Are you looking to form a professional limited liability company (PLLC) in Maine, but you’re not sure how the formation process works? There are several important steps when it comes to creating a Maine PLLC that is compliant and able to do business in the state.
What is a Maine Professional LLC?
The professional limited liability company (PLLC) is a specialized type of LLC that is intended for licensed professionals to offer their unique services. A PLLC in Maine is an LLC that’s formed for the purpose of performing a service that requires a license under Maine law, including, among others, professional services provided by accountants, advanced practice registered nurses, attorneys, chiropractors, dentists, optometrists, osteopathic physicians, physicians and surgeons, physician assistants, podiatrists, registered nurses and veterinarians.
The Maine PLLC is typically more popular than a professional corporation (PC) because it’s a more flexible business type, but it still includes the personal asset protection and professional qualifications that make the PSC valuable.
PLLCs in Maine have relatively simple formation and maintenance requirements, several options for how they want to be taxed, and flexible management. From one-person businesses to multi-member PLLCs with several owners, the PLLC is a popular choice for a reason.
An important detail of the PLLC that differs from a traditional LLC is that liability protection is not shared across all members of the company. For example, if you operate a PLLC for physicians, your business structure does not shield each individual member from malpractice suits. Instead, each member is liable for their own malpractice insurance, and no member is liable for another member’s malpractice.
Forming a PLLC in Maine (in 6 Steps)
Step One) Choose a PLLC Name
Your PLLC’s name is often the first impression you get to make on potential customers, and therefore it goes without saying that this is an important step. There are a few different aspects to take into consideration when selecting a name for your business:
In Maine, professional LLCs are subject to the same naming requirements as regular LLCs. That is, the name must contain the words "limited liability company" or "limited company" or the abbreviation "L.L.C.," "LLC," "L.C.," or "LC.” The word "limited" may be abbreviated as "Ltd.," and "company" may be abbreviated as "Co." Though not required, professional LLCs in Maine may also use endings such as "Limited Liability Company, Chartered," "Limited Liability Company, Professional Association," or "Limited Liability Company, P.A."
Another aspect to consider is including language that explains what your business does. For example, if you’re a doctor, put the word “physician” or the initials “MD” in your PLLC name. Additionally, if your business has strong values like being environmentally friendly, you can indicate that by including the word “green.”
Do You Like It?
At the end of the day, this is your business, and you should choose a name that makes you proud. You should also make sure your PLLC name both sounds good when spoken out loud, and looks good when written down.
The most important consideration for naming a PLLC is to not get too attached to any one business name until you know that it is available for use. To confirm whether your chosen name is available, conduct a Corporate Name Search on the Maine Secretary of State’s website. You can reserve a name for up to 120 days by submitting an Application for Reservation of Name to the Secretary of State along with a $20 filing fee.
Step Two) Designate a Registered Agent
Every PLLC in Maine is required to designate a registered agent, which is the individual or business entity that receives government correspondence on behalf of your business, then forwards those documents to you.
Registered agents are also sometimes referred to as “clerks” in Maine. Maine distinguishes between commercial registered agents, which are businesses that have chosen to be listed as “commercial” by the Secretary of State, and non-commercial agents, which provide registered agent services in a non-commercial capacity. Either way, your registered agent must have a physical address in Maine. Any changes in your registered agent must be filed with the Secretary of State within 30 days of the change.
Without a registered agent, you could lose your good standing with the state of Maine, and the state also has the right to dissolve your PLLC if they decide to. In a worst-case scenario, the state could fail to alert you regarding a lawsuit against your company, which could even lead to a judgment against your business because you didn’t defend yourself.
At the end of the day, we recommend hiring a dedicated registered agent service to handle these requirements. Doing so will help eliminate junk mail and more importantly, keep your personal and/or business address off public record.
Step Three) File Formation Documents with the State
Once you are ready to form your Maine professional limited liability company, you will fill out the Certificate of Formation.
This is THE document that will register your PLLC with the state. You’ll want to ensure all of the following information is correct on the form:
- Name of your PLLC
- Filing date or a later effective date
- Checked box indicating your LLC is a PLLC
- Description of the professional services to be provided
- Name and physical address of your PLLC’s registered agent
- Other provisions as decided by the members of the PLLC
- Name(s) and signature(s) of authorized person(s)
Once complete, the Certificate of Formation should be mailed to the Maine Secretary of State’s Division of Corporations along with the filing fee.
Cost to Form a PLLC
The filing fee for a Certificate of Formation in Maine is $175. Expedited processing is available for an additional $50 and immediate processing is available for an additional $100.
The standard processing time for corporate filings in Maine is 5-10 business days. Immediate processing and 24 hour expedited processing are also available for an additional fee. Note that if your filing is incomplete or contains errors, your processing time may be delayed.
