How to Start a Limited Liability Partnership in Maine | 2024 Guide

Start a Limited Liability Partnership in Maine

A Limited Liability Partnership (LLP) is a popular business structure offering the flexibility of a partnership while providing limited liability protection like starting an LLC in Maine. LLP structure is ideal for attorneys, accountants, and consultants. If you’re considering starting a Limited Liability Partnership in Maine, this comprehensive guide will walk you through the necessary steps, from researching and planning to ongoing compliance and reporting requirements.

Webinarcare Editorial Team will help you gain knowledge through thorough research and market study. Before starting your Maine LLP, all the steps in this article must guide you.

What is a Limited Liability Partnership?

Forming an LLP is like starting an LLC as well. However, there are differences in terms of it. A Limited Liability Partnership (LLP) is a type of business structure that combines elements of partnerships and corporations. It allows multiple individuals, known as partners, to jointly own and manage the business while providing limited liability protection to each partner. This means that each partner’s assets are generally protected from the debts and liabilities of the business, and they are only liable for their investment in the partnership.

LLPs are popular among professional service providers, such as lawyers, accountants, and consultants, as they allow for flexible management structures and profit-sharing arrangements. The partners in an LLP can directly manage the business, unlike forming a Corporation in Maine, where a board of directors typically handles the management.

Each partner’s liability is also limited to the extent of their investment, and they are not personally responsible for the negligence or misconduct of other partners. This is a key difference between an LLP and Maine General Partnership, where partners have unlimited liability for the partnership’s actions and other partners.

It is suggested that you speak with a legal professional before you begin setting up your limited liability partnership. They’ll understand what’s best for you and your company. To safeguard your personal assets from business debts, you can always start an LLC rather than a limited liability partnership.

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Steps in Starting a Limited Liability Partnership in Maine

To form a limited liability partnership in Maine, you must consider following the below guidelines that include research and planning, choosing an LLP name, designating a Resident Agent, filing for Certificate of Formation, drafting a partnership agreement, get an EIN, obtaining necessary licenses and permits, the opening of business bank account and maintain ongoing compliance and reporting requirements. 

Step 1: Research and Planning

Before forming an LLP in Maine, you must familiarize yourself with the state’s laws and regulations governing LLPs. Conduct thorough research to determine if an LLP is the right business structure for your needs, and create a detailed business plan outlining your goals, strategies, and financial projections.

Step 2: Choose an LLP Name

Selecting a unique and appropriate name for your LLP is crucial. First, check the availability of your desired LLP name with the Maine business registry. Ensure that your chosen name follows Maine naming guidelines and requirements, which typically include the use of “Limited Liability Partnership” or “LLP” in the name. You can register and reserve the name with Maine Secretary of State if desired.

Here are some guidelines you must follow while naming your LLP in Maine- 

  • Be distinguishable from other businesses registered in your state
  • Include the words “Limited Liability Partnership,” “LLP,” or a similar abbreviation.
  • Not include words that are restricted by your state
  • Ensure that your chosen name does not infringe on any existing trademarks or intellectual property rights.

However, to check the availability of your desired LLP name, you can also search the Maine Secretary of State business name database and Maine Business Name Search. If the name is available, you may choose to reserve it for a specific period of 120 days by filing a name reservation application and paying the online name reservation fee of Not available and mail name reservation fee of $20. If your LLP plans to operate under a name other than its legal name, you may also need to register a fictitious or “Doing Business As” (DBA) name. 

The DBA filing can be done by two methods, by mail and in person, which costs around $125 for Assumed Name filing and $40 for Fictitious Name filing. In addition, the DBA’s validity in Maine is Indefinite, which you can file in the Maine Secretary of State.

You can check out how to file a DBA in Maine for clearer understanding.

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Step 3: Designate a Resident Agent

In Maine, you’ll need to designate a Resident Agent for your LLP. The Resident Agent is responsible for receiving the partnership’s important legal and tax documents. Choose a qualified individual or Maine Resident Agent Services to serve as your LLP’s Resident Agent, ensuring that they meet Maine requirements.

However, If you plan to become a Resident Agent of your own LLP, follow the steps below. Also, this applies a guideline in hiring your registered agent.

  • Research the requirements in the state where you want to offer your service. Each state has specific criteria, such as having a physical address and being available during normal business hours.
  • Obtain a physical address in the state(s) if needed.
  • Be familiar with the rules, regulations, and compliance requirements for businesses in your state.
  • Create a business plan outlining your services, pricing, and marketing strategy.
  • Register your business entity, such as an LLP, if required.

