How to Start an LLC in Maryland | 2024 Guide

Steve Bennett
Business Formation Expert  |   Fact Checked by Editorial Team
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Start a LLC in Maryland

How to Start an LLC in Maryland: If you’re looking to launch a business in Maryland, starting a Limited Liability Company (LLC) may be the right choice for you. An LLC provides personal liability protection for its owners while giving them flexibility in managing and taxing the business. This guide provides a step-by-step process for starting an LLC in Maryland. From choosing a unique name to registering with the state and obtaining necessary licenses and permits, Webinarcare Editorial Team will walk you through setting up your new business entity. So grab a pen and paper, and let’s get started!

What is a Limited Liability Company?

A Limited Liability Company (LLC) is a type of business entity that combines a corporation’s limited liability protection with a partnership’s tax benefits. LLCs are popular among small business owners for their flexibility and ease of formation. In Maryland, an LLC must have a unique name and file Articles of Organization with the Secretary of State. Depending on their business needs, LLCs may also elect to be taxed as a corporation or an S-corp. Owners of an LLC, called members, are not personally liable for the company’s debts and losses, and the company’s profits and losses are passed through to the member’s personal tax returns. This makes an LLC an attractive option for those seeking personal liability protection and simplified taxation.

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Steps on How to Start an LLC in Maryland

To form an LLC for your business, you must follow the guidelines that include naming your LLC, hiring a Resident Agent, filing your Articles of Organization, creating your LLC operating agreement, getting an employer identification number, opening a bank account and getting business licenses and permits.

Step 1: Name your LLC in Maryland

After you have decided on the idea to form an LLC in Maryland, deciding the name for your LLC is significant. There is a complete guide on LLC name guidelines for you to have a proper LLC business name. Here are some regulations you must follow while naming your LLC,

  • The name should not be confused with a government entity.
  • The name should be unique.
  • The name should be available to use.
  • Any other business does not use the name.
  • The new name must include “LLC” if it is a limited liability company.

In Maryland, if you do not wish to file your LLC right away but want to hold the name that you have decided on, then you can reserve your LLC name for 30 days. You must file a name reservation application in Maryland Secretary of State to keep the name.

Recommended: We recommend a professional service that can offer you unlimited name search, trademark and copyright registration at a reasonable price. We recommend using –

LegalZoom($0 + State Fees for LLC Formation)

You can register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for filing Maryland DBA (doing business as). In this manner, you can choose any name you desire for your business. A DBA allows a company to operate under the name of the person or entity who owns it. If you have decided to file for a DBA, you can file it in three methods, online, by mail, and in person filing.. However, before filing a DBA, you should know that you need to renew your DBA from up to five years, which costs around $25 Filing Fee and $50 Expedited Fee.

Step 2: Hire a Resident Agent in Maryland

Hiring a Resident Agent in Maryland is a must since a Resident Agent is a person or business entity responsible for receiving important legal documents on behalf of your Maryland LLC. Most states require you to designate a Resident Agent when forming your LLC.

The qualifications of a Resident Agent vary depending on the jurisdiction. Still, generally, a Resident Agent must meet the following criteria:

  • Availability: A Resident Agent must be available during regular business hours to receive and process legal documents and official correspondence.
  • Physical Address: A Resident Agent must have a physical street address within the state where the LLC is registered. This address, known as the registered office, cannot be a P.O. Box.
  • Residency or Authorization: For individuals serving as Resident Agent, they must be residents of the Maryland where the LLC was formed. A business entity acting as a Resident Agent must be authorized to do business within that state.
  • Age: A Resident Agent must be at least 18 years old.
  • Good standing: A Resident Agent should not have any legal or financial issues that impede their ability to fulfill their duties.

Choosing a reliable and responsible Resident Agent is essential, as failure to receive and respond to legal documents can seriously affect your business. Some businesses use professional Resident Agent services to ensure compliance and proper handling of legal matters.

However, if you would like to have an easier process in filing the necessary documents, you can get Maryland Resident Agent Services.

Step 3: File your Articles of Organization in Maryland

The Articles of Organization for an LLC is an important document to start your limited liability company (LLC). Maryland Articles of Organization is a simple document that contains the business name and address as well as the name and address of the person who received lawsuits on behalf of the organization.

Here are the guidelines and specific requirements in filing your Articles of Organization in Maryland.

