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Thinking about the money involved in setting up an LLC in Maine? Besides the forms, you also need to think about the costs. The good news is that it might not be as expensive as you think. We specialize in making the different starting and continuing costs of a Maine LLC clear. We can also offer smart tools and services, like Tailor Brands, to help save money wisely.
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What Is the Cost of Forming an LLC in Maine?
To start an LLC in Maine, you need to pay a filing fee of $175. This amount is for sending your LLC’s Certificate of Formation to the Maine Secretary of State, either by mail or in person.
Maine Foreign LLC Formation Costs
If you have an LLC registered in another state and want to do business in Maine, you must register your Limited Liability Company as a foreign entity there.
The cost to form an LLC in Maine for registering a foreign LLC is $250. This involves filing a Statement of Foreign Qualification to Conduct Activities (Form MLLC-12) in Maine.
Annual Cost for LLCs in Maine
When planning to set up an LLC in Maine, understanding the ongoing costs for maintaining it is important, so you can plan for the total expenses. These costs include an Annual Report fee of $85 that needs to be paid to the Secretary of State.
Also, every Maine LLC must have a registered agent, referred to as a “clerk.” You can act as your own agent or hire a commercial agent, which usually costs between $100 and $300 every year.
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How Much Does it Cost to Start an LLC in Maine with the Best LLC Service?
To start an LLC in Maine, the initial fee is $175, but this may vary if you choose extra services. Normally, it takes 4 to 5 weeks to process. For quicker service, there’s a fast track that takes 18 to 19 days for an extra $50 or an even faster option that reduces the time to 15 to 17 days for an additional $100.
- The Tailor Brands Lite LLC plan offers standard processing time LLC creation at just the state filing cost.
- The Essential LLC plan, which adds expedited processing, annual compliance, and an operating agreement to the formation service, costs $199 plus state fees. To keep these services, Tailor Brands asks for a yearly fee of $199.
- The Elite LLC plan, at $249 plus the state fees, includes everything from the Essential plan, plus more business tools like a free domain for a year, a do-it-yourself website and online store builder, eight free logos, a digital business card, tools for business cards, and a social media post maker. There’s an annual $249 fee for continuing these added services.
Additional Costs When Starting an LLC in Maine
Maine LLC Name Costs
Choosing a name for your LLC doesn’t cost anything. When the state approves your Maine LLC Name as part of your Certificate of Formation filing, there are no extra fees.
Despite what you might read online, most states don’t require you to reserve an LLC Name before setting up your LLC. You just put your business name in the Articles of Organization.
If you want to hold onto your selected name for up to a year before you formally set up the LLC, you can fill out Form MLLC-1 and pay a $20 filing fee.
Maine Registered Agent Costs
Setting up an LLC in Maine brings you to the Maine Registered Agent Fee, which can be $0 or up to $125 every year. Maine law requires your LLC to have a Registered Agent.
This agent is responsible for accepting legal documents and state notices for your LLC. They must have a physical address in Maine and be available during standard business hours.
If you or someone you know acts as the Registered Agent, there are no extra fees. But, hiring a professional Registered Agent service costs between $100 to $300 annually. These services offer more than just representation; they help with privacy and provide other business services.
Adding a Registered Agent’s information to your Certificate of Formation does not increase filing fees.
It’s often recommended to use a Registered Agent service if:
- If you need a local address in the state, Maine law requires Registered Agents to have one.
- If you want to keep your personal address private, some services can provide their address instead.
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Maine Operating Agreement Costs
Creating an LLC Operating Agreement in Maine comes at no cost ($0 fee). This agreement is a written contract among the LLC members that details ownership, management, and how profits are divided.
It’s recommended for both Single-Member and Multi-Member LLCs to have an Operating Agreement, keep it with their business records, and give each member a copy. Having a strong Operating Agreement is important, whether the LLC has one or several members.
Often, online services charge between $50 and $200 to draft an LLC Operating Agreement.
