Why a Maine LLC Agreement Is Not Optional
Most of this series has to argue that an operating agreement is worth having. Maine does not require the argument. The Maine Limited Liability Company Act sits at Title 31, chapter 21 of the Maine Revised Statutes, sections 1501 through 1693, and 31 M.R.S. § 1531(1) lists what it takes to form a company. Paragraph A covers the certificate of formation. Paragraph C requires one or more members. Paragraph B says, in full, that a limited liability company agreement must be entered into or otherwise existing, and that it may be entered into before, after or at the time the certificate of formation is filed.
Maine also uses its own vocabulary. The document is a limited liability company agreement throughout the statute, not an operating agreement. The two terms mean the same thing in practice, and if you search the Maine code for the phrase everyone else uses, you will not find the section that matters.
The requirement carries no filing and no fee. The Secretary of State, through its Division of Corporations, UCC and Commissions, receives the certificate of formation and the annual report due June 1. It does not receive the agreement, has no form for it and charges nothing for it. Section 1531 requires the agreement to exist; nobody at the state will ever ask to see it. That combination is exactly why so many Maine companies are technically out of step with their own formation statute.
What the Act supplies where the agreement is silent
Section 1521 sets the relationship: the limited liability company agreement governs relations among the members as members and between the members and the company, and the statutory provisions apply only to the extent the agreement does not otherwise provide. Section 1556 puts the activities and affairs of the company under the direction and oversight of its members, lets a majority decide ordinary matters, and requires the consent of all members to approve a merger or conversion, to amend the agreement, and to undertake an act outside the ordinary course of the company's activities.
Section 1554 allocates distributions made before dissolution on the basis of the agreed value, as stated in any written records of the company, of the contributions made by each person. Maine is therefore a contribution-value state rather than an equal-shares state, and the formula depends on written records existing. Section 1553 reinforces the point from another direction: a promise by a member to make a contribution is not enforceable unless it is in a writing signed by the member.
A single member still has an agreement to make
Section 1531(1)(B) does not exempt one-member companies. A sole owner in Maine still needs an agreement to exist, which in practice means a signed document between the owner and the company covering management, capital, distributions and what happens on death or incapacity.
The commercial reasons are the same as everywhere. A Portland or Bangor bank asks for the agreement at account opening because nothing else names the authorized signer. A lender wants to know who can pledge company assets. A buyer treats a missing agreement as an unpriced risk. Maine simply adds a statutory reason on top. Background sits in the single-member LLC guide and the Maine single-member LLC page.
The Title 31 Defaults Your Agreement Displaces
| Question | Maine answer where the agreement is silent | Section |
|---|---|---|
| Who directs the company | The members, with a majority deciding ordinary matters | 31 M.R.S. § 1556 |
| Amendments and unusual acts | Consent of all members | 31 M.R.S. § 1556(3) |
| Distributions | By agreed contribution value in the written records | 31 M.R.S. § 1554 |
| Leaving or dying | Dissociation, with no payment on account of it | 31 M.R.S. §§ 1582, 1583 |
| Personal creditor | Charging order only, and it cannot be foreclosed | 31 M.R.S. § 1573 |
| Who may bind the company | Optionally settled by a filed statement of authority | 31 M.R.S. § 1542 |
Three things every Maine member controls
Section 1556(3) reserves to the whole membership the approval of a merger or conversion, the amendment of the limited liability company agreement, and any act outside the ordinary course of the company's activities. The third of those is broad. Buying a building, borrowing against the business or selling a division all plausibly sit outside the ordinary course, and each of them therefore needs the last member's signature unless the agreement says otherwise.
Dissociation pays nothing at all
Section 1582(6) dissociates a member who dies, becomes subject to a guardian or conservator, or is judicially determined to be incapable of performing the duties of a member. Section 1583 then sets out what dissociation produces: the person has no right on account of the dissociation to any payment from the company, has no participation rights, remains bound by obligations incurred before dissociation, and is entitled only to receive the distributions to which the member would have been entitled had the member not dissociated.
Read that together with section 1554 and the position is clear. A Maine member who leaves keeps their economic share of future distributions, indefinitely, and is owed nothing for giving it up. Section 1574 gives the personal representative of a deceased member defined powers, but no buyer. The only thing that ends the relationship cleanly is a buyout clause the members wrote.
