Do you want to expand an existing LLC into Maine with a foreign qualification, but you’re not familiar with the process?
This guide will outline important details when expanding your business and explain how to foreign qualify an LLC in Maine.
Your business is growing, and you’re planning an expansion to other states. It’s a good problem to have!
But it’s not quite as simple as choosing another location. Because each state has different rules and requirements for business operations, you may need a “foreign qualification” in each state where you plan to do business.
It’s a common misconception that foreign qualification is only for businesses operating outside the U.S. But in this case, “foreign” refers to any business operating in a state that isn’t the state where the LLC was originally formed.
For example, if your LLC is registered in Vermont and you are looking to open a second location in Maine, you may need to complete a foreign qualification in Maine before you can expand there.
Important Note: If you’d like to save time and have the foreign qualification paperwork taken care of for you, many of the best LLC services can handle this task for you.
Foreign qualifying is essentially asking permission to do business in the state of Maine. And the notion that “it’s easier to ask forgiveness than permission” doesn’t apply here. Failing to foreign qualify before starting a business in Maine yields consequences that are far costlier than registering in the first place. If you fail to foreign qualify, your business:
Essentially, if you’re caught doing business without foreign qualification, your LLC will not only lose its revenue stream, but it could be charged with additional penalties and left without any power to pursue legal action. Those are pretty severe consequences and simply not worth the risk. It’s best not to chance it and foreign qualify as soon as possible.
Interested in what Maine state law has to say on the subject? Check out Section 1629 of the state’s LLC Act.
We’ve established why you shouldn’t do business without a foreign qualification. But what exactly does it mean to “do business” in Maine? The state’s Revised Statutes make reference to “transacting business” and “conducting activities” but don’t explicitly define them. However, we know from other state and tax laws that a company is typically considered to be “doing business” and required to foreign qualify if:
How you’ve set up your LLC will also determine if you’re liable for specific LLC taxes in Maine and if the state knows how to tax you based on your foreign qualification. At first, it might be tempting to dodge taxes by flying under the radar, but this could lead to heftier fines down the road. It’s important to always stay on top of your LLC’s taxation requirements to avoid any unwelcome surprises.
If you’re unsure whether or not you need to file for a foreign qualification in Maine, we suggest seeking legal counsel.
The foreign qualification, however, isn’t a hard and fast rule for all LLCs performing any kind of action in Maine. Certain actions do not qualify as “doing business” and therefore don’t require a foreign qualification. Some examples are:
Cross-check this list with your business activities in Maine and see how they compare. If your only activities appear here, you’re likely exempt from foreign qualifying. To double-check, you can go straight to the source, Maine’s LLC Act, Section 1623. But if you’re harboring any doubts, it’s best to get some legal advice.
Foreign qualification in Maine is simple if you know where to find and send your forms. If you or your legal counsel has decided to foreign qualify your LLC in Maine, you need to get your hands on Form MLLC-12: Statement of Foreign Qualification to Conduct Activities. This is your ticket to doing business in Maine.
Download and complete the form with all the required information. In addition to your completed MLLC-12, you will need to submit:
Once you’ve gathered your materials, package them up and mail them to:
Secretary of State
Division of Corporations, UCC, and Commissions
101 State House Station
Augusta, ME 04333-0101
Or, if you’d like to physically drop them off and happen to live near Augusta, you can hand deliver your documents to the same address.
The $250 fee is payable by check, made out to the “Maine Secretary of State,” or by card, but only if you include a “Credit Card Payment Voucher” with your other documents.
Processing times for foreign qualification applications are usually around 2-3 weeks. But if you’re in a hurry, the Secretary of State’s Office offers two expedited options: 24-hour service for $50 or immediate service for $100.
After your form is in and your fee is paid, sit back, take a deep breath, and pat yourself on the back. Your LLC is on its way to foreign qualification, and you’re embarking on another chapter in the life of your business.
As you’re compiling your business information, requesting your Certificate of Good Standing, and filling out your forms, don’t forget the little details, like making sure that your LLC name is compliant with Maine’s business name requirements. Your LLC name must:
You can also reserve your Maine business name if you’re not quite ready to foreign qualify your LLC.
We think you should foreign qualify your LLC before you begin conducting business in a new state. If you don’t, your business could be subject to a broad range of fines and penalties for operating an LLC in a jurisdiction where you don’t have permission to do so.
You’ll typically need to wait roughly 10-18 business days for the state to process your application, according to the Maine Secretary of State’s website. That site also includes updates to turnaround times in a red box at the top of the screen — if there is no such update at this time, you can assume the typical 10-18 business day turnaround is in effect.
Chances are, you’ll require at least one license or permit to operate your LLC in compliance with Maine state law. For more information about business licenses and more in this state, check out Maine’s convenient Business Licensing webpage.
Yes. Whether you operate a domestic or foreign LLC in this state, you are required to file a Maine LLC Annual Report.
The overall costs of operating a Maine LLC can vary considerably based on the specifics of your business. However, we created a helpful guide to help you identify and plan for every expense your LLC will face in this state.
The answer to this question lies in your personal preferences, but we can give some general pointers. An attorney will cost the most by a mile, but also provides expertise you won’t find with the other options. The DIY route is free of charge but can require quite a bit of legwork and provides no peace of mind that the process is being completed correctly.
Using an LLC service means your business will be foreign qualified by professionals who know what they’re doing, while also costing significantly less than a lawyer. This “best of both worlds” attribute is what makes LLC services our preferred option.
Using an online LLC service removes much of the hassle from the foreign qualification process. With these services, all you need to do is provide them with the name, location, and industry your business operates in, along with some info about yourself and your Maine registered agent.
The service then registers your Statement of Foreign Qualification with the state to qualify your LLC to do business in Maine.
Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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