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Step 4: File a Certificate of Limited Liability Partnership

To officially form your LLP, you must file a Certificate of Limited Liability Partnership with the Maine Secretary of State. Obtain the necessary forms and provide the required information, such as the LLP name, principal office address, registered agent’s name and address, names and addresses of partners, and management structure. Pay the required filing fee and submit the completed forms to the Maine Secretary of State’s office.

Step 5: Draft a Partnership Agreement

A well-crafted partnership agreement is essential for governing your LLP and protecting the interests of its partners. This document should cover crucial provisions such as roles and responsibilities of partners, profit and loss sharing, decision-making processes, partner admission and withdrawal, and dispute resolution. Consider having the partnership agreement reviewed by an attorney to ensure its completeness and compliance with Maine laws.

A partnership agreement should include the following:

  • Business name
  • Description of the business
  • Contact information of the business and its owners

Ownership of all business partners, decision-making, capital contribution, profits and distribution, death and disability, and withdrawal and addition of partners is one of the key factors to consider when forming or creating a partnership agreement. In this way, all business partners will understand what this is all about and how to proceed if the mentioned scenarios happen. 

Without a partnership agreement, your company will often be subject to the general partnership default laws of Maine. The default laws in Maine might not be appropriate for your requirements.

Step 6: Get an EIN

Your LLP must obtain Maine Employer Identification Number (EIN) from the Internal Revenue Service (IRS). The application of an EIN can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN, you can benefit in several ways. It will give your LLP the absolute advantage necessary to operate at full capacity without encountering legal or judicial issues.

Step 7: Obtain the Necessary Licenses and Permits

Depending on your specific industry, you may need to obtain Maine Business Licenses and permits to operate your LLP. Research your business’s licensing and permit requirements and apply for them accordingly.

You can check out the United States Business License & Licensing Fee Resources for more information about the costs in Maine.

Step 8: Open a Business Bank Account and Obtain Insurance

Maintaining clear financial records is crucial for any business, so open a separate bank account for your Maine LLP. Additionally, obtain the necessary Maine Business Insurance, such as general liability insurance, professional liability insurance (if applicable), and workers’ compensation insurance (if you have employees). 

Check the Best Bank for Small Businesses in Maine to open a bank account.

Step 9: Maintain Compliance and Reporting Requirements

Stay informed about and comply with relevant laws and regulations to keep your LLP in good standing. File Annual Reports with the Maine Secretary of State (if required), maintain accurate financial and operational records, and file and pay required taxes at the federal, Maine, and local levels.

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Advantages of Forming a Limited Liability Partnership in Maine

While the specific advantages of forming an LLP in Maine can vary depending on the state’s unique laws and regulations, several public benefits associated with LLPs often apply across jurisdictions. Here are some advantages to consider when forming an LLP in Maine:

  • Limited Liability Protection: One of the main benefits of an LLP is its limited liability protection to its partners. This means that each partner’s assets are generally protected from the debts and liabilities of the business, and they are only liable for their investment in the partnership.
  • Pass-through Taxation: An LLP typically enjoys pass-through taxation, which means that the profits and losses of the business are passed through to the partners, who report them on their personal income tax returns. This avoids the double taxation often associated with corporations.
  • Flexible Management Structure: Unlike corporations requiring a board of directors, LLPs allow for a more flexible management structure. Partners in an LLP can directly manage the business and make decisions without needing a formal board.
  • Profit-sharing Flexibility: The partnership agreement can outline the distribution of profits and losses among partners, allowing for a customized profit-sharing arrangement based on the partners’ preferences and contributions.
  • Easier Formation and Compliance: Forming an LLP is generally less complicated and expensive than forming a corporation. Ongoing compliance requirements may also be less burdensome than other business entities, depending on the specific laws and regulations in Maine.
  • Professional Credibility: Forming an LLP can enhance your business’s professional credibility, as it demonstrates a commitment to a formal business structure and can offer reassurance to clients, customers, and potential investors.

Bear in mind that the advantages of forming an LLP in Maine may vary based on the specific laws and regulations governing LLPs. Researching the applicable laws and consulting with legal or financial advisors is essential to fully understand the benefits and requirements of forming an LLP in Maine.

Cost of Forming an LLP in Maine

The cost of forming an LLP in Maine may vary depending on the required filing fees and any additional services you may need. The filing fee for a Certificate of Limited Liability Partnership typically ranges from $50 to $200, depending on the state.

Can I Form an LLP in Other States?

