Maine‰'s New Limited Liability Company Act

On July 1, 2011, a new Limited Liability Company Act will become effective in Maine. The new Act is a reflection of the many developments in LLC law since the enactment of the current act in 1993 as well as the increasing popularity of the LLC as a business model. One of the biggest changes in the new Act is the central role given to the LLC Agreement. Under the new Act, an LLC cannot be formed without an LLC Agreement, either oral or in writing. The new Act also gives members great flexibility in limiting the mandatory provisions of the Act in a written LLC Agreement. For example, while the implied covenant of good faith and fair dealing may not be eliminated, a written LLC Agreement may otherwise expand, restrict or eliminate any duties owed by the members, including any fiduciary duties, to the other members and to the company. The New Act allows members to tailor the LLC Agreement to reflect their particular relationships and interests in ways that are unavailable under the current law. If you, or anyone you know, is seeking advice about starting a new business or have questions about the new LLC provisions, please give us a call.