The statement of authority Maine will file
Section 1542 allows a Maine LLC to file a statement of authority, which is the public counterpart to the authority clause inside the agreement. Where the company owns Maine real estate or where a bank or counterparty needs certainty about who signs, having both is worth the effort. It also keeps the internal document and the public record consistent, along with the registered agent details.
What Belongs in a Maine LLC Agreement
Maine LLC agreement at a glance
| Item | Position in Maine |
|---|---|
| Required by state law | Yes, under 31 M.R.S. § 1531(1)(B) |
| Format | No writing requirement, but several powers belong to a written agreement |
| Filed with the Secretary of State | No, and no fee, because there is no filing |
| Governing act | Maine Limited Liability Company Act, 31 M.R.S. sections 1501 to 1693 |
| File.Business drafting | $99 flat |
Ten provisions turn a statutory obligation into a useful document.
1. Members, interests and the written record of both
Name each member and state interests. Section 1554 reads the agreed value of contributions from written records, so those records have to exist and agree with the document.
2. Contributions and signed commitments
Section 1553 makes a promise to contribute unenforceable unless it is in a writing signed by the member. Capture commitments properly or they are not commitments.
3. Direction, oversight and any manager
Section 1556 puts direction and oversight with the members. If a manager will run the company, define the role, its authority and how it ends.
4. Thresholds and the outside-the-ordinary-course problem
Decide what counts as outside the ordinary course and set the vote for it, instead of leaving a broad unanimity requirement in place.
5. Allocations and distribution timing
If the intended split is not contribution value, write it. Add a reserve and a tax distribution sized to each member's pass-through liability.
6. Transfers of the transferable interest
Sections 1571 and 1572 separate the economic interest from membership. Set who may transfer, on what notice, and what admits a transferee as a member.
7. A buyout, because section 1583 supplies none
Fix the valuation method, the notice, the payment period and any funding, so a departure or a death ends the relationship rather than freezing it.
8. Dissolution triggers and the payment order
Section 1595 dissolves on an event stated in the agreement, unanimous consent, ninety memberless days or a court order. Add your own triggers and a waterfall. Maine dissolution covers the filing side.
9. Federal classification and who controls it
Record the classification and the consent needed to change it. The IRS rules for LLCs follow the election, not the Maine filing.
10. Amendment mechanics and deadlock
Amending the agreement needs every member under section 1556(3). Set a workable threshold and a deadlock mechanism before you need either.
Form your LLC
If you would rather not do this yourself, we prepare the articles, check name availability with the state, and file it for you. Or keep reading and file it on your own. This guide covers everything you need either way.
The Charging Order That Cannot Be Foreclosed
Maine has one of the strongest creditor provisions in the country and very few people outside the state know it. Section 1573 lets a court charge a judgment debtor's transferable interest and makes the charging order a lien on it. Subsection 3 states that the charging order lien may not be foreclosed upon under this chapter or any other law. Subsection 7 states that the section provides the exclusive remedy by which a judgment creditor may satisfy a judgment out of the judgment debtor's transferable interest, and repeats that the creditor may not foreclose upon the charging order.
Compare that with the rest of this region. Idaho, Iowa, Illinois, Hawaii and Kentucky all make the charging order exclusive and then allow foreclosure. Georgia does not make it exclusive at all and expressly preserves garnishment. Kansas bars foreclosure and Maine bars it too, in two separate subsections. A Maine judgment creditor is entitled to the distributions the company chooses to make and to nothing else, permanently.
Whether a sole member gets the same protection
Section 1573 contains no provision addressing single-member companies, so the exclusive remedy and the foreclosure bar read the same regardless of member count. That places Maine among the more protective states for a one-member LLC, since several states either carve out sole members expressly or allow foreclosure that achieves the same result.
The drafting consequence follows the statute. Because a creditor holding a charging order receives only what is distributed and cannot force a sale, an agreement that leaves distributions to the discretion of the members keeps the remedy hollow, while a fixed quarterly distribution schedule hands a creditor a payment plan. Keep the entity itself clean, which a certificate of existence evidences.