Maine EIN Cost
Getting an LLC EIN Number costs nothing ($0 fee). An EIN, also known as a Federal Employer Identification Number (FEIN), is important for filing LLC taxes, opening a bank account for the LLC, and hiring employees if needed.
Although many online services charge fees to get an EIN for your LLC, you can actually get one for free.
You can directly obtain an EIN for your LLC from the Internal Revenue Service (IRS) without any cost. This can be quickly done online in just a few minutes.
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Maine LLC Taxes
The variety of taxes that Maine LLC owners must pay leads to big differences in how much they spend each year. Some of these taxes include:
Federal Income Taxes
Regarding federal income taxes, the IRS provides various treatment options for LLCs.
Single-Member LLC Taxes (Default Status)
The IRS considers single-member LLCs as Disregarded Entities, so they don’t have to file a separate federal income tax return. The owner is responsible for filing and paying taxes. How taxes are handled depends on the type of owner: individual owners pay taxes like Sole Proprietorships, and corporate owners treat the LLC as part of the parent company.
Multi-Member LLC Taxes (Default Status)
LLCs that have more than one owner are automatically taxed as Partnerships by default. These LLCs must file a Partnership Return using Form 1065 and give each owner a Schedule K-1. The Schedule K-1 shows the portion of profits for each owner, which they must include on their personal tax returns using Form 1040.
Husband and Wife LLC Taxes
In some states, a husband and wife who own an LLC together can decide to be taxed either as a Single-Member LLC or a Multi-Member LLC. This choice is possible in community property states, but it is not an option in states such as Maine.
Electing Corporate Taxation
LLCs have the option to be taxed as corporations, which means filling out certain forms with the IRS. There are two kinds of corporate taxation: S-corporation and C-corporation. Choosing S-Corporation status may reduce self-employment taxes for established businesses, but it’s wise to think this over and maybe talk to an accountant first.
- File Form 2553 with the IRS to have an LLC taxed as an S-Corporation, which may cut down on self-employment taxes. This works well for companies making a steady profit above a specific amount.
- To opt for C-Corporation taxation, an LLC must send Form 8832 to the IRS. This choice helps big companies reduce costs on health benefits, though it’s less frequently selected.
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Maine State Income Tax for Maine LLCs
In Maine, how an LLC is taxed varies if owned by one person or multiple people. Owners of single-member LLCs usually don’t file a state tax return for their LLC; instead, they include their LLC’s profits or losses on their personal state tax return.
LLCs with multiple members may have to file a state Partnership tax return, but each owner reports their share of profits or losses on their own state tax returns.
Local Income Tax for Maine LLCs
LLCs and their owners may need to pay local income taxes. It’s a good idea to talk to an accountant and check with the local municipality to understand the exact rules.
Maine Sales Tax
If you sell products to customers in Maine, you may need to collect sales tax, which requires getting a Seller’s Permit from Maine Revenue Services. This permit lets you collect sales tax on retail sales and is sometimes called a resale, wholesale, or sales tax permit/license.
Maine LLC Payroll Taxes
Maine LLCs that have employees need to take care of payroll taxes. This includes withholding federal and state income taxes, Social Security and Medicare taxes, as well as paying federal and state unemployment taxes, among others. It’s important to handle these taxes correctly and in compliance with the law, which might mean needing help from a payroll service or an accountant.
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Maine LLC Cost FAQs
Conclusion
Wrapping it up, when setting up an LLC in Maine, it’s important to look closely at the money involved. Maine offers a supportive and clear setup for businesses, making it attractive for people wanting to start a business.
But, consider all costs like the fees for filing, costs for a registered agent, and getting advice from experts. Using LLC services from companies such as Tailor Brands can make forming your LLC easier.
It’s crucial for people to review all these expenses against Maine’s welcoming business scene, its legal setup, and its reputation. Doing this ensures that the path they choose fits well with their business aims and what they can afford.
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