What is included in an Maine LLC 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:
- Activities of your LLC
- Transfer of membership interest
- Voting rights and decision-making powers
- Initial contributions
- Profits, losses, and distributions
- Management
- Compensation
- Bookkeeping procedures
- Dissolution
What information do I need for Northwest’s free Maine LLC operating agreement?
Want to focus on your business and leave the legal fuss to us? Our lawyers have drafted a comprehensive operating agreement you can use for free. You can even fill it out on this page, save it in a free account for later, and download a completed draft to sign.
In order to fill out our free operating agreement template, you’ll need your:
This must be your business’ legal entity name, or the name you put on your LLC Certificate of Formation.
Did an LLC member contribute $500? $5k? A storefront? Put that here.
You’ll just write in 16 here since our version has a set amount of pages.
Remember, this is an internal document, so you won’t have to submit these names to the state just because they’re on here. However, you might need to add these people to your BOI Report.
Include any initial contributions, even if it’s only a small percentage.
While we recommend having a business bank account, some banks like to actually see the operating agreement before you open the account. If that’s the case, you can leave this blank for now.
This is the place your business operates from.
You can add this in later if you aren’t sure when your meeting will be held.
There are a few spots in our template where you’ll need a signature from one or more members.
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, 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 the names of any members, so it’s not always a good proof of ownership. And when opening a bank account or renting property, among other things, you will need to prove who owns the LLC. 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.
To maintain its limited liability status, an LLC must be able to prove it is a separate legal entity from its owners. One way to show this separation is opening a separate bank account for your business. Another is creating (and following) business policies and procedures defined 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. But if Maine’s default rules for LLCs don’t work for your business, it’s important to create a strong operating agreement explaining where your business and statutes differ (within the limits of the law).
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.”
FAQs
Yes. Unlike most states (where operating agreements are 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.)
No. Your operating agreement is an internal document, which means you should keep it safely filed with other important documents for your LLC.
Yes. It may seem odd, but even a single-member LLC needs documentation to show proof of ownership. That means an operating agreement may be necessary if your single-member LLC needs to open a bank account. Having an operating agreement also helps establish your LLC’s limited liability as an entity distinct from yourself.
*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.