Step Four) Create an Operating Agreement
After you register a PLLC in Maine, create a detailed outline that explains how you will run and manage your new business. Even though it doesn’t need to be filed with the state, put one together and keep it for your records.
When you open a bank account, you may be asked for a copy of this document. You’ll also want to keep in mind that any future business partners or managing members may also be interested in seeing your operating agreement before joining your company. After all, this document essentially serves as your overall plan for success.
An attorney can help you outline your operating agreement, or you can create one from a free template online. You can read more about operating agreements here, but some of the basic information you’ll want to have includes:
- Individual members' ownership percentages
- Rights and responsibilities
- Voting powers and meeting guidelines
- Allocation of profits and losses
- Management rules for the PLLC
- Provisions for buying a member owner out, or transferring their shares in the case of illness or death
Step Five) Handle Taxation Requirements
The vast majority of PLLCs require a federal tax ID number, or EIN. An EIN is basically the business version of a social security number, and it’s used for a variety of important PLLC functions.
For instance, you’ll need an EIN if you want to hire any employees, and many banks require them to open business bank accounts as well. You’ll also need one for tax purposes, hence the name federal tax ID number. Get an EIN for your LLC for free through the IRS.
Your professional LLC may be subject to a variety of state-level taxes, depending on how you elect to treat your professional LLC for tax purposes and the exact nature of your business. State-level taxes include, among others, corporate income tax, withholding tax, and sales tax. More information about state business taxes in Maine can be found the Department of Revenue’s website. You can also make online tax payments for your business through Maine’s EZ Pay website.
Depending on where in Maine your business is located, you may also need to pay some local taxes. You should check with your city and county for more information about your tax obligations. The four largest cities in Maine have business resources available on their websites: Portland, Lewiston, Bangor, and South Portland.
Step Six) Obtain Business Licenses and Permits
Maine doesn’t require a state-level general business license. Instead, general business licenses are administered at the local level. You should contact your town office for information on business license requirements and application procedures. If you need contact information for your town office, see the Maine.gov Local Government portal. In addition, given the nature of a professional LLC, you will also likely need to obtain a profession- or industry-specific license. See the Maine.gov website for resources by profession and other information on business licensing in Maine.
Would You Prefer a Professional Form Your PLLC?
If you would prefer to have a professional handle the paperwork for you, consider hiring an online business formation service.
Because of the often-complex nature of professional limited liability companies, some of our favorite service providers don’t offer PLLC formations, but there are still plenty of quality companies that do provide this service. A couple of our favorites for PLLC formation are LegalZoom and MyCorporation.
Another option would be to hire a business attorney to handle your PLLC formation. While this is certainly a more expensive route than using an online formation service, a lawyer’s expertise could come in handy when you’re forming a specialized business structure like this.
Next Steps: What to Do After Creating a PLLC in Maine
Open a business bank account
We highly recommend that you establish a separate business banking account so that your business and personal finances are maintained completely separate. This is important because it helps protect your personal assets and also makes filing taxes much easier. Once you receive your EIN from the IRS, you’ll be able to use it to establish an account at the bank or credit union of your choice.
Almost all employers in Maine are required to obtain workers’ compensation insurance. If your professional LLC will have any employees, you can obtain workers’ compensation insurance either (i) by buying coverage from a licensed producer who sells property and casualty insurance and who specializes in or is familiar with business insurance, or (ii) by self-insuring. See the Employer’s Guide to Workers’ Compensation Insurance in Maine for more information. General information about insurance in Maine can also be found on the Maine Bureau of Insurance website. Though not required, it’s probably also a good idea to pursue general liability insurance, as well as some industry-specific policies pertaining to the profession practiced by your PLLC.
Understand income reporting
Income reporting is just what it sounds like – reporting the income you made from your business. It’s important to note that you must file this form whether you made or lost money over the course of the year.
You will need to determine which form to file in Maine based on how your professional LLC is treated for tax purposes. You can find the income tax form that applies to your business on the Maine Department of Revenue’s website.
Understand annual reporting
In order to maintain good standing status, your professional LLC must file an Annual Report every year by June 1st. You can file your Annual Report on the Maine Secretary of State’s Annual Reports Online website. If you prefer to file by mail, you can also create a preprinted Annual Report form online.
Find an accountant
We don’t recommend that you attempt to manage your business finances without the help of a professional. There is too much room for error, and a professional can ultimately save you time and money by guiding you on how to best manage your business finances. At a minimum, enlist professional help to set you up with software and the steps for keeping up with your finances on a regular basis. Then, consult back with your accountant at least a couple of times per year – and especially at tax time – to ensure you’re keeping track of everything correctly.