You can form an LLP (Limited Liability Partnership) in other states. To form an LLP in a different state, you must follow that state’s specific registration requirements and filing procedures. This usually involves filing an application or certificate of registration, paying a registration fee, and obtaining any necessary permits or licenses.

Additionally, you may need to register your LLP as Maine Foreign LLC if you plan to conduct business in multiple states. It is advisable to consult with an attorney or a business consultant familiar with the laws and regulations of the state where you plan to form your LLP.

Can an LLP Need to Have One Owner?

An LLP (Limited Liability Partnership) cannot have just one owner. By definition, an LLP is a partnership, which means it requires at least two partners to be formed. If you want a business structure with limited liability protection and only one owner, you may consider forming a Single-Member LLC in Maine instead. An LLC can have one or more owners, known as members, and offers limited liability protection and pass-through taxation. The requirements for forming an LLC will vary by state, so consult your state’s laws and regulations.

FAQs

What is a limited liability partnership (LLP) in Maine?
A limited liability partnership (LLP) in Maine is a business structure where partners have limited liability for the actions of other partners.
How many partners are required to start a Maine LLP?
Maine requires at least two partners to start an LLP.
Is forming an LLP in Maine expensive?
It usually costs between $100 and $500 to form an LLP in Maine.
How do I register a limited liability partnership in Maine?
You can register your LLP with the Maine Secretary of State by completing the necessary forms and paying the registration fee.
Do I need to appoint a registered agent for my Maine LLP?
Yes, all Maine LLPs must appoint a registered agent to receive important legal and tax documents on behalf of the business.
Can a limited liability partnership have more than one registered agent in Maine?
No, an LLP can only have one registered agent in Maine.
Are Maine LLPs taxed differently from other business structures?
No, Maine LLPs are not taxed differently from other business structures.
Can a Maine LLP have foreign partners?
Yes, Maine LLPs can have foreign partners, as long as they comply with U.S. and Maine business laws and regulations.
How do I dissolve a Maine LLP?
To dissolve a Maine LLP, you must file dissolution paperwork with the Maine Secretary of State.
Do I need to file an annual report for my Maine LLP?
Yes, all Maine LLPs must file an annual report with the Maine Secretary of State.
Can I convert my Maine LLP to another business structure?
Yes, Maine LLPs can be converted to other business structures, such as a sole proprietorship or a corporation.
What are the advantages of starting a Maine LLP?
The main advantage of starting a Maine LLP is that each partner is only liable for his or her own actions and not for the wrongs of other partners.
What are the disadvantages of starting a Maine LLP?
The main disadvantage of starting a Maine LLP is that it can be a complicated business structure, and requires a significant amount of documentation and legal work.
Are there any age restrictions for starting a Maine LLP?
No, there are no age restrictions for starting a Maine LLP.
Can I start a Maine LLP online?
Yes, you can start a Maine LLP online by visiting the Maine Secretary of State’s website.
What types of businesses are best suited for a Maine LLP?
Maine LLPs are best suited for professional service businesses, like law firms, accounting firms, and medical practices.
How long does it take to start a Maine LLP?
It usually takes about a few weeks to start a Maine LLP.
Do I need to publish a notice of formation for my Maine LLP?
No, Maine LLCs do not need to publish a notice of formation.
What is the filing fee for a Maine LLP?
The filing fee for a Maine LLP varies, based on the amount of authorized capital.
Am I required to have a business address to start a Maine LLP?
Yes, you are required to have a physical business address to start a Maine LLP.
Can I operate under a different name than my Maine LLP’s registered name?
Yes, you may operate under a different name than your Maine LLP’s registered name, as long as you comply with Maine’s business laws.
Do I need to obtain any licenses or permits to start a Maine LLP?
Yes, as a Maine LLP owner, you will need to obtain any licenses or permits required by your industry.
How do I change my Maine LLP’s registered agent?
To change your Maine LLP’s registered agent, you must file a certificate of change with the Maine Secretary of State.
Is there a limit on the number of partners allowed for a Maine LLP?
No, there is no limit on the number of partners allowed for a Maine LLP.
Do I need to file a separate tax return for my Maine LLP?
No, Maine LLPs do not need to file a separate tax return.
How can I ensure long-term success for my Maine LLP?
To ensure long-term success for your Maine LLP, hire talented and experienced partners, provide high-quality work and exceptional customer service, and stay up-to-date with local and state business laws.
Can I form a Maine LLP without an attorney?
