Maine at a glance
Partnership law
RUPA (revised)
LLC default split
Proportional to capital
Operating agreement
Required (oral OK)
Community property
No
Formation cost
$175
Annual cost
$85 annual report fee
Maine is one of the few states that requires LLCs to have an operating agreement. Maine adopted a modified RULLCA but retained proportional distributions based on contributions under Me. Title 31 section 1554. Maine also follows RUPA for partnerships.
Default partnership rules in Maine
Maine adopted RUPA, treating partnerships as separate entities. Profits and losses are shared equally by default. Partners have equal management rights and owe fiduciary duties of loyalty and care.
The most important takeaway: profits are split equally by default in Maine, regardless of capital contributions. If you and a partner start a business and one of you invests $100,000 while the other invests $5,000, you still split profits 50/50 without a written agreement. This is true in every US state, including Maine.
LLC defaults in Maine
Under Me. Title 31 section 1554, Maine defaults to proportional distributions based on each member's contributions. Maine modified the standard RULLCA equal-split default. Maine requires LLCs to have an operating agreement, though it does not need to be in writing. Without a written agreement, proving the terms of an oral agreement can be extremely difficult.
Maine defaults to proportional distributions based on capital contributions, which aligns better with many founders' expectations than equal-split states. However, capital contributions alone rarely tell the full story. A founder contributing time and expertise may receive nothing if they didn't invest cash. An operating agreement can account for all types of contributions. Our equity calculator can help you determine a fair arrangement.
What happens when a partner leaves in Maine
Under Maine's RUPA, a partner's departure does not dissolve the partnership. The partnership continues, and the departing partner is entitled to a buyout at fair value.
A written partnership agreement should still address departure terms specifically, including how the buyout value is calculated, the payment timeline, and any non-compete provisions. While RUPA provides a default framework, the details of a buyout can still lead to disputes if not spelled out in advance. Understanding the concept of dead equity is important for managing these situations. Learn more about how dead equity affects businesses.
Marriage and business equity in Maine
Maine is an equitable distribution state. Business interests acquired during marriage are divided equitably in a divorce. Maine courts consider the contributions of each spouse, the value of the property, and the economic circumstances of each party.
Even though Maine is not a community property state, marriage can still affect your business equity. In equitable distribution states, courts divide marital property based on what is fair, which may include business interests acquired or grown during the marriage. A clear equity agreement and proper documentation of ownership can help protect your business in the event of a divorce.
Formation and cost considerations in Maine
| Formation cost | $175 |
| Annual/recurring cost | $85 annual report fee |
| State income tax | Yes |
| Partnership law | RUPA (revised) — partnership continues after departure |
| LLC default distributions | Proportional to capital contribution |
| Operating agreement | Required (oral or written) |
Frequently asked questions
Does Maine require an operating agreement?
Yes, Maine is one of the few states that requires LLCs to have an operating agreement. However, it does not need to be in writing. For practical purposes, a written agreement is essential since proving the terms of an oral agreement in a dispute is extremely difficult. Without one, Maine's default rules allocate distributions proportional to contributions.
What is the default LLC profit split in Maine?
Under Me. Title 31 section 1554, Maine defaults to proportional distributions based on each member's contributions. Members who contributed more capital receive a larger share of profits unless the operating agreement says otherwise. Maine modified the standard RULLCA equal-split default.
How much does a Maine LLC cost?
Maine LLC formation costs $175, and the annual report fee is $85. First-year costs are at least $260 before legal fees.
How do partnerships work in Maine?
Maine follows RUPA, which treats partnerships as separate entities, splits profits equally by default, and allows a partner to leave without dissolving the partnership.
Related resources
- Equity calculator: find a fair split for your business
- Does your small business need an equity agreement?
- Equity for small businesses: the complete guide
- Dead equity calculator: how much is yours costing you?
- Slicing Pie calculator
- What is an operating agreement?
- All 50 states: partnership and LLC default rules
Partnership laws in neighboring states
Disclaimer: This page provides general information about Maine partnership and LLC default rules and is not legal advice. Laws change, and the information here may not reflect the most recent amendments. The formation costs and annual fees listed are approximate and may vary. Consult a qualified attorney licensed in Maine for advice specific to your situation. Equity Matrix is a software tool for tracking contributions and calculating equity; it does not provide legal services.
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