A Limited Liability Corporation (LLC) is a way a business may be organized legally. That is, a business currently running or about to be started may be organized as an LLC. An LLC is one of the ways you can structure a business, that also allows for the ability to be taxed like a partnership but limits the personal liability of the members.
There are a few basic requirements to form an LLC in Maine, such as:
- Name of the LLC. The name of the LLC must be unique contain the words “LLC” or something like it to make it clear to others that the company is structured as an LLC. Certain words are restricted, such as the word “bank” and require special permission to form. Other words are completely prohibited, like “FBI”. These restriction and prohibitions are to protect the public from mistaking a LLC as a different type of corporation.
- Registered Agent. The LLC must have a registered agent, who is someone that can accept official documents on behalf of the LLC in the State of Maine.
- Operating Agreement. In Maine, an Operating Agreement is required to create a LLC.
- EIN. In order to form a LLC, the LLC must have an EIN (Employer Identification Number). An EIN is used for tax purposes and allows the LLC to hire employees.
Maine requires Articles of Incorporation be filed with the Secretary of State. The State calls it a “Certificate of Formation” and it is available online. It requires information like:|
- Name of the LLC
- Date of filing
- Information about the Registered Agent
As stated earlier, the owner and other members of a Maine LLC will not be held responsible for the actions or debts of the LLC apart from the money they have provided to the LLC. In addition, Maine LLCs do not pay corporate taxes, instead their members and owners pay income taxes on the earnings once distributed.
Also, unlike other states, adding a new member to the LLC is not very difficult in Maine. It requires either a provision for adding a new member in the Operating Agreement or with the consent of all the members.
It also does not terminate a LLC once a member dies, and instead offers the deceased member’s surviving relative to take the member’s position, but only in order to take care of the deceased member’s estate.
While Maine’s policies towards conducting a LLC is very favorable to members, it may give too much power to the other members. While many other states say that if a member is removed or deceased, the LLC will cease to exist, Maine allows members to remove another member from the LLC so long as the other members agree.
This means that if one person is not favored by the other members of the LLC, they may find themselves kicked out of the venture completely. This can make membership in a LLC less stable than other state formed LLCs.
If you are trying to form a LLC and think you need help, then contact a Maine business lawyer to help you navigate the LLC formation process and help you form your LLC to your greatest advantage.