How To Get A Business License In Maine (2024)

A business license is an official document that authorizes a business or individual to carry out a specific activity in a particular geographical area. Business licenses ensure businesses comply with federal, state and local laws. The requirements vary widely by jurisdiction.

Business License vs. Business Permit

Both licenses and permits are legal documents granting a business or individual specific permission. While they are very similar, there are differences between them.

License:

• Grants permission for a specific business, profession or activity
• Has a longer duration with periodic renewals
• Emphasizes ongoing compliance

Permit:

• Allows temporary or conditional use for a specific project or event
• No renewals are usually offered, unless the project or event needs to be extended
• Focuses on compliance with particular regulations during the duration of the project or event

State, local and federal agencies are responsible for issuing licenses. They exist to oversee various aspects of business operations and ensure compliance with specific laws. Different levels of government oversee different types of licensing.

State Licenses

State business licenses are issued through a strict regulatory process to ensure compliance and accountability. States only have the authority to manage businesses operating within their jurisdiction. They use these licenses to monitor and enforce legal and safety standards.

State licenses also serve as a mechanism for revenue collection and consumer protection. Fees collected contribute directly to revenue used to fund essential services in the state. Setting minimum standards for business practices protects consumers against potential harm caused by companies operating unethically and irresponsibly.

Local Licenses

Local licenses differ from state licenses because they apply only to the businesses in that city. Local licenses address community-specific needs, such as zoning restrictions, noise ordinances and health and safety standards. They reflect the diversity of communities within a state while acknowledging particular regulations may be more pertinent at the local level than at a statewide level.

Federal Licenses

The federal government issues business licenses to regulate and oversee commercial activities, ensuring compliance with laws and regulations that foster fair competition, consumer protection and public safety. Business licenses also help the government track economic activities by collecting taxes.

The federal government is limited in what activities it can regulate. Some of the more common business activities that need a federal license are:

• Agriculture
• Sales, serving or distribution of alcohol
• Aircraft
• Firearms, ammunition and explosives
• Wildlife and fish
• Exploration and drilling
• Transportation

Getting a business license can take time and effort. Thus, making sure you have all the necessary documents first can help make the process easier. While the information you need may vary, you typically need the following:

• Business Information:
  • Business name and address
  • Business structure (sole proprietorship, LLC, corporation)
• Owner Information:
  • Personal information for all owners
  • Social Security numbers or employer identification numbers
• Type of Business:
  • Description of the nature of your business activities
• Zoning and Tax Details:
  • Confirmation that your business location complies with local zoning regulations
• Industry-Specific Requirements:
  • Additional documentation or certifications may be required for regulated industries, such as proof of education or technical skills

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.

Business Name

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.

EIN

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.

Professional Licenses

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.

Federal Licenses

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.