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Maine LLC
Operating Agreement

An operating agreement is a legal document that governs your Maine LLC. A good operating agreement covers important procedures like voting, transferring membership interest, allocating profits and losses, and—should it ever come to this—dissolution.

Unlike your Maine Certificate of Formation, your operating agreement is an internal document, so you won’t file it with the state. That said, it’s one of the most important internal documents for your LLC to have on hand. For this reason, we at Northwest offer a selection of free, attorney-drafted operating agreement templates you can use to create an operating agreement that works for your business.

Why should a Maine LLC have an operating agreement?

A Maine LLC should have an operating agreement because a company cannot act for itself. In order to operate, LLCs require real humans (and other entities) to carry out company operations.

Also, according to ME Rev Stat 1531 (2019), Maine requires all LLCs to have an operating agreement. But having a good operating agreement is another story—and is essential for several reasons:

1. Your operating agreement proves you own your LLC.

Though your Certificate of Formation is the main document you’ll file to create your LLC, it doesn’t require you to include the names of any members, so it doesn’t always serves as sufficient proof of ownership. But for certain tasks—like opening a bank account or renting property—you will need to show proof of ownership. Fortunately, your operating agreement is a legal document you can use to show you own your company.

2. An operating agreement can help reinforce your limited liability status.

An LLC must be able to prove it is a legal entity—separate from its owners—in order to maintain its limited liability status. One obvious step to show this separation is opening a separate bank account for you business. Another is creating (and following) business policies and procedures and spelling them out in an operating agreement.

3. An operating agreement can help prevent misunderstandings.

Sometimes people just aren’t on the same page. (It happens.) But because an operating agreement is a pre-established document that sets the rules for your company, having it as a reference point can be helpful for mitigating arguments and preventing stalemates.

4. An operating agreement can override Maine’s default laws.

Even though Maine requires all LLCs to have their own operating agreements, anything not covered by your agreement will automatically be dictated by Maine’s LLC statutes. The problem is, Maine’s default laws might not all work for your business. This is why it’s important to create a strong operating agreement that covers all your bases.

Maine Case Law

We asked our lawyers for an example of how an operating agreement can make or break your LLC. Here’s what they said.*

“Consider the case of Bell v Walton, where the failure to actually adopt and maintain an operating agreement led to disputes among the members as to whether a member followed the proper procedure to withdraw as a member of the LLC. Because the members failed to adopt an operating agreement, the courts were forced to look to the statutes to resolve the matter, determining that the proper process was not followed. Such valuable resources could have been preserved had the members of the LLC taken the time to plan ahead, discuss potential pain points, and distill their collective understanding into an operating agreement.”

What is included in a Maine operating agreement?

Your operating agreement is one of the most essential documents for your LLC because it governs important procedures within your company. A strong operating agreement will include information about:

  • Transfer of membership interest
  • Voting rights and decision-making powers
  • Initial contributions
  • Profits, losses, and distributions
  • Management
  • Members’ duties
  • Compensation
  • Bookkeeping procedures
  • Dissolution

Maine LLC Operating Agreement Template

Here are our LLC operating agreement templates. Select the one that best suits your LLC below:

FAQs

Is an operating agreement required in Maine?

Yes. Unlike most states—in which an operating agreement is encouraged but not required—Maine’s statutes clearly state that “a limited liability company agreement must be entered into or otherwise existing” before an LLC can be formed. (A “company agreement” is the same thing as an operating agreement.)

Do I have to file my operating agreement in Maine?

No. Your operating agreement is an internal document, which means you should keep it safely filed with other important documents for your LLC.

Does a single-member LLC need an operating agreement?

Actually, yes. It may seem odd, but even a single-member LLC will need official documentation to show proof of ownership. In this sense, an operating agreement may be necessary for a single-member LLC to open a bank account. Clearly defining processes in an operating agreement also helps define the business as a distinct entity—which can help you maintain limited liability.

*This is informational commentary, not advice. This information is intended strictly for informational purposes and does not constitute legal advice or a substitute for legal counsel. This information is not intended to create, nor does your receipt, viewing, or use of it constitute, an attorney-client relationship. More information is available in our Terms of Service.

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