1. Obtain the Necessary Forms: Visit the Maryland’s business filing office website, usually the Maryland Secretary of State’s office, to download the required forms or file online.

2. Provide the Required Information: Fill in the necessary details in the form, which typically include:

  • The name of your LLC (must include an LLC designator such as “LLC,” “L.L.C.,” or “Limited Liability Company”)
  • The purpose of your LLC (a general statement or specific business activities)
  • The address of your LLC’s principal place of business
  • The name and address of your registered agent (the person or business entity responsible for receiving legal documents on behalf of your LLC)
  • The management structure of your LLC (member-managed or manager-managed)
  • The duration of your LLC, if not perpetual
  • The names and addresses of the LLC’s organizers or members

3. Sign and File the Form: Submit the completed form in the {state} state office, either by mail, in person, or online. You may mail it at CoState Department of Assessments and Taxation, Charter Division 301 W. Preston Street; 8th Floor, Baltimore, MD 21201-2395.

4. Pay the Filing Fee: When you submit your Articles of Organization, you’ll need to pay a filing fee of $100. Make sure to check and include the correct payment with your submission.

5. Receive Confirmation: After your Articles of Organization have been filed and processed, you’ll receive a confirmation from Maryland, typically a stamped and approved copy of the document or a Articles of Organization.

Recommended: Filing formation papers is easy and hassle-free if you hire a professional service. We recommend using –

LegalZoom($0 + State Fee)

Once you have successfully filed your Articles of Organization and it has been approved, your Maryland LLC is officially formed. However, remember to complete additional steps, such as creating an Operating Agreement, obtaining an EIN, and registering for any required licenses and permits.

Step 4: Create Your Maryland Operating Agreement

An operating agreement is a document that contains all of your company’s organizational details. Drafting an operating agreement in most states is not required. Yet, having one as an internal document is strongly advised. An operating agreement includes information like-

  • About Business
  • Members and management
  • Capital contribution
  • Profit Distribution
  • Change of membership
  • Dissolution

To understand how an operating agreement works, you should check out how to create an operating agreement in Maryland.

Recommended: Get oprating agreement drafts ready on your table with a help of a professional service. We recommend using –

LegalZoom($0 + State Fee for LLC formation)

Step 5: Get an EIN

After documenting the operating agreement, you should get or request an Employer Identification Number (EIN) in Maryland. An EIN will serve as the tax ID for your professional corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in Maryland can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

In obtaining an EIN for your LLC, you should be aware to ensure that your LLC is eligible for an EIN. You need an EIN if you have employees, operate as a corporation or partnership, or meet other specific IRS criteria. Before applying, gather the required information, including your LLC’s name, mailing address, and the responsible party’s Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). Also, you can apply for an EIN through various methods, including online, by fax, mail, or telephone (for international applicants).

Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –

LegalZoom($0 + State Fee for LLC formation)

Step 6: Open a Bank Account and Prepare for Taxes

After you have filed for and received your Employer Identification Number, you should open a bank account because you will use this account for yourself, your clients, and your employees.

Your business dealings in Maryland might be simpler with a US business bank account because it boosts your company’s legitimacy and liquidity. Most banks demand an EIN to create a business bank account for firms other than sole proprietorships. Also, having an EIN makes tax preparation easier. You can anticipate paying employment and corporate taxes with Maryland LLC.

Opening a bank account is necessary for Maryland business. If you are still wondering where to open an account in your Maryland, you should check the Best Bank for Small Business in Maryland.

Step 7: Get a Business and License Permit

You must get a business license in Maryland before establishing your LLC. A business license is a legal document granted by a state government body that permits you to conduct business within the area under its jurisdiction. The price of business licenses and permits in Maryland ranges from $50 – $300. If there is a requirement for a specific license or city-based permit, you must inquire with the Maryland Secretary of State.

Cost to Form an LLC in Maryland

Even if you have a business name and structure in mind, you should consider whether you can afford the costs of forming an LLC in Maryland. Articles of Organization costs around $100. The initial filing fee is $100, and the annual fee is $300.

If you forget to pay the annual fee for your Maryland LLC, you will have a penalty of $200. However, you can check the Maryland LLC Cost for additional information.

Advantages of Creating Maryland LLC

Even though some people decide on what to do with their businesses, some choose to put it in their own individual name, while others still choose to set it up via LLC in Maryland. Important benefits will help you set up an LLC in Maryland.

