The Maine LLC Operating Agreement

An operating agreement is the internal contract among the members of an LLC that sets out how the company is owned and run. If the Certificate of Formation is the public birth certificate of your LLC, the operating agreement is the private rulebook that governs its actual life — and the two do completely different jobs.

Public filing vs. private agreement

• The Certificate of Formation (Form MLLC-6) is what you file with the Maine Secretary of State to bring the LLC into existence. It's short, public, and deliberately lean — it doesn't ask about ownership percentages or how you run the company.
• The operating agreement is never filed with the state and never becomes public. It lives with your records and the members. It's where all the substance of how the business actually works gets written down.

Maine's LLC statute (Title 31) recognizes operating agreements and gives them broad authority to govern the company's internal affairs. In most cases, what your agreement says controls — and where it's silent, the statute's default rules step in.

A common assumption is that operating agreements are only for partnerships. In reality, they matter for every LLC, and the reasons differ by structure.

For single-member LLCs

If it's just you, an operating agreement might feel pointless — there's no one to negotiate with. But it does two important things:

• It reinforces your liability shield. One of the strongest arguments an opponent makes when trying to pierce your LLC is that the company isn't really separate from you. A written operating agreement, followed in practice, is concrete evidence that you treat the LLC as a distinct entity. Courts look for exactly this.
• It's often required to operate. Many banks ask to see an operating agreement before opening a business account, and some partners, lenders, or landlords request one. Not having it can stall ordinary business steps.

For multi-member LLCs

Here the agreement is essential, not optional. Without it, you're leaving to Maine's default rules — and to memory and goodwill — the answers to questions that eventually cause real conflict: How are profits split? Who can bind the company? What happens if a member wants out, dies, or stops contributing? A written agreement settles these before they're disputes. Partnerships that felt effortless at the start are exactly the ones that fracture when a big decision or a departure forces the question and there's nothing in writing.

A thorough operating agreement covers the full life of the company, from formation through the exit of a member and, eventually, dissolution. The core provisions:

Ownership and capital

• Ownership percentages: Who owns how much of the LLC, expressed as membership interests or units
• Capital contributions: What each member contributed to start — cash, property, or services — and any obligation to contribute more later
• Additional contributions: Whether and how members can be called on for more capital, and what happens if someone can't or won't

Money

• Profit and loss allocation: How profits and losses are divided among members — usually by ownership percentage, but it can differ if the agreement says so
• Distributions: When and how cash is actually paid out to members, and in what priority

Control

• Management structure: Whether the LLC is member-managed (all members run it) or manager-managed (designated managers run it, some members may be passive)
• Voting rights: How votes are weighted and which decisions need what level of approval — ordinary matters vs. major decisions like taking on debt or admitting a member
• Authority to act: Who can sign contracts and bind the company

Change and exit

• Transfer restrictions: What happens when a member wants to sell their interest — rights of first refusal, approval requirements, valuation methods
• Buy-sell / exit provisions: How a member's interest is bought out on departure, death, disability, or dispute
• Admission of new members: The process and approval needed to bring someone in
• Dissolution: The circumstances under which the LLC winds up and how remaining assets are distributed after debts are paid

If you never write an operating agreement, your Maine LLC still has rules — they just come from the statute instead of from you. Under Title 31, Maine's default provisions fill in for whatever your agreement doesn't address, and those defaults may not match what you would have chosen.

Examples of what the defaults can decide

• How profits and voting are allocated among members, which under default rules may not track the arrangement you'd assumed
• What consent is needed to admit a new member or take major actions
• What happens when a member leaves, dies, or wants out, and how their interest is treated
• How disputes over management decisions get resolved

The problem isn't that the defaults are unreasonable — it's that they're generic. They're written for the average case, not your specific deal with your specific partners. When there's real money or a real disagreement on the line, "whatever the statute says" is a poor substitute for "what we agreed to in writing." An operating agreement lets you override the defaults with terms that fit your company.

The agreement controls where it speaks

The practical rule of thumb: your operating agreement governs the internal affairs of the LLC, and the statute fills only the gaps you left. The more complete your agreement, the less you're subject to defaults you never chose. That's the whole reason to write a thorough one.

An operating agreement only helps if it's actually done, signed, and maintained.

Getting it drafted

For a simple single-member LLC, a solid template can be a reasonable starting point. For a multi-member LLC — especially with unequal ownership, outside money, real property, or partners who bring different things to the table — have an attorney draft or review it. The cost of good drafting is trivial next to the cost of litigating a dispute the agreement would have prevented.

Signing and storing

Every member signs the agreement. Keep the executed copy with your LLC records, alongside your Certificate of Formation and EIN confirmation. You don't file it anywhere — but you should be able to produce it for a bank, a lender, or in a dispute.

Keeping it updated

The agreement should evolve with the company. Amend it when members join or leave, when ownership percentages change, when you shift between member-managed and manager-managed, or when the deal among the members changes in any material way. An outdated agreement that no longer reflects reality can be as much of a problem as none at all.

Where Mainstay Filing fits

We form your Maine LLC and serve as your registered agent, and we can point you toward operating agreement resources as part of getting the company set up properly. Because a well-drafted agreement — particularly for a multi-member LLC — is a legal document, the drafting of custom terms is a job for an attorney. We're a filing service, not a law firm, so our role is making sure the formation is done right and reminding you that the operating agreement is the piece that shouldn't be skipped.