RELATIONS OF MEMBERS TO EACH OTHER AND TO LIMITED LIABILITY COMPANY

M.R.S. tit. 31, ch. 21, subch. 5

in effect

31 M.R.S. §1551 Admission of a member

1551. Admission of a member 1. In connection with formation. In connection with the formation of a limited liability company, a person is admitted as a member of the limited liability company upon the later of: A. The formation of the limited liability company; and B. The time provided in and upon compliance with the limited liability company agreement or, if the limited liability company agreement does not so provide, when the person's admission is reflected in the records of the limited liability company. 2. After formation. After formation of a limited liability company, a person is admitted as a member of the limited liability company: A. As provided in the limited liability company agreement; B. As the result of a transaction effective under subchapter 12; C. With the consent of all the members; or D. If, within 90 consecutive days after the limited liability company ceases to have any members: (1) All holders of the transferable interest last transferred by the last person to have been a member consent to the designation of a person to be admitted as a member; and (2) The designated person consents to be admitted as a member effective as of the date the last person to have been a member ceased to be a member. 3. Admission without transferable interest or contribution. A person may be admitted as a member without acquiring a transferable interest and without making or being obligated to make a contribution to the limited liability company. PL 2009, c. 629, Pt. A, §2 (NEW). PL 2009, c. 629, Pt. A, §3 (AFF). PL 2011, c. 113, Pt. A, §10 (AMD).

31 M.R.S. §1552 Form of contribution

1552. Form of contribution A contribution may consist of cash, property or services rendered or a promissory note or other obligation to contribute cash or property or to perform services. PL 2009, c. 629, Pt. A, §2 (NEW). PL 2009, c. 629, Pt. A, §3 (AFF).

31 M.R.S. §1553 Liability for contributions

1553. Liability for contributions 1. Promise in writing. A promise by a member to make a contribution to a limited liability company is not enforceable unless set forth in a writing signed by the member. 2. Obligation not excused. A member's obligation to make a contribution to a limited liability company is not excused by the member's death, disability or other inability to perform personally. If a member does not make a contribution required by an enforceable promise, the member or the member's estate is obligated, at the option of the limited liability company, to contribute money equal to the value of the portion of the contribution that has not been made. The limited liability company's option is in addition to, and not in lieu of, any other rights, including the right to specific performance, that the limited liability company may have under the limited liability company agreement or applicable law. 3. Obligation compromised. The obligation of a member may be compromised only by consent of all the members. Notwithstanding the compromise, a creditor of a limited liability company who extends credit after the entering into of a limited liability company agreement or an amendment to the agreement that, in either case, reflects the obligation and before an amendment to the agreement that reflects the compromise may enforce the original obligation to the extent that, in extending credit, the creditor reasonably relied on the obligation of a member to make a contribution. A conditional obligation of a member to make a contribution to a limited liability company may not be enforced unless the conditions of the obligation have been satisfied or waived as to or by such member. Conditional obligations include contributions payable upon a discretionary call of a limited liability company prior to the time the call occurs. PL 2009, c. 629, Pt. A, §2 (NEW). PL 2009, c. 629, Pt. A, §3 (AFF).

31 M.R.S. §1554 Sharing of and right to distributions

1554. Sharing of and right to distributions 1. Agreed value. Distributions by a limited liability company before its dissolution and winding up must be made on the basis of the agreed value, as stated in any written records of the limited liability company, of the contributions made by each person or the person's predecessor in interest to the extent contributions have been received by the limited liability company and not returned. 2. Interim distribution. A person has a right to a distribution before the dissolution and winding up of a limited liability company only if the limited liability company decides to make an interim distribution. A member's dissociation does not entitle the dissociated member to a distribution. 3. Form of distribution. A person does not have a right to demand and receive a distribution from a limited liability company in any form other than money. Except as otherwise provided in section 1601, subsection 3, a limited liability company may distribute an asset in kind if each person receives a percentage of the asset equal in value to the member's share of distributions. 4. Status of creditor. If a member or transferee becomes entitled to receive a distribution, the member or transferee has the status of, and is entitled to all remedies available to, a creditor of the limited liability company with respect to the distribution. PL 2009, c. 629, Pt. A, §2 (NEW). PL 2009, c. 629, Pt. A, §3 (AFF).