  • Pass-Through Taxation: The pass-through structure will make the company not pay twice the tax. Most start-ups and entrepreneurs in Maryland apply for an LLC because of this structure. Pass-through taxation refers to how income and losses from an LLC (Limited Liability Company) are passed through to its members (owners) for tax purposes rather than being taxed at the business entity level. This means the LLC does not pay federal income taxes; the members’ profits and losses are allocated based on their interests. Each member then reports their share of the LLC’s income or losses on their personal tax returns and pays taxes at their individual tax rates.
  • Ownership Flexibility: If you need sole and primary control over your company’s operations, a sole proprietorship will allow you to do so. If you apply for an LLC in Maryland with flexibility, you will have default rules set by law and need an operating agreement.
  • Personal Liability Protection: Personal Liability Protection protects your business from damage, debts, or legal obligations. In personal liability protection, the company’s profits and earnings will stay as is even if your company is about to be sued. This protection of having an LLC in Maryland can also be extended to the company’s properties and assets. Many start-up companies will benefit from this since most are starting to build a company. Even if liability exists, the LLC in Maryland will protect its assets.

FAQs

What does LLC stand for?
LLC stands for Limited Liability Company.
Can a foreigner form an LLC in Maryland?
Yes, a foreigner can form an LLC in Maryland.
What is the processing time for forming an LLC in Maryland?
The processing time for forming an LLC in Maryland is about 7-10 business days.
How much does it cost to form an LLC in Maryland?
It costs $100 to form an LLC in Maryland.
Can I file my LLC paperwork online in Maryland?
Yes, you can file your LLC paperwork online in Maryland.
Do I need a Registered Agent when forming an LLC in Maryland?
Yes, you need a Registered Agent when forming an LLC in Maryland.
What is a Registered Agent?
A Registered Agent is a person or company designated to receive legal papers and official documents on behalf of an LLC.
Can I be my own Registered Agent for my LLC in Maryland?
Yes, you can be your own Registered Agent for your LLC in Maryland.
Is a business license required to operate an LLC in Maryland?
Yes, a business license is required to operate an LLC in Maryland.
Do I need to register my LLC with the state of Maryland for taxes?
Yes, you need to register your LLC with the state of Maryland for taxes.
Is a Maryland LLC required to have an Operating Agreement?
No, an Operating Agreement is not required for a Maryland LLC, but it is highly recommended.
How many members can an LLC have in Maryland?
An LLC in Maryland can have any number of members.
Is an LLC required to file an annual report in Maryland?
Yes, an LLC is required to file an annual report in Maryland.
How much does it cost to file an annual report for an LLC in Maryland?
It costs $300 to file an annual report for an LLC in Maryland.
Can I file my LLC’s annual report online in Maryland?
Yes, you can file your LLC’s annual report online in Maryland.
How can I dissolve my LLC in Maryland?
You can dissolve your LLC in Maryland by filing Articles of Dissolution with the state.
Is an Operating Agreement required for an Maryland LLC?
No, an Operating Agreement is not required for an Maryland LLC, but it is highly recommended.
Can I change my LLC’s name in Maryland?
Yes, you can change your LLC’s name in Maryland by filing an Amendment to the Articles of Organization with the state.
How do I obtain an Employer Identification Number (EIN) for my Maryland LLC?
You may obtain an EIN for your Maryland LLC by applying online at the IRS website or by mailing in Form SS-4.
Is a Maryland LLC required to hold annual meetings?
No, a Maryland LLC is not required to hold annual meetings.
Can a single-member LLC in Maryland hire employees?
Yes, a single-member LLC in Maryland can hire employees.
Are there any professional services that handle LLC formation in Maryland?
Yes, there are many professional services that handle LLC formation in Maryland.
What is the difference between an LLC and a corporation in Maryland?
An LLC is generally less complex and less formal than a corporation, and it offers greater flexibility in management and taxation.
Can a Maryland LLC choose S-Corp taxation status?
Yes, a Maryland LLC can choose S-Corp taxation status by filing Form 2553 with the IRS.
Does Maryland have any unique LLC requirements?
Every state has unique LLC requirements, but Maryland is generally considered to have few notable differences from other states.
Can a Maryland LLC elect for a fiscal year other than the calendar year?
