How to Move an LLC to Maine

There are many reasons why a business owner may want to move an LLC to Maine. This article discusses the use of conversion, known in some states as LLC domestication, to transfer an LLC to Maine.

What is Maine LLC Conversion?

A Maine conversion is a statutory transaction that can turn an out-of-state LLC into a Maine LLC or turn a Maine LLC into an out-of-state LLC.¹ An out-of-state LLC that completes a Maine LLC conversion changes its official home state—called its state of organization or its domicile—to Maine. After completing the process, the company is governed by the Maine Limited Liability Company Act and is considered a Maine LLC.²

Some states that have a legal process that transfers an LLC to a new state call it domestication. Most of those states use the name conversion for the process that changes a business entity into a new entity form—for example, an LLC converting into a corporation.

Maine has one LLC conversion procedure that serves both functions by allowing a business entity that is not a Maine LLC to convert into a Maine LLC.³ Any of the following entities could potentially convert into a Maine LLC using Maine’s LLC conversion process:

• An out-of-state LLC;
• A Maine corporation; or
• An out-of-state corporation.

This article explores the procedure, requirements, and legal effects of a conversion that changes and out-of-state LLC into a Maine LLC.

Why Transfer an LLC to Maine?

Transferring a business is often a chief concern of an LLC owner who moves to a new state. Maine’s LLC conversion process is a streamlined method of transferring an out-of-state business to Maine. The list below describes some of the more common reasons a business owner might want to transfer an LLC to Maine, but there are certainly others.

• Convenience. A business owner moving to Maine may find it more convenient to have an LLC that is governed by Maine law. An LLC owner who lives where the company is domiciled can focus on one state’s law—which can simplify legal issues and aid communications with state agencies.
• Professional networking. An LLC owner who needs to hire an accountant, lawyer, or other professional for the business needs someone familiar with the right state’s law. An owner who lives in Maine will have a relatively easy time finding local professionals who know Maine law. Working with local professionals may also allow for long-term professional relationships and networking opportunities.
• Reduced reporting. An LLC typically must file annual reports in its domicile state and in states where it has authority to do business as an out-of-state LLC. A Maine LLC conversion may reduce reporting requirements for a business that mostly operates in Maine—particularly if the LLC will not do business in the original state. Limiting reporting obligations can save a business owner time and money.
• Tax savings. A business must have enough of a connection with a state—called a taxable nexus—for the state to have the legal authority to tax the business. A converting LLC’s original state may lose its power to tax the company if a Maine LLC conversion severs the LLC’s connection with the original state. This can result in a lower total tax bill for the LLC if it reduces the number of states where it must pay taxes.
• Legal environment. While Maine is typically low on lists of the best states for doing business, Maine law may nonetheless offer advantages over an LLC’s current state. For example, Maine gives members substantial freedom to expand, restrict, or eliminate members’ fiduciary duties and to limit members’ potential liability to the LLC and the other members.⁴ An LLC may also want to transfer to Maine if the owners want to branch out into a business that the current state does not permit for LLCs.⁵

What are the Benefits of Maine LLC Conversion?

Maine’s LLC conversion process is the most straightforward and cost-effective way for most out-of-state LLCs to legally transfer to Maine. Conversion’s benefits compared to alternate methods include:

• The business’s day-to-day operations continue. There is no need for a business’s ordinary operations to cease during a conversion into Maine. Business offices can stay open, and the company can carry on income-earning activities. Employees remain employed by the same company—with no break in the employment relationship and no need to release employees.
• The company’s identity stays the same. An LLC that converts into Maine is still the same company and keeps its legal identity.⁶ It can keep using the same Employer Identification Number (EIN) and continues its taxpayer history—reducing paperwork and the risk of administrative confusion.
• The same company owns the same assets. An LLC that converts to Maine still owns the same property—with no need for transfers.⁷ Financial accounts can stay open, so the LLC has no need to close bank accounts or open new ones.
• The LLC’s contracts stay in place. A converting LLC’s business contracts are still valid and enforceable after it converts into Maine. The LLC retains all contractual rights, duties, and obligations, so negotiating and signing new agreements is unnecessary.
• The LLC is not dissolved in the original state. Some approaches to transferring a business into a new state require dissolution in the original state. The Maine LLC conversion process does not involve dissolution and avoids winding up and distribution of assets.⁸ The LLC can register as a foreign LLC in the original state if it intends to keep doing business there.