Yes, it is possible to form a Maine LLP without an attorney, but it is recommended to seek legal counsel.
Do I need to register my LLC in Maine?
Yes, any LLC operating in Maine must register with the Maine Secretary of State.
What are the filing fees for registering an LLC in Maine?
As of 2021, the filing fee for registering an LLC in Maine is $175.
Is a registered agent required for my Maine LLC?
Yes, Maine requires LLCs to have a registered agent with a physical Maine address.
Can I be my own registered agent in Maine?
Yes, an LLC owner can serve as their own registered agent in Maine if they have a Maine address.
What is the annual report filing fee for Maine LLCs?
As of 2021, the annual report filing fee for LLCs in Maine is $85.
How often do I need to file an annual report for my LLC in Maine?
Maine LLCs are required to file an annual report with the Secretary of State once every year by June 1st.
What taxes do LLCs in Maine pay?
LLCs in Maine must pay state income tax at a rate of 5.8% (2021). They may also be subject to self-employment taxes and federal income taxes.
Does Maine honor single-member LLCs?
Yes, Maine recognizes and permits single-member LLCs.
Can LLCs in Maine be owned by non-US citizens?
Yes, non-US citizens can own LLCs in Maine as long as they have a valid Maine address and a valid tax identification number.
Can LLCs in Maine have more than one member?
Yes, LLCs in Maine can have multiple members, including individuals, corporations, and other entities.
Can an LLC be taxed as an S corp in Maine?
Yes, if certain requirements are met, LLCs in Maine can elect to be treated as S corps for tax purposes.
Do Maine LLCs require a business license to operate?
Some Maine LLCs may require a local business license depending on the nature of their business and location.
Can I convert my Maine LLC to a different business entity type later on?
Yes, it is possible to convert an LLC in Maine to a corporation or another entity type later on if desired.
Are there any limits on how many LLCs I can own in Maine?
There are no specific limits on how many LLCs a person can own in Maine.
Is Maine a good state to form an LLC in for tax purposes?
Maine’s tax rates are generally moderate for businesses, but whether it is a “good” state to form an LLC in depends on individual circumstances.
What is the process for dissolving an LLC in Maine?
The process for dissolving an LLC in Maine involves filing Articles of Dissolution with the Secretary of State and addressing any outstanding debts or obligations.
Can I reinstate my Maine LLC if it has been administratively dissolved?
Yes, Maine LLCs can typically be reinstated by filing the necessary paperwork and paying any required fees.
Can out-of-state LLCs operate in Maine without registering?
No, any business operating in Maine must register with the Secretary of State regardless of where it was initially formed.
Is liability protection different for LLCs in Maine compared to other states?
Generally, LLCs provide limited liability protection to their members regardless of the state they are formed in. Maine is no exception.
Can I change my Maine LLC’s registered agent later on?
Yes, LLCs in Maine can change their registered agent at any time by filing a change of agent form with the Secretary of State.
Are there any residency requirements to start an LLC in Maine?
There are no residency requirements for starting an LLC in Maine as long as a registered agent with a Maine address is appointed.
Do LLCs in Maine need to obtain a sales tax permit?
LLCs that sell or lease tangible property or some services in Maine must obtain a sales tax permit from the Maine Revenue Service.
What is the Maine LLC Act?
The Maine LLC Act is state law that governs the creation, operation, and dissolution of LLCs in Maine.
Can LLC owners in Maine act as employees of their LLCs?
Yes, LLC owners in Maine can work for their LLCs as employees and receive salaries and benefits.
What are the names of the LLC forms I need to file in Maine?
There are several LLC forms that must be filed in Maine depending on the specific circumstances of the LLC. These may include a Certificate of Formation, an Annual Report, and Articles of Amendment or Dissolution.
Can Maine LLCs be managed by non-residents?
Yes, Maine LLCs can be managed by non-residents as long as a Maine registered agent is appointed.
Are there any restrictions on LLC ownership in Maine?
Maine generally allows any individual, corporation, LLC, or other entity to own and operate an LLC as long as it complies with the state’s rules and regulations.
Can I operate a business under a different name than my LLC’s name in Maine?
Yes, LLCs in Maine may operate one or more businesses under a different name from their LLC’s name by filing a form known as an application for certificate of existence for alternate name.

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Conclusion

Starting an LLP in Maine may seem daunting, but you can successfully establish and run your business with thorough research, planning, and compliance with legal requirements. Feel free to seek professional assistance from legal or financial advisors when needed to ensure your Limited Liability Partnership’s smooth operation and growth in Maine.

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