongest impression on the audience of your potential customers! The name must be different from existing company names and must meet Maine’s regulatory requirements. Now get started with the following aspects.
LLC name in terms of jurisdiction
The State of Maine obliges business owners to include the abbreviation DDS or the phrase – limited liability company in the name. Please note that the terms corporation or registered are prohibited. In addition, you cannot use the designations of other forms of business: banks or law firms.
Take care of the explanations
You must include in the title an explanation of the nature of your business. For example, if you are engaged in the computers’ repairing, write in the LLC title – computer wizard. If you have any values or principles, also indicate this. For example, if you are farming, use the term natural, nitrate-free, etc.
So, you need to get a little creative and fully comply with Maine’s legal requirements.
Stage №2: Hire a Registered Agent
A registered agent is called a statutory agent in Maine and will help you to start an LLC. The agent can be an Maine resident, natural or legal attorney responsible for sending and receiving legal documentation on behalf of the future company. A company representative can also be an employee of the company or its owner. The State of Maine notifies:
Sends the selected company any information about the ongoing processes or actions. The agent is all this monitored by. Of course, he reports the message from the secretary of state and any other documents sent by government agencies. The agent monitors the receipt of documents and always speaks up-to-date information.
A registered agent guarantees an excellent reputation for your Maine LLC. Also, if your business gets worse, Maine can take legal action against it without notifying you. The registered agent will always receive appropriate notification and will be able to take timely measures to protect your interests as an attorney.
You should apply to the online service to get started a business in compliance with all regulations and requirements. So, you will have the opportunity to filter spam and protect your personal and contact information. If you use the ZenBusiness and Northwest Registered Agent to form an LLC, you will receive the free services of a registered agent.
Stage №3: Applying for Registration
To register a business in Maine, you must file the Articles of Association with the Maine State Secretariat. If you are anxious about your LLC formation, you can submit your documents for pre-processing, which will allow the Secretary of State’s office to advise you of the eligibility. It can be a good option if you get started for the first time in an LLC without consulting an attorney. Be sure to provide:
- The desired name of your business.
- Personal and contact details of the registered agent.
- Business management form.
- Personal and contact details of the manager of your company.
- Signature of the applicant and registered agent.
- Date of application submission.
All information, required for the registration of a limited liability company, must be filled in online or printed as pdf. It doesn’t matter how you fill in the data, because you still have to send it by mail. At this stage of time, you cannot send the form remotely!
The price for registering a company: the state takes $ 175 from the entrepreneur for creating a limited liability organization.
Total processing time for your data: Maine receives documents within 5-10 days, processes all the information received and approves the application for registration of an LLC. If you don’t want to wait that long, you can pay $ 50 to speed up the process. In this case, the processing of your documents will complete in 1-2 days.
Important: do not forget that the processing of your data will begin only when you correctly send all the necessary papers and documents.
Stage №4: The Operating Agreement Background
While an operating agreement is not binding in Maine, creating one could significantly improve the company’s climate. An operating agreement is a document that describes the structure of a project, the way it works, the rights and obligations of each partner.
This document reflects the consistency of partners and thereby reduces the chance of controversy and disputes. Therefore, it is significant that all members of the future LLC carefully read this document before joining the company.
An attorney can help draw up an operating agreement and determine the way income and liabilities will be distributed among the owners of your LLC. You will find more information about the operating agreement here. Prepare to enter the following information:
- Names of all participants.
- The rights and obligations of each of the listed participants.
- Description of procedures for voting or resolving differences between members.
- Regulations on the financial share of participation of LLC members.
- Description of the way you’re going to manage the LLC.
So, do not neglect this stage of LLC formation. It largely guarantees your safety and the observance of your rights by all members of the business project.
Stage №5: Tax Compliance
To conduct a business that you want to register as an LLC successfully, you need to comply with several tax requirements at various levels.
Requirements of Federal Significance
Does your LLC involve multiple owners? Then you need to take care of the EIN! The EIN, or Employer Identification Number, is a unique nine-digit number assigned by the IRS to US corporations. This number must be obtained by all business owners under whose leadership the hired employees work. A business owner can obtain an EIN from the IRS in person or by mail.
Your state’s cess requirements
The states of Maine levy taxes on entrepreneurs for doing business. Their amount depends on the type of business and its profit. Income tax is a mandatory payment for all citizens. If your organization is an individual enterprise or a simple partnership, then you will pay money according to the official document of the taxpayer.
If you created a corporation, then your business will be subject to a flat tax. The tax percentage is composed of 3.5 to 8.93% and depends on the amount of your profit. You can find out more about the tax rate and other useful information here.
Organizations that carry out retail sales are also taxed, but not income tax, but indirect. The state takes 5.5% of the profits from sales, although some entrepreneurs pay tax at a higher rate. Here you can see the files that contain all the information about taxation. You can also file a tax return at this link.
Workers’ community organizations also pay taxes and fees. You, as an employer, deduct a certain amount from the employee’s salary, which you send to the government to pay withholding tax.
You can find useful information about taxation in the FAQs. The state pays citizens unemployment benefits. The money for this activity is taken from the taxes of entrepreneurs. Here you can find information about the fund and mandatory payments.
The state has taxes on various industries. They are imposed on professional industries, for example, for the processing of strawberries, peaches, apples, and so on. Find more information here.
Local Tax Business Demands
Your company can be located in any territory of the state, but you will still be required to pay local taxes. Most often, this is a tax on property paid by both individuals and legal persons.
Check this link to get more information about the tax. Here you can find out the laws and requirements that existing the region where is locating your business. You need to pay taxes and follow all the rules if you don’t want to receive any restrictions and penalties.
Maine is different from other states. At the moment, sales taxes are not taken in this state, since this is prohibited. But this may change soon. A representative of the legislative authority is going to discuss this topic in 2019. Here that you can read more information.
Stage №6: Getting Business Licenses & Permits
Most states have a nationwide business license. But in Maine, this is not so because licenses here controlling locally. If you want to conduct an entrepreneurial business, you need to have a general license. To do this, follow this link, contact people from the government, and submit an application.
For work by some professions need a license. It was issued federal government. This rule applies to professions related to aviation, agriculture, and many others. We recommend that you read the lists of the Small Business Association for federally-regulated industries since they need a license.
The state has requirements for certain branches of the enterprise. For work must have a license. This rule applies to different people: teachers, movers, real estate agents, and so on. Check out the list of licenses by profession. This is need for determining which necessary licenses for employees of your company.
Other Stages for Business Owners After LLC Registration
After completing the six mandatory steps towards starting an LLC, you need to take care of the following.
Opening a business bank account
Separate your personal and LLC accounts. Thus, you will be sure of the safety of your personal and financial data. Besides, you won’t have any hassle when filing your charge returns. Your EIN will help you open a business account quickly, no matter what you choose a bank or credit union.
All owners of companies/corporations, regardless of their form of management that attracts employees, must go through the compensation insurance procedure. All basic and detailed information is available with the Maine Bureau of Workers’ Compensation.
This policy aims to protect the rights of workers who are injured at work and unable to work. It will not be superfluous to get a civil liability insurance policy, as well as pay attention to some other types of insurance.
The income statement is the main report, where written how much the business brought you profit and how you earned money. You should always fill out these reports, even if you have a loss-making enterprise. You can get access to the form, which depends on the type of business, here.
Referring to the services of a qualified accountant
The state always requires that all organizations provide final reports. You can send it here. Your income statement is needed to update the available information.