How to Start an LLC in Maryland
Here are the 6 steps to start a limited liability company (LLC) in Maryland
For more information on how to form an LLC in any state, see the article How to Form an LLC.
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Learn about Maryland LLC formation, including information on Registered Agents, naming rules, business licenses, and more.
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Creating an LLC in Maryland
A limited liability company (LLC) offers many benefits to small businesses, including liability protection and tax advantages.
An Limited Liability Company LLC must be formed in Maryland by filing an Articles of Organization with the Maryland Department of Assessments and Taxation and paying the $100 filing fee.
However, you’ll first need to choose a name and registered agent for your Maryland LLC. The formation of an LLC may take up to 5-7 days online or 4 to 6 weeks by mail. Additionally, expedited filings are available.
An LLC can be easily formed in Maryland. Our step-by-step guide on How to Start an LLC in Maryland will help you get started today. Find out more about LLCs and their benefits in our What is an LLC guide.
Step 1. Choose a Name for Your LLC Maryland
Creating an LLC in Maryland requires you to choose a business name before you can file a Articles of Organization. Be sure that your business name complies with the Maryland naming requirements and can be searched by potential customers.
- Maryland law requires an LLC name to contain the words “Limited Liability Company” or “Limited Company,” or the abbreviations “Ltd.,” “LLC,” or “LC.” “Limited” may be abbreviated as “Ltd.” or “LTD,” and “Company” as “Co.”
- It is not acceptable for your Maryland LLC to have words associated with a government agency (FBI, Treasury, State Department, etc.).
- You should avoid using words or abbreviations that may make your LLC Maryland appear to be a different type of entity, such as “LP” or “corporation”.
- There may be additional documentation and licensure paperwork required for certain restricted words (bank, lawyer, attorney, credit union, etc.).
- Check the state’s business name database to ensure the name you want is not already taken(including businesses no longer in operation)
See a complete list of Maryland’ naming rules here.
Check URL availability: You are likely to need a web page even if you don’t think you do. Buying your domain name now will at least give you the option of having one in the future. It’s a good idea to check the URL availability before finalizing your Maryland LLC name.
You can file a DBA in Maryland after you’ve registered your business. Depending on the nature of your business, obtaining a DBA can be beneficial in a variety of ways. DBA registration is frequently used by owners of corporations and limited liability companies (LLCs) who filed a business name when they formed their legal entity.
The Business Name Search feature on Maryland Business Express allows you to look up existing Maryland businesses, so make sure your name isn’t already taken. If you’ve come up with the perfect name for your company but aren’t ready to register it yet, you can reserve it by filling out this form.
An LLC stands for a Limited Liability Company. A simple business structure that is more flexible and offers many of the same benefits as a traditional corporation. For more information, see “What is a Limited Liability Company?”.
Step 2: Appoint Your Registered Agent in Maryland
Your next step in forming an LLC in Maryland is to appoint a Registered Agent, an individual or company authorized to receive legal and state mail on your behalf.
All Maryland LLCs must have a registered agent. Please include your registered agent’s name and address on your Articles of Organization.
Registered Agent Requirements in Maryland
To comply with Maryland law, your LLC’s registered agent must be a resident or business entity that maintains a physical address in Maryland. The “registered address” cannot be a P.O. box. It must be a real physical address that can be visited in person.
Further, in Maryland, your registered agent must agree to perform this role and sign a form confirming their consent. Consent statements should include the following:
- Written confirmation that the person designated consents to serve as the LLC’s registered agent
- The name of your Maryland LLC and the person designated as your registered agent
- Registered agent’s signature
- Date of execution
Although you do not have to submit this form to the Secretary of State, your business must record it. Learn more about Maryland Registered Agents by reading our full guide.
A resident agent must be a Maryland resident or a corporation authorised to conduct business in Maryland, such as a registered agent service. You have the option of electing someone from your company, including yourself.
Fill out a Resolution to Change Principal Office or Resident Agent form with the Maryland State Department of Assessments and Taxation to change your registered agent, also known as a resident agent.
Are You looking for a Registered Agent?
Wise Business Plans offers a free year of registered agent service when forming an LLC in Maryland.
Step 3.Prepare and File Articles of Organization
To create a Maryland LLC, you will need to file Articles of Organization with the Maryland Department of Assessments and Taxation. You may apply online, by mail, or in person.
If you choose one of our business formation services, we can handle this step for you.
The following information is typically required to create a Articles of Organization:
- Your LLC name and principal place of business.
- Name, address, and signature of the LLC’s registered agent
- Decide whether your Maryland LLC will be member-managed or manager-managed. Indicate the names and addresses of each member and manager.
- The reason for forming the LLC in Maryland.
- Name and address of the LLC’s organizer.
- The effective date of the certificate,
- The person forming the LLC must sign the Certificate.
Foreign LLCs: LLCs that are based in another state but intend to conduct business in Maryland must complete a form called the Qualification of Foreign LLC.
A filing fee of $100 also applies to this form, and you need to attach your state’s certificate of good standing.
Two Ways to File the Articles of Organization
The 1st option is:
Online filing through the Maryland Business Express
The 2nd option is:
Filing the Articles of Organization by Mail
Address to Mail
There is a state filing fee of $100 payable to the Maryland Department of State. (nonrefundable)
Department of Assessments and Taxation
301 W. Preston Street
Baltimore, MD 21201
In a member-managed LLC, the members (owners) take on the business’s daily responsibilities. Manager-managed LLCs are managed by managers who are elected by the members. Those who manage your LLC will have the authority to do a wide range of tasks-from hiring staff to opening bank accounts.
