What Is a Maine LLC Operating Agreement?
A Maine LLC operating agreement allows LLC members to create custom rules for how their LLC will operate. It lets them set the rules they want, so they don’t have to default to the procedures under state law (Title 31, Chapter 21: Limited Liability Companies). With this flexibility, LLC members can conduct business however they want to, within certain limits.
An operating agreement in Maine outlines ownership rights, management structure, and operational procedures. For example, 31 ME Rev Stat § 1556 sets a member-managed structure by default. However, if you prefer a manager-managed structure, you can establish this in your operating agreement.
Whether your LLC is operated by a sole member (single-member LLC) or several members (multi-member LLC), you can benefit from writing a Maine operating agreement.
Is an LLC Operating Agreement in Maine Required?
Yes. Maine is one of the few states that require an LLC to have an operating agreement (officially called a “company agreement”) on file (31 ME Rev. Stat. § 1531). LLC members must enter into a company agreement, or one must already exist. If not already entered, it can be entered before, after, or at the time of filing a certificate of formation.
Unlike the certificate of formation, the company agreement remains a private, internal document. It shows that your LLC is separate from its owners, protecting personal assets. It also prevents disputes by outlining:
- How the members or managers make decisions
- How the LLC distributes its assets
- What happens when a member exits the LLC
Some institutions may request to see your operating agreement before they allow your LLC to engage in certain actions. For example, this document may be required before you can open a business bank account, acquire a professional license, or secure a loan.
What Are the Main Components of a Maine LLC Operating Agreement?
A Maine LLC operating agreement contains essential details about your LLC and its operations. Here are the key components you must include in your document:
- Company name
- Principal address of business
- Member ownership percentages
- Capital contributions
- Voting rights
- Profit/loss distribution
- Management structure (member vs. manager-managed)
- Buy-sell provisions
- Dissolution procedures
Legal Considerations for a Maine Operating Agreement
As you write your Maine LLC operating agreement, you must be aware of certain limitations and rules. Here are a few key points to keep in mind:
- You cannot limit certain fiduciary duties. While state law lets you limit some fiduciary duties, you may not use an operating agreement to eliminate the implied contractual covenant of good faith and fair dealing (31 ME Rev Stat § 1522(2)).
- You can control how profits and losses are shared. By default, Maine law dictates that profits and losses are shared based on the value of each member’s initial contributions (31 ME Rev Stat § 1554). If you prefer these to be shared based on an equal split, you can note this preference in your Maine LLC operating agreement.
- You can control how LLC records are requested. Members have a right to inspect and copy certain LLC records (31 ME Rev Stat § 1558), but your operating agreement can dictate how they may do it. However, it may not deny access to essential financial records.
Sample Maine LLC Operating Agreement
View an example of our Maine LLC operating agreement so you can see how to customize it with your desired terms for voting rights, profit distribution, and more. Fill out yours using Legal Templates’s guided form, then download it in PDF or Word format.