31 M.R.S. §1555 Limitations on distribution and liability for improper distributions

1555. Limitations on distribution and liability for improper distributions 1. Improper distribution. A limited liability company may not make a distribution to the extent that at the time of the distribution, after giving effect to the distribution, all liabilities of the limited liability company, other than liabilities to members on account of their limited liability company interests and liabilities for which the recourse of creditors is limited to specific property of the limited liability company, exceed the fair value of the assets of the limited liability company, except that the fair value of the property that is subject to a liability for which recourse of creditors is limited must be included in the assets of the limited liability company only to the extent that the fair value of the property exceeds that liability. 2. Liability for improper distribution. A person who receives a distribution in violation of subsection 1, and who knew at the time of the distribution that the distribution violated subsection 1, is liable to the limited liability company for the amount of the distribution. A person who receives a distribution in violation of subsection 1, and who did not know at the time of the distribution that the distribution violated subsection 1, is not liable for the amount of the distribution. Subject to subsection 4, this subsection does not affect any obligation or liability of a person under an agreement or other applicable law for the amount of a distribution. 3. Action barred after 2 years. An action under this section is barred if not commenced within 2 years after the distribution. 4. Distribution exclusions. For purposes of this section, "distribution" does not include amounts constituting reasonable compensation for present or past services or reasonable payments made in the ordinary course of business under a bona fide retirement plan or other benefits program. 5. Distribution made in accordance with section 1601. This section does not apply to distributions made in accordance with section 1601. PL 2009, c. 629, Pt. A, §2 (NEW). PL 2009, c. 629, Pt. A, §3 (AFF).

31 M.R.S. §1556 Activities and affairs of limited liability company

1556. Activities and affairs of limited liability company 1. Direction; oversight of members. The activities and affairs of a limited liability company are under the direction, and subject to the oversight, of its members. 2. Majority of members. A matter in the ordinary course of activities of a limited liability company may be decided by a majority of the members. 3. All members. The consent of all members of a limited liability company is required to: A. Approve a merger or conversion under subchapter 12; B. Amend the limited liability company agreement; C. Undertake any other act outside the ordinary course of the limited liability company's activities; or D. Undertake, authorize or approve any other act or matter for which this chapter requires the consent of all members. 4. Without meeting; agent. Any matter requiring the consent of the members of a limited liability company may be decided without a meeting, and a member may appoint a proxy or other agent to consent or otherwise act for the member by signing an appointing record, personally or by the member's agent. 5. After dissolution, majority of members. After dissolution, a matter in the ordinary course of winding up the activities of a limited liability company may be decided by a majority of the members. 6. No entitlement to remuneration. This chapter does not entitle a member to remuneration for services performed for a limited liability company. PL 2009, c. 629, Pt. A, §2 (NEW). PL 2009, c. 629, Pt. A, §3 (AFF).

31 M.R.S. §1557 Indemnification, advancement, reimbursement and insurance

1557. Indemnification, advancement, reimbursement and insurance A limited liability company may indemnify and hold harmless a member or other person, pay in advance or reimburse expenses incurred by a member or other person and purchase and maintain insurance on behalf of a member or other person. PL 2009, c. 629, Pt. A, §2 (NEW). PL 2009, c. 629, Pt. A, §3 (AFF).