Duties, and the Provisions Section 1522 Protects
Section 1559 takes an unusual starting point. A member who is not managing the company owes no fiduciary duty to the company or to the other members solely by reason of being a member. A member or other person who is managing must act in good faith with a view to the interests of the company, and must exercise the degree of diligence, care and skill that ordinarily prudent persons would exercise under similar circumstances in like positions. Liability attaches where the person acted dishonestly or without a reasonable belief that the action was in the best interests of the company.
Section 1521 then allows the agreement to modify those duties, and subsections 3.A and 3.B look to a written limited liability company agreement when duties are being altered or liability limited. Section 1522 sets the outer boundary. The agreement may not vary the distinction between the company and its members, its capacity to sue and be sued in its own name, the law applicable to it, the power of the court, or the requirement that a contribution obligation be in writing. It may not restrict the rights of persons other than members and transferees except in limited circumstances, may not eliminate or limit a member's liability for a bad faith breach of good faith, and may not vary the requirements for dissolution and winding up. Every Maine agreement carries an implied covenant of good faith and fair dealing that cannot be eliminated.
Three Maine Companies and the Section That Reached Them
Example one: a member who left and never stopped being paid
Casco Bay Marine Services LLC in South Portland had four members and, despite section 1531, nothing beyond a two-page formation document. One member moved out of state in 2023. Section 1583 gave him no right to any payment on account of dissociation and kept him entitled to the distributions he would have received had he stayed. Over the following two years the company distributed $640,000 and roughly $160,000 went to somebody who had stopped working there. The company had no mechanism to buy him out and he had no obligation to sell.
Example two: contribution records that did not exist
Two founders started a Brunswick software consultancy, one contributing $140,000 and the other contributing equipment they valued informally at about $60,000. No written record fixed either figure. When they fell out over a $210,000 distribution, section 1554 required allocation on the basis of the agreed value stated in the written records of the company, and there were none. The equipment valuation moved from $60,000 to a disputed range of $18,000 to $75,000 depending on who was asked, and the argument cost more than $55,000 in fees and appraisal work to settle a question a one-page schedule would have answered.
Example three: a creditor who could only wait
A Rockland restaurant group was owned equally by three members, one of whom incurred a $310,000 personal judgment from an unrelated guarantee. The creditor obtained a charging order over his transferable interest. Section 1573 made it the exclusive remedy and barred foreclosure in two separate subsections, so the creditor could not force a sale, could not reach company assets and could not compel a distribution. Because the agreement left distributions to the discretion of the members, the creditor collected only what the company chose to pay. That is the Maine statute working exactly as written, and it only worked because the discretion was in the document.
Five Mistakes Maine LLCs Keep Making
Mistake 1: assuming Maine is like every other state
Section 1531(1)(B) requires the agreement to exist, the statute calls it a limited liability company agreement, and section 1573 bars foreclosure. A national template knows none of that.
Mistake 2: a sole owner treating the requirement as inapplicable
Section 1531 does not exempt single-member companies. A signed agreement between the owner and the company is the straightforward answer.
Mistake 3: leaving contributions undocumented
Section 1554 reads written records and section 1553 makes unwritten contribution promises unenforceable. Undocumented capital is a dispute waiting for a trigger.
Mistake 4: expecting to file it with the Secretary of State
The requirement is to have the agreement, not to lodge it. There is no Maine form and no fee. What can be filed is a statement of authority under section 1542.
Mistake 5: never writing an exit
Section 1583 pays a departing member nothing and keeps paying them distributions. Without a buyout clause the only endings are agreement or litigation. Keep the public record current too, through agent changes and amendments to the certificate of formation.
What Happens When a Maine Company Ignores Section 1531
Maine attaches no fine to the absence of an agreement and the Secretary of State will not notice. The requirement in section 1531(1)(B) has no penalty clause behind it. The cost lands privately instead, and it lands hard because the defaults Maine supplies are unusually durable.
The South Portland marine company paid roughly $160,000 over two years to a member who had left, with no way to end it. The Brunswick consultancy spent more than $55,000 establishing a contribution value that a one-page schedule would have fixed at formation. Neither figure is a penalty. Both are the price of letting sections 1554 and 1583 decide.