What LLCs Can Convert to Maine LLCs?

Conversion into a Maine LLC is not an option for every out-of-state LLC. An LLC can convert into a new state only if both states allow conversions. Thus, an out-of-state LLC’s current state must allow LLC conversions, or the company cannot convert into Maine.⁹ The current state may use a different name for the process—such as domestication. But if the current state has no statutory procedure for transferring an LLC into a new state, then the LLC cannot convert into Maine.

Out-of-state LLCs considering conversion into Maine should also confirm that the business they do is lawful for Maine LLCs. A Maine LLC generally can have any lawful purpose, but some special types of Maine LLCs are subject to extra requirements.¹⁰

Maine PLLCs

A Maine professional limited liability company (PLLC) is an LLC formed for the purpose of providing professional service to the public.¹¹ A professional service is a service provided by professionals who must have a license in Maine—such as accountants, attorneys, physicians and surgeons, and veterinarians.¹²

Maine PLLCs are governed by the Maine LLC Act and also by the Maine Professional Service Corporation Act.¹³ Among other requirements, a Maine PLLC’s certificate of formation must note the professional service the company renders, and the PLLC must provide that service only through licensed individuals.¹⁴

A converting LLC that will be a Maine PLLC must ensure that its conversion documents include all necessary information, that members and employees have the required licenses, and that the company can meet all other legal requirements for Maine PLLCs.

Maine Low-Profit LLCs

Another special type of LLC that Maine recognizes is called a low-profit limited liability company. A Maine low-profit LLC must:

• Identify itself as a low-profit PLLC;
• Exist to accomplish one or more charitable or educational purposes; and
• Not have a purpose that is political or legislative or directed toward income generation or asset appreciation.¹⁵

An out-of-state LLC planning to convert into a Maine low-profit PLLC must be able to meet all of Maine’s legal requirements. It must also carefully prepare its conversion documents to contain the information Maine requires for low-profit LLCs.

How Much Does Maine LLC Conversion Cost?

An out-of-state LLC that completes a Maine conversion will need to pay conversion costs consisting of labor costs, filing fees, and commercial registered agent fees (if applicable).

Labor Costs

Converting LLCs typically hire a service provider to assist with preparing conversion documents and/or managing other aspects of the process. Service providers charge a fee for their work—which may be a flat rate or an hourly amount. The work the service provider does typically includes:

• Obtaining and organizing the information needed for the conversion;
• Reviewing legal authority (if necessary) and drafting conversion documents;
• Communicating with the LLC’s members or managers and with state offices; and
• Filing the conversion documents.

Service-provider fees vary by provider and based on the extent of the work the LLC requests.

Filing Fees

The Maine Secretary of State’s Division of Corporations charges filing fees for conversion documents filed in Maine. The current state’s equivalent office will also have filing fees for conversion documents filed in that state. Maine’s fee is $175.00—which covers the statement of conversion, certificate of formation, and the contact form that accompanies filed documents.

The current state’s fee depends on the state from which the LLC is converting. Fees are typically (but not always) lower for LLCs converting into a state than for LLCs converting out of the state.

Registered Agent Fees

Every Maine LLC must appoint a registered agent with the legal power to accept service of process, official notices, and demands.¹⁶ A Maine LLC’s registered agent must have an actual street address physically located in Maine.¹⁷ An LLC may list a position with the company as its registered agent, along with a business address in Maine for the person who holds the position.¹⁸

An LLC without a Maine address can hire a commercial registered agent to serve as its registered agent.¹⁹ A commercial registered agent accepts an annual fee in return for serving as a business’s registered agent. Commercial registered agents also provide a long-term, consistent point of contact for important communications. The annual fee is relatively low—typically around $100.00-$150.00—so hiring a commercial registered agent often makes sense even for an LLC that has a Maine address.

How Long Does Maine LLC Conversion Take?

The Maine LLC conversion process generally takes less time than other methods of moving an out-of-state business to Maine. A conversion’s total timeframe will vary based on how long the parties take to complete each step. Factors that determine the time needed for a conversion include:

• How long the members or managers take to get the information needed for the conversion documents to the document preparer;
• How long the document preparer takes to review the information and draft the conversion documents;
• How long the members and managers take to review the draft conversion documents, request any revisions (if needed), and sign the documents;
• How long the document drafter or other responsible person takes to file the conversion documents with the Maine Secretary of State’s Bureau of Corporations and current state’s equivalent agency; and
• How long the state agencies take to process the conversion documents.

