Establishing an LLC in Maine for several types of income streams

[NY2ME]

Jurisdiction

Maine

Hello everyone, and Happy 2023 to all! I have some questions about establishing an LLC in the state of Maine.

I would want the LLC to cover several different income streams I have started to develop. Some of these I have done for many years as a hobby, while the rest are fairly new endeavors. These are:

• Reselling used and new goods online through eBay;
• Mystery shopping, both in-person locally, or by phone and online;
• Creating and self-publishing books for sale through Amazon's Kindle Direct Publishing (KDP); and
• "Gig work" which is basically delivering food and groceries for Instacart and DoorDash.

I consider these to be micro-businesses. I know I could do all of these as a sole proprietor without creating a business entity, but I would prefer to have an established business name, mostly for the first three items on my list above. I also would like to make money by creating and selling artwork, another potential income stream. For that, and for some items I intend to self-publish on Amazon, I would use a "pen name." And who knows, I might find some other kind of income stream and try doing that as well. I like variety.

Would it be possible to establish one LLC that can cover all of these microbusinesses, or do I need separate entities for each? I believe I will need to use a Schedule C for taxes.

I have looked at Maine's page on Corporations and LLCs, at www.maine.gov/sos/cec/corp/llc.html, and that page starts off with a long list of fees—but I am not sure which apply to me and my situation. I would just like some guidance on creating an LLC in Maine, what the costs would likely be, as well as any suggestions if any of you think a different business entity would work better for me.

I believe I would also have to file something with the town in which Iive, but I'm not sure if that's a DBA or something else.

Thanks in advance for any advice, suggestions, ideas, or guidance you can offer!

 

[adjusterjack]

I'm passing this on to a tax/business attorney for comment.

@Tax Counsel

I will, however, touch on the insurance aspect.

You are going to need business insurance for all or most of your activities and if you want your LLC and business names to be included on your auto policy you might end up paying commercial rates.

I suggest you talk to an independent insurance agent who handles commercial and personal lines so that you can get the best combination of both.

 

[NY2ME]

You are going to need business insurance for all or most of your activities and if you want your LLC and business names to be included on your auto policy you might end up paying commercial rates.

I suggest you talk to an independent insurance agent who handles commercial and personal lines so that you can get the best combination of both.

Hmm. Thank you for your reply. I have no employees, operate out of my home, and use my car to transport food (not passengers). What kind of business insurance would I need to research?

 

[adjusterjack]

Let's start with your car. Using your car for mystery shopping and delivering food to derive a income is business use. Personal auto insurance contemplates business use but you have to notify your insurance company and pay the appropriate rates for the coverage. If you conceal the business use and have an accident while driving for your business you could end up having your policy rescinded and coverage disclaimed. Thus leaving you to pay your own legal defense costs, which could run into tens of thousands of dollars. And a judgment for somebody's injury could run into hundreds of thousands.

Moving on now to new or used items you sell online. If somebody gets injured by one of those items you will certainly be named as a defendant in a lawsuit even if you have no liability. Products Liability insurance solves that problem.

If you keep a large inventory of merchandise at your home, your homeowners insurance will be very limited for business merchandise.

You can combine the business liability and the business property on to a BOP (Business Owners Policy). For a small business they are not very expensive.

Finally, we come to writing and publishing. This will potentially expose you to lawsuits for defamation and infringement. There's insurance for that, too.