How to Start an LLC in Maine
- Why Start a Business in Maine?
- 1. Top Location
- 2. High Quality of Life
- 3. Hiring Capital
- 4. Business Friendly
- Why Should You Start an LLC in Maine?
How to Start an LLC in Maine
- Step 1 – Choose a Name
- Step 2 – Reserve your Business Name
- Step 3 – Find a Registered Agent
- Step 4 – Articles of Organization
- Step 5 – Operating Agreement
- Step 6 – EIN
- How Much is it to Start an LLC in Maine?
- What Are Taxes Like in Maine?
- Final Word: How to Start an LLC in Maine
Maine is one of the best locations to start a new business in the United States. Whether this is a brand-new business or an expansion, you might want to start a business by registering your business as an LLC. There are lots of advantages to this. In this guide, we will discuss how to start an LLC in Maine and why it is important to do it.
Why Start a Business in Maine?
Those that are unfamiliar with Maine, might not realize how great this state is for a new business. Here are some of the top reasons why you must consider Maine as your state for your business.
1. Top Location
The state is within a day’s drive of 90 million potential customers, not to mention the number of businesses that are within the same driving distance. In addition, there are links to international markets through three deep-water harbors and even international airports.
2. High Quality of Life
The state has a culture of work hard, play hard. They believe that those who are working hard should be rewarded with some time to enjoy with their friends, family and complete hobbies. In addition, the state is well-known for being a top location for some of the best beaches, lakes, and skiing locations.
3. Hiring Capital
With lots of educational institutes, Maine is one of the best-educated states in the United States. And that allows brands to find the talent they need to start and run their business, providing a much-needed skill boost.
4. Business Friendly
The tax system within the state is one of the fairest in the USA. There is support that offers tax breaks for those that are investing within the state, such as those who are investing in buildings, equipment, creating jobs, and more. The state’s tax rate is more complicated, but there is the potential for a much lower rate than some of the other nearby states.
Why Should You Start an LLC in Maine?
There are numerous reasons why you’re going to want to start an LLC in the state of Maine. For one, an LLC has unique benefits that can offer owners not just protection, but also a larger share of their profits. At the same time, there are a few downsides to this business model, especially for small to medium enterprises.
Business protection is one of the most obvious reasons why you should start an LLC. As an LLC, the business and person are different entities. Therefore, debts that are accumulated by the business cannot be claimed against the property of the individual. Therefore, any car, house, or other personal property cannot be seized to pay for business debts.
And another protection is for the name. The business name is one of the most valuable assets that a business can have. A good name can determine the success of a business and can help the business owner to cement their branding with ease.
Another benefit of protecting the name is to stop others from using it. Too many times others might try to use the same name. When this is done, the business owner with the protection can get the other business entity to stop using it and perhaps claim compensation for the use of the name.
LLCs also have an easier time gaining access to supplies and financing. For instance, banks are more likely to allow the brand to open a business bank account, with all the associated savings and potential services as an LLC.
In addition, financing can be much easier to get as an LLC. Not only can you be more likely to get your business loan from a business bank approved, but you can also find getting grants easier and investors will be more willing to invest in the business.
That doesn’t mean that you can’t have a good business. With the LLC you will need to have a decent business plan and access to a market that will make you successful, but being an LLC will allow you to get access to this extra money that can help you with cashflow or investments much easier.
The final benefit is that you can benefit from a better tax burden than when you’re a private individual or corporation. This is because your LLC is charged as a person, but you also have the chance to change this to a corporation, depending on the advice of your accountant or financial advisor.
And if you need to compare, here is a table of how Maine compares with some of the nearby states.
|State||LLC Filing Fee||LLC Annual/Biennial Fee||Corporate Tax Rate||Nominal GDP per capita|
|Maine||$175||$85 (every year)||3.50-8.93%||$55,425|
|New Hampshire||$100||$100 (every year)||7.60%||(Not Given)|
|Massachusetts||$500||$500 (every year)||8.00%||$91,129|
|Vermont||$125||$35 (every year)||6.0-8.5%||$56,028|
|US Average||$130.38||$89.34 (every year)||5.60%||$64,773.08|
How to Start an LLC in Maine
Here are the steps that you need to follow if you would like to start an LLC in Maine.
Step 1 – Choose a Name
The first step in the process is to ensure that you’re choosing a name that you would like for your business. The name of the LLC has to follow strict conditions to make sure that it is legal in Maine. For instance, your LLC name must have LLC or Limited Liability Company or something that identifies you as an LLC in the name.
The name should also be unique. There is a Maine business name search that you can do to check that you have a name that has not already been registered. And you can complete domain name searches, Google searches, and social media checks to ensure you have a unique name.
If you’re struggling to come up with a unique name that you’re happy with, try using a business name generator. You can use these free tools for generic business names or specific business names, like for a consulting or training business.
Step 2 – Reserve your Business Name
Once you’ve chosen your business name, start reserving the name with the state. The cost to complete this is just $20. Your business name is then protected for several weeks, which is long enough time to get the rest of the paperwork done for your LLC formation.
You might also want to reserve a DBA name, which is a name that you can trade under, leaving your LLC name as the administrative name.
Step 3 – Find a Registered Agent
Now you are required to find a registered agent in the state. The registered agent is the person or entity that acts on the brand’s behalf, receiving and sending the right business information to the government departments within the state. There are a few rules on who the individual must be. For instance, they must be 18 years or old, be at a registered address in the USA and also be available during normal business hours.
The registered agent can be someone who works for the business or the owner. Or you can hire a company like ZenBusiness and IncFile, that can act as a registered agent in not just Maine, but in other states like California or Hawaii. There is an additional cost because of this, but at the same time, there are significant benefits for your business.
Step 4 – Articles of Organization
Now is the time to register your LLC. You need to submit your Articles of Organization. The cost of this is relatively high, compared with the rest of the United States, at about $175. However, the cost is not the highest in the United States, with Massachusetts costing $500.
Included in the documentation should be:
- LLC name and address
- The registered agent’s details
- Manager-managed or member-managed
- The signature of the organizer
The filing period for the documentation is about two to three weeks.
Step 5 – Operating Agreement
While the paperwork for the Articles of Organization is being processed by the state, you should consider getting your operating agreement completed. This is not a mandatory document, but it is one of the best documents to have, especially if there is more than one person in charge of the business.
The document details how conflict is handled within the business. Who has the final say, who can override decisions and more?
Those looking to invest in the business will want to see this document. At the same time, business banks might need to see this document before allowing you to open a business bank account.
Step 6 – EIN
The next step is to request an EIN for the business. The free number is from the IRS. It can be obtained from the website with ease. There is no fee. The EIN number is essential for those businesses that want to hire staff.
It might also be needed for brands who want to get investment from venture capitalists or open a business bank account.
How Much is it to Start an LLC in Maine?
As with all other states, there are fees for starting an LLC in the state. Maine is relatively expensive for this, with the cost of filing the Articles of Organization being about $175, compared to the US average of just over $100. The registration of the business name is going to be just $25.
What Are Taxes Like in Maine?
Maine has relatively high taxes. The average tax is between 3.5 and 8.5%. However, there are lots of ways that you can reduce your tax burden by investing in buildings, equipment, or talent.
Final Word: How to Start an LLC in Maine
Maine is a great location for starting an LLC. In this article, we’ve discussed some of the benefits and how to start an LLC in Maine. Therefore, you can build a highly successful business and work well.