The Maine Bureau of Corporations estimates that, due to backlogs, ordinary filings may take up to 40–45 business days to process. Filers can request expedited processing for an additional fee and when office staffing is sufficient.²⁰ The fee for 24-hour service is $50.00, and the fee for immediate service is $100.00. Expedited service requests can be made for in-person filing or mail filings. For mail filings, the processing period runs from the date of actual receipt.

What Laws Govern Maine LLC Conversion?

An out-of-state LLC converting to Maine must follow the conversion procedure and requirements of both Maine and the LLC’s current state. The company must satisfy every requirement of either state’s conversion law. If both states address an aspect of the conversion process, the converting LLC needs to abide by both states’ rules.

For example, both states must authorize LLC conversions, and the LLC’s plan of conversion must contain every item in Maine’s list and every item in the current state’s list.²¹

An individual state’s rules control some parts of the conversion process—including:

• Conversion approval. The LLC’s current state defines the approval standard for adopting the conversion as the act of the LLC.²²
• Current state filing requirements. The current state’s conversion law describes the requirements for conversion documents filed in the current state.
• Maine filing requirements. Maine’s conversion law describes the requirements for conversion documents filed in Maine.²³
• Effective date. The effective date for a conversion to Maine is determined using Maine law.²⁴ Maine’s rule is that a conversion takes effect when the certificate of formation takes effect—which is either at the time of filing or on a delayed effective date listed in the document.²⁶

What is the Maine LLC Conversion Process?

The Maine LLC conversion process consists of two components: document preparation and administrative tasks.

Document Preparation

Maine’s LLC conversion procedure requires preparation of several documents that describe the conversion and set forth the terms of the transfer.

• Plan of Conversion. A Plan of Conversion that is designed to comply with the requirements of both Maine law and the law of the state that the LLC is moving from.
• Maine Statement of Conversion. The Maine Statement of Conversion with all information and any related documents needed for filing with the Maine Secretary of State’s Division of Corporations.
• Conversion Document for Filing in Prior State. Depending on state law, this document may be called articles of domestication, statement of domestication, articles of conversion, certificate of conversion, statement of conversion, certificate of conversion, or a similar term.²⁷
• Maine Certificate of Formation. The Maine Certificate of Formation for filing with the Maine Secretary of State’s Division of Corporations.
• Maine Limited Liability Company Agreement. A state-specific Limited Liability Company Agreement to properly structure the LLC as a Maine LLC, provide rules for profit distributions and decision-making, clarify the federal income tax classification, and help provide maximum liability protection.
• Resolution Authorizing Conversion. A resolution approving the transaction and adopting the Maine organizational documents as the LLC’s governing documents.

Administrative Tasks

An out-of-state LLC that is ready to carry out its conversion to Maine must complete the administrative tasks described below to make the conversion effective.

• Conduct preliminary name search. Check the official records of Maine Secretary of State’s Division of Corporations to determine whether the LLC’s name is available in Maine. (If the name is unavailable, a slight name change may be required to complete the conversion.)
• Obtain signatures on the Statement of Conversion. The Statement of Conversion must be signed by the required parties. The Maine Secretary of State’s Division of Corporations requires a manual (wet) signature on the Statement of Conversion (no e-signing).
• Obtain signatures on the Certificate of Formation. The Certificate of Formation must be signed by the required parties. The Maine Secretary of State’s Division of Corporations requires a manual (wet) signature on the Statement of Conversion (no e-signing).
• File the Statement of Conversion. File the Statement of Conversion with the Maine Secretary of State’s Division of Corporations. The Division of Corporations requires the Statement of Conversion to be filed by mail or in person (no e-filing).
• File the Certificate of Formation. File the Certificate of Formation with the Maine Secretary of State’s Division of Corporations. The Division of Corporations requires the Statement of Conversion to be filed by mail or in person (no e-filing).
• File conversion documents with prior state. File the conversion documents with the Secretary of State or equivalent agency for the state that the LLC is moving from.

What is the Legal Effect of Maine LLC Conversion?

