Does nonorthogonality necessarily imply nonmaximal entanglement ?

We show that bipartite entanglements involving non-orthogonal states are {\it necessarily nonmaximally} entangled, however {\it small} the non-orthogonality may be. How the deviation from maximal entanglement is related to nonorthogonality is quantified by using two independent measures of entanglement corresponding to the violation of Bell's inequality and the entropy measure respectively. This result is true even if one of the subsystems has orthogonal states. An application of this is that a maximal violation of Bell's inequality in entangled neutral kaons is not possible in the presence of CP violation.