When an LLC conducts business in the state where it was formed, it is called a “domestic LLC”. We normally refer to an LLC as a domestic LLC when we talk about it. When an existing LLC wishes to expand its business to another state, it must form a foreign LLC.
Step 4. Get a Certificate From the State
Upon filing your Articles of Organization, the secretary of state will review it. As soon as the Articles of Organization is approved, the LLC becomes a legal entity.
By obtaining this certificate, LLCs will be able to obtain an Employer Identification Number (EIN), licenses, and business accounts.
Step 5. Write an Maryland LLC Operating Agreement
An operating agreement is a legally-binding document that sets out how your LLC will operate, from the voting process to mergers.
Operating agreements are not required in Maryland, but they are an essential part of your business.
Written operating agreements are helpful for different reasons, including resolving disputes over financial agreements and other potential litigation.
The LLC declaration can prove that your LLC is a separate entity, which can help preserve your limited liability.
An operating agreement ensures that all business owners are on the same page and reduces the possibility of future conflict.
How should an operating agreement be drafted?
The operating agreement should detail the LLC’s overall business purpose and other important matters, such as how the company will be taxed and how new members will be accepted. Legal agreements can clarify several important concerns, such as:
- Who makes decisions for the company, especially those who decide if partners disagree.
- Who is responsible for different aspects of the business as well as for strategic decisions.
- If a partner leaves the company, what will happen to their ownership interests in the corporation.
- The members and their contributions
- How profits and losses will be divided
- Procedures for admitting new members and removing outgoing members
In Maryland, you can include just about anything in your operating agreement, as long as it doesn’t violate the state law or the Articles of Organization.
An operating agreement should be in place for every Maryland LLC owner to protect their company’s operations. While an operating agreement is not legally required by the state, it will establish clear rules and expectations for your LLC while also establishing your credibility as a legal entity.
Step 6. Get an EIN for Your Maryland LLC
Basically, an employer identification number (EIN) is a social security number for your LLC in Maryland.
To identify your LLC for tax purposes, the Internal Revenue Service assigns a nine-digit Employer Identification Number (EIN). You can apply for your EIN either by mail or online.
An EIN is used for the following purposes:
- Manage state and federal taxes
- Create a business bank account
- Hire employees
Get an EIN Number in Maryland
Getting an EIN number is easy and free, There are two ways to get an EIN number in Maryland.
The 1st option is:
Apply online for an EIN from the IRS
The 2nd option is:
Get an EIN by Mail or Fax
Address to Mail
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
An EIN is required for any LLC with employees or more than one member. The Internal Revenue Service (IRS) requires this.
A tax classification will be discussed with you when you obtain an EIN. In most cases, LLCs choose the default status.
Some LLCs can reduce their federal tax obligation by electing S corporation status. Consult with a local accountant to find out which option is best for you.
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What to do After Forming Your Maryland LLC
Keep your personal and business assets separate
Your personal assets (such as your home, car, and other valuables) may be at risk when your Maryland LLC is sued if they are mixed with your business accounts.
Here are some steps you can take to protect your LLC in Maryland:
1. Create a Business Plan:
If you have decided that a Maryland LLC will be a good choice for your business in Maryland, your next step is to create a business plan (although it is not required), so that you have a roadmap for what you will do and how you will accomplish it.
Free: Business Plans Examples
Do you need help creating a business plan? Check out these six free, proven business plan examples from different industries to help you write your own.
2. Open a Bank Account
As soon as your LLC is officially formed, you should open a business bank account. Why? Keeping separate bank accounts will help you maintain the legal distinction between the LLC and you (the owner).
Because LLCs are limited liability companies, creditors and litigants can’t take your assets.
Recommended: Check out our business bank account page to learn which banks offer the best business check accounts, ATM access, interest-bearing accounts, and online and mobile banking options for businesses.
3. Obtaining a business credit card:
- Allows you to separate personal and business expenses.
- Develops your company’s credit history, which can be helpful to raise capital (e.g., small business loans) later.
4. Hiring a business accountant:
- It prevents your business from overpaying taxes while preventing penalties, fines, and other costly tax mistakes.
- Gives you more time to focus on your growing business by simplifying bookkeeping and payroll.
- Manage your business’s funding more effectively. Find out where extra profit or loss can be made
Getting Business Insurance for Your LLC
You can manage risks and grow your LLC with business insurance. Here are the most common types:
- General liability insurance protects your business from lawsuits. Most small businesses purchase general liability coverage.
- Professional liability insurance protects professionals and businesses from claims of negligence from their clients or customers. Liability insurance typically covers negligence, copyright infringement, personal injury, and more.
- Workers’ compensation insurance: Covers illnesses, injuries, and deaths resulting from a worker’s work.
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- General business liability insurance
- Medical insurance
- Term life insurance
- Workers’ Comp
- Surety bonds
- Commercial auto
Maryland LLC FAQs
In Maryland, forming an LLC costs $100, but there are other costs to consider. Every Maryland limited liability company (LLC) is required to file an annual report and pay a $300 annual fee. You must also file a personal property tax return if your LLC owns, leases, or uses personal property in Maryland.
For small businesses, a limited liability company (LLC) provides liability protection as well as tax advantages. In Maryland, forming a limited liability company (LLC) is simple.
The formation of an LLC may take up to 5-7 days online or 4 to 6 weeks by mail. Additionally, expedited filings are available.
You must file Articles of Cancellation with the Maryland State Department of Assessments and Taxation (SDAT) by mail, fax, or in person to dissolve your LLC in Maryland. You must type or print your information in ink if you use the Maryland SDAT form.
By amending your Maryland LLC’s articles of organisation, you can change almost any information, including the LLC’s name, principal address, and registered agent.
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