Where members go to court, ordinary commercial numbers apply. A contested claim among Maine members that reaches discovery and a valuation contest commonly runs past $75,000 per side in legal fees, and each side generally engages its own appraiser, which for a small operating company costs roughly $10,000 to $25,000. Section 1595 offers judicial dissolution where it is not reasonably practicable to carry on, and that is an expensive way to answer a question a buyout clause answers for nothing.
There is also a quieter version. A bank that cannot see an agreement naming a signer declines the account, which stalls payroll and card settlement for weeks. A lender treats it as an underwriting flag. A buyer discounts. And a company preoccupied with an internal argument misses the June 1 annual report and pays for reinstatement on top.
How File.Business Drafts Maine LLC Agreements
We draft to Title 31, chapter 21, and we use Maine's own terminology so the document matches the statute it answers to. The intake covers members and interests, contributions with the written record section 1554 depends on and the signed commitments section 1553 requires, direction and any manager role, thresholds in place of the section 1556(3) unanimity list, buyout terms to fill the gap section 1583 leaves, transfer controls, duty and liability provisions written within the section 1522 boundaries, and the federal tax election. Companies holding Maine real estate get a matching statement of authority, and companies trading in other states get the agreement aligned with their foreign qualification. Trading names go through assumed name registration.
Templates against drafted agreements
A template will satisfy section 1531 in the narrow sense that a document exists. It will not price an exit, will not create the written contribution records section 1554 reads, and will not keep distributions discretionary in the way that makes section 1573 worth having. General principles are in operating agreement essentials; the Maine adjustments are the part that matters.
Maine LLC Agreement FAQ
Does Maine require an LLC to have an operating agreement?
Yes. Maine is one of the few states that says so in its formation section. 31 M.R.S. § 1531(1)(B) provides that a limited liability company agreement must be entered into or otherwise existing, and that it may be entered into before, after or at the time the certificate of formation is filed.
Does the Maine agreement have to be in writing?
The Act sets no general writing requirement, so an agreement can exist without a signed document. Several provisions still look for a written agreement, including the duty and liability provisions referenced in 31 M.R.S. § 1521, and section 1553 makes a promise to contribute unenforceable unless it is in a writing signed by the member.
What does Maine call the operating agreement?
A limited liability company agreement. Title 31, chapter 21 uses that term throughout and never uses the phrase operating agreement, which is why searches of the Maine code for the more common wording come back empty.
Is the agreement filed with the Maine Secretary of State?
No. There is no Maine form for it and no fee, because it is an internal contract rather than a filing. The state receives the certificate of formation, the annual report due June 1 and, optionally, a statement of authority under section 1542.
What does a Maine member receive on leaving the company?
No payment for the departure itself. 31 M.R.S. § 1583 provides that a dissociated member has no right on account of the dissociation to any payment from the company, loses participation rights, and remains entitled only to the distributions the member would have received had the member not dissociated.
Can a creditor foreclose on a Maine member's interest?
No. 31 M.R.S. § 1573 makes the charging order the exclusive remedy for satisfying a judgment out of a member's transferable interest, and states in two separate subsections that the charging order lien may not be foreclosed upon under that chapter or any other law.
Can File.Business draft a Maine LLC agreement?
Yes, at $99 flat, alongside a formation or for an existing company. The draft uses Maine's statutory terminology, creates the written contribution records section 1554 relies on, adds the buyout section 1583 omits, and keeps distributions discretionary so the section 1573 protection stays useful.
Need a custom Maine Operating Agreement?
File.Business drafts Maine-specific Operating Agreements at $99 flat: customized for single-member or multi-member structure, ownership percentages, capital contributions, tax election preferences, and management structure. Includes member-signature template and document-vault storage.
Doing this in Maine specifically: Maine operating agreement covers the clause list, the Title 31 defaults each clause replaces and the statutory requirement in section 1531 that the agreement exist at all. It is never filed with the Secretary of State and no state fee applies.
This guide is written from the official sources below. Fees, forms, and deadlines change; confirm the current requirement with the agency before you file.
Disclosure. File.Business is a private filing service, not a government agency and not a law firm. We prepare and submit filings at your direction, and nothing on this page is legal or tax advice. Filing fees, deadlines, and statutory references are current as of the last-updated date shown above and can change. Confirm current requirements with the relevant state agency before you file.