A converting LLC’s certificate of formation becomes effective when it is filed or on a delayed effective date up to 90 days later.²⁸ When the certificate of formation takes effect, the conversion to Maine is complete and has the following legal effects:

• Company existence. The converted LLC is for all purposes the same company as before the conversion.²⁹ The Maine LLC continues the out-of-state LLC’s existence, and the company is still considered to have the same initial date of formation.³⁰
• Company property. Property that the out-of-state LLC owned remains vested in the Maine LLC.³¹ The conversion is not treated as a transfer to the Maine LLC. The same company keeps all its same property interests and rights.³²
• Company liabilities. All debts, liabilities, and other obligations that the out-of-state LLC owed continue as the Maine LLC’s debts, liabilities, and obligations.³³
• Legal actions. Legal cases and proceedings that involve the LLC move forward as though conversion had not occurred.³⁴ If the LLC’s name changes during the conversion to Maine, the new name may be substituted for the former name.
• Business contracts. The out-of-state LLC’s contractual relationships are not disrupted by the conversion. Agreements are still valid and enforceable, and the company has the same contractual rights and duties.³⁵
• Company ownership. When the conversion is complete, ownership interests in the out-of-state LLC convert under the terms the members agreed in the plan of conversion.³⁶ Members typically choose to convert their interests in the out-of-state LLC into interests in the Maine LLC—keeping the same percentages and voting rights. Members can also agree to convert interests into cash, property, or other consideration—or a combination.
• No dissolution. A Maine LLC conversion is not considered a dissolution of the out-of-state LLC. There is no need for the LLC to wind up affairs, pay liabilities, or distribute assets unless the members agree otherwise.³⁷

1. 31 Maine Stat. §§ 1645(1)(A)-(C).
2. 31 Maine Stat. §§ 1501, et. seq.
3. 31 Maine Stat. § 1645(1).
4. 31 Maine Stat. § 1521(3).
5. See 31 Maine Stat. § 1504(2).
6. 31 Maine Stat. § 1648(1).
7. 31 Maine Stat. § 1648(2)(A).
8. 31 Maine Stat. § 1648(2)(F).
9. 31 Maine Stat. § 1645(1).
10. 31 Maine Stat. § 1504(2).
11. 13 Maine Stat. § 723(5).
12. 13 Maine Stat. § 723(7).
13. 13 Maine Stat. §§ 721, et. seq.
14. 13 Maine Stat. § 731; 734.
15. 31 Maine Stat. § 1611.
16. 31 Maine Stat. § 1661; 5 Maine Stat. § 113(1).
17. 5 Maine Stat. § 104.
18. 5 Maine Stat. § 105(1).
19. See 5 Maine Stat. § 106(1).
20. 31 Maine Stat. § 1669.
21. 31 Maine Stat. § 1645(1).
22. 31 Maine Stat. § 1647(1)(B).
23. See 31 Maine Stat. § 1647(1)(B).
24. 31 Maine Stat. § 1647(2)(A).
26. 31 Maine Stat. §§ 1531(2); 1674. /efn_note].
27. Legal effects of conversion. The legal effects of an LLC conversion to Maine are governed by Maine law.²⁵31 Maine Stat. § 1648.
28. Fourteen states use the term articles of domestication to refer to the document that must be filed with the state to approve the domestication: Iowa, Massachusetts, Minnesota, Nebraska, New Hampshire, New Jersey, North Dakota, South Dakota, Utah, Vermont, Virginia, Wisconsin, Wyoming, and Indiana. The corresponding document may be called a statement of domestication (Alaska, Arizona, Connecticut, Idaho, Illinois, Mississippi, and Pennsylvania); articles of conversion (Florida, Nevada, North Carolina, Oregon, and Washington) or certificate of conversion (California, Delaware, Georgia, Michigan, Ohio, and Texas). It may also be called a statement of conversion (Colorado, Maine), certificate of domestication (Kansas), request for conversion (Louisiana), or statement/plan of domestication (District of Columbia).
29. 31 Maine Stat. §§ 1531(2); 1674.
30. 31 Maine Stat. § 1648(1).
31. 31 Maine Stat. § 1648(2)(F) and (H).
32. 31 Maine Stat. § 1648(2)(A).
33. 31 Maine Stat. § 1648(2)(G).
34. 31 Maine Stat. § 1648(2)(B).
35. 31 Maine Stat. § 1648(2)(C).
36. 31 Maine Stat. §§ 1648(2)(A)-(C).
37. 31 Maine Stat. § 1645(2).
38. 31 Maine Stat. § 1648(2)(F).