31 M.R.S. §1558 Right of members and dissociated members to information

1558. Right of members and dissociated members to information 1. Member; inspect and copy record. On 10 days' notice made in a record received by a limited liability company, a member may inspect and copy during regular business hours, at a reasonable location specified by the limited liability company, any record maintained by the limited liability company, to the extent the information is material to the member's rights and duties under the limited liability company agreement or this chapter. 2. Dissociated member; inspect and copy. On 30 days' notice made in a record received by a limited liability company, a dissociated member may inspect and copy, during regular business hours, at a reasonable location specified by the limited liability company, any record maintained by the limited liability company, to the extent the information pertains to the period during which the person was a member, the information was material to the person's rights and duties under the limited liability company agreement or this chapter when the person was a member and the person seeks the information in good faith. 3. Reasonable costs. A limited liability company may charge a person that makes a demand under this section the reasonable costs of copying, limited to the costs of labor and material. 4. Agent or representative. A member or dissociated member may exercise rights under this section through an agent or, in the case of an individual under legal disability, a legal representative. Any restriction or condition imposed by the limited liability company agreement or under subsection 6 applies both to the agent or legal representative and the member or dissociated member. 5. Transferee. The rights under this section do not extend to a transferee. 6. Additional restrictions. In addition to any restriction or condition stated in its limited liability company agreement, a limited liability company, as a matter within the ordinary course of its activities, may: A. Impose reasonable restrictions and conditions on access to and use of information to be furnished under this section, including designating information confidential and imposing nondisclosure and safeguarding obligations on the recipient; and B. Keep confidential from the members and any other persons, for a period of time the limited liability company considers reasonable, any information that the limited liability company reasonably believes to be in the nature of trade secrets or other information the disclosure of which the limited liability company in good faith believes is not in the best interest of the limited liability company or could damage the limited liability company or its activities or that the limited liability company is required by law or by agreement with a 3rd party to keep confidential. PL 2009, c. 629, Pt. A, §2 (NEW). PL 2009, c. 629, Pt. A, §3 (AFF).

31 M.R.S. §1559 Duties of members and other persons

1559. Duties of members and other persons Except as may be set forth in the limited liability company agreement in accordance with sections 1521 and 1522, the following provisions apply. 1. Good faith; diligence; care; skill. Persons shall discharge their duties under this chapter in good faith with a view to the interests of the limited liability company and of the members and with the degree of diligence, care and skill that ordinarily prudent persons would exercise under similar circumstances in like positions. For purposes of this section, the interests of each low-profit limited liability company and its members include furthering the purposes set forth in its certificate of formation consistent with statements required to be made in its certificate of formation pursuant to section 1611, subsection 2. 2. Personal liability. A member or other person may not be held personally liable for monetary damages for failure to discharge any duty unless the member or other person is found not to have acted honestly or in the reasonable belief that the action was in or not opposed to the best interests of the limited liability company or its members. 3. Fiduciary duty. Subject to the terms of section 1521, subsection 3, paragraph A, a member not involved in the management of a limited liability company does not have a fiduciary duty to the limited liability company, or to any other member, or to another person that is a party to or is otherwise bound by a limited liability company agreement, solely by reason of being a member. A member may not be considered to be involved in the management of a limited liability company as a result of the following: A. Having the right to vote or elect those persons that will manage the business of a limited liability company; or B. Having the power to vote on, approve or veto certain material transactions or actions involving the limited liability company, including the sale, merger, conversion or dissolution of a limited liability company, the amendment of the limited liability company agreement or its certificate of formation, the issuance of additional interests or admission of new members, the incurrence of indebtedness or granting of liens, the acquisition of another business or any portion of another business, however effected, the timing and amount of distributions or the undertaking of any other action outside the ordinary course of the limited liability company's activities. The actions and transactions described in this paragraph are not intended to be exclusive and no inference may be made from the absence of a particular action or transaction from the list of actions and transactions in this paragraph. PL 2009, c. 629, Pt. A, §2 (NEW). PL 2009, c. 629, Pt. A, §3 (AFF).

31 M.R.S. §1560 Nature of professional limited liability company business

1560. Nature of professional limited liability company business A professional limited liability company, as defined in Title 13, section 723, subsection 5, is subject to the Maine Professional Service Corporation Act except as follows. 1. No application. Title 13, sections 722, 733, 736, 751, 762 and 763, Title 13, section 771, subsection 2, paragraph A and Title 13, section 772 do not apply. 2. Application. All references to: A. Shareholders are deemed to be references to members and transferees; B. Corporations or corporations organized or incorporated under the Maine Professional Service Corporation Act are deemed to be references to professional limited liability companies; C. Stock are deemed to be references to transferable interests; and D. Officers and directors are deemed to be references to the officers and directors of the limited liability company, if any, and otherwise to any individuals having comparable management authority in respect of the limited liability company. References to clerk, treasurer and secretary are deemed to be references to such persons having comparable authority in respect of the limited liability company. PL 2009, c. 629, Pt. A, §2 (NEW). PL 2009, c. 629, Pt. A, §3 (AFF).

Source: Maine Legislature, Office of the Revisor of Statutes (legislature.maine.gov)URL: https://legislature.maine.gov/statutes/31/title31ch21sec0.htmlFetched: 10/20/2026