Once you have collected the information above, it’s time to apply for a business license. The steps below are essential for applying for a license with Maine, your local city or a federal agency.
Step 1. Set Up a Business Entity
Establishing a formal business entity is the first step. While having a formal entity to get a license might not be mandatory, it’s a smart move. Incorporation provides legal recognition for your enterprise and liability protection by shielding personal assets from business liabilities. Protecting personal assets is essential during legal or financial disputes because it reduces exposure.
The most popular entity to set up is a limited liability company (LLC). Setting up an LLC in Maine requires you to file the Certificate of Formation with the state via the mail. If you are interested in forming a different entity, check out Maine’s Division of Corporations website to learn how to accomplish that.
Regardless of what type of entity you choose to set up, you must select a unique name. Use the Maine Secretary of State’s search tool to ensure your chosen name is available. If you want to reserve the name you have selected before officially registering your business in Maine, file a Name Reservation form, which will reserve your name for 120 days.
Although not mandatory, you may want to check your proposed name with the United States Patent and Trademark Office to make sure it doesn’t infringe upon any already established trademarks.
Another thing that most businesses will need is an Employer Identification Number (EIN). An EIN is a unique nine-digit identifier the IRS assigns. EINs can be used for filing taxes, opening bank accounts and applying for business licenses.
To obtain an EIN, apply directly with the IRS. An easy online application is user-friendly and processes instantaneously. Alternatively, you may apply by filling out Form SS-4 and mailing or faxing it. Both processes are free. Once approved, your EIN can be immediately utilized for various business and tax purposes.
Step 2. Apply for Licenses and Permits
The hardest part about the application process is knowing which licenses you need and where you can apply for them. Maine has tried to help with this burden by implementing a business licensing assistant. This resource with the Department of Economic & Community Development will ask you several questions and provide you with a list of business licenses you need.
Double-check with local cities if any relevant licenses are needed on their level. Maine.gov offers a variety of municipal business licenses. However, only some cities participate in this service. If your city doesn’t participate, you must contact its office directly.
Certain individuals in Maine may be required to obtain a professional license. A common professional license is for healthcare practitioners, such as doctors, nurses and pharmacists. Professionals including lawyers, accountants and engineers also need a professional license from Maine. A complete list can be found online at Maine.gov.
Individuals in such occupations should consult the appropriate regulatory authorities to ensure compliance with Maine’s licensing regulations.
Sales and Use Tax Permits
Maine levies sales tax on sales of goods and certain services. Sellers usually collect sales tax at the point of sale before forwarding it to the appropriate government authorities. Businesses selling goods and services subject to sales tax must obtain a Sales and Use Tax Permit from Maine’s Revenue Services.
The application can be completed online with the Maine Tax Portal. To apply, you will need the following information:
- EIN or Social Security number
- Business legal name
- Physical and mailing address
- Start date of your business
- Contact information for a representative and all officers of the business
In addition, you will need to submit the following supporting documents. Sole proprietorships are exempt from this requirement.
- Articles of Incorporation/Articles of Organization
- EIN Letter from the IRS
A Corporate Income Tax Return with the owner’s information can be used instead of either document.
Most businesses in Maine will not require a federal license, as they are needed only for specific industries. If your business needs a federal license, contact the federal agency directly for details. The U.S. Small Business Administration is an agency that keeps a comprehensive list of all federal business licenses.
Step 3. Maintain Compliance
Maintaining compliance with your Maine business license involves meeting regulatory requirements and adhering to renewal processes on an ongoing basis. Always keep accurate records of business operations, financial transactions, ownership changes or structure adjustments. Regularly review the terms and conditions outlined in your business license to ensure ongoing adherence to local and state regulations.
Be mindful that certain licenses have renewal requirements. Set reminders in advance to submit renewal applications on time. Staying in contact with local authorities and staying abreast of changes to licensing requirements is essential to help maintain compliance. You should also promptly address any citations, inspections or inquiries from regulatory bodies to maintain an impeccable compliance record.