Yes, a Maryland LLC can elect for a fiscal year other than the calendar year by filing Form 1128 with the IRS.
Can I use a PO Box as the address for my LLC in Maryland?
No, a PO Box cannot be used as the address for the registered office of an LLC in Maryland.
How do I search for existing LLCs in Maryland?
You can search for existing LLCs in Maryland on the Secretary of State’s website.
Can I convert my existing business into an LLC in Maryland?
Yes, you can convert your existing business into an LLC in Maryland by filing Articles of Conversion with the state.
What is an LLC?
LLC stands for Limited Liability Company.
Is an LLC recognized in Maryland?
Yes, Maryland recognizes LLC.
How do I start an LLC in Maryland?
You can start an LLC in Maryland by filing Articles of Organization with the Maryland Department of Assessments and Taxation.
Is there a fee to register an LLC in Maryland?
Yes, the fee to register an LLC in Maryland is $100.
Can I file a paper form to register an LLC in Maryland?
Yes, you can file a paper form to register an LLC in Maryland.
What name can I choose for my LLC in Maryland?
You can choose any name that is not already taken or infringes on someone else’s trademark.
How long does it take to register an LLC in Maryland?
It takes around 7-10 business days to register an LLC in Maryland.
Can I reserve a name for my Maryland LLC?
Yes, you can reserve a name for your Maryland LLC by filing a name reservation application and paying a fee of $25.
Do I need a registered agent for my LLC in Maryland?
Yes, you are required to have a registered agent for your LLC in Maryland.
Can I be my own registered agent for my Maryland LLC?
Yes, you can be your own registered agent for your Maryland LLC.
Can an LLC be taxed as an S Corporation in Maryland?
Yes, an LLC can be taxed as an S Corporation in Maryland.
Do I need to collect sales tax for my Maryland LLC?
Yes, you need to collect sales tax for your Maryland LLC, depending on the products or services you offer.
What licenses and permits do I need for my Maryland LLC?
The licenses and permits you need for your Maryland LLC depends on the type of business you have.
What is a Maryland tax ID number?
A Maryland tax ID number is a number given to your LLC for tax purposes.
Where can I get a Maryland tax ID number?
You can get a Maryland tax ID number by applying for it on the Maryland Comptroller’s website.
Can I file my Maryland LLC taxes online?
Yes, you can file your Maryland LLC taxes online.
What is Maryland’s corporate income tax rate?
Maryland’s corporate income tax rate is 8.25%.
When is the deadline for Maryland LLCs to file their taxes?
The deadline for Maryland LLCs to file their taxes is April 15th.
What are the benefits of having an LLC in Maryland?
The benefits of having an LLC in Maryland include limited liability protection and pass-through taxation.
What is the Maryland Personal Property Return?
The Maryland Personal Property Return is a form used to report and pay personal property tax in Maryland.
Do I need to file a Maryland Personal Property Return for my LLC?
Yes, you may need to file a Maryland Personal Property Return for your LLC depending on the assets your LLC owns.
What is the business personal property tax rate in Maryland?
The business personal property tax rate in Maryland is 2.6%.
What should I do if I need to make changes to my Maryland LLC?
If you need to make changes to your Maryland LLC, you should file Articles of Amendment with the Maryland Department of Assessments and Taxation.
Do I need to file an annual report for my Maryland LLC?
Yes, you need to file an annual report for your Maryland LLC.
What is the fee for filing an annual report for a Maryland LLC?
The fee for filing an annual report for a Maryland LLC is $300.
What is the penalty for not filing an annual report for a Maryland LLC?
The penalty for not filing an annual report for a Maryland LLC is $100.
How do I dissolve a Maryland LLC?
You can dissolve a Maryland LLC by filing Articles of Dissolution with the Maryland Department of Assessments and Taxation.
What is the fee for dissolving a Maryland LLC?
The fee for dissolving a Maryland LLC is $100.
What happens if I don’t dissolve my Maryland LLC but stop doing business?
If you don’t dissolve your Maryland LLC, you may still be subject to taxes and fees.

Also Read

How Fast Can I Form an LLC in Maryland

The good news is that forming an LLC in Maryland can be a relatively quick process. In fact, many entrepreneurs are surprised to learn just how streamlined and efficient the process can be. With the right resources and a clear understanding of the steps involved, you can form your LLC in Maryland in a timely manner without unnecessary delays or complications.

One of the first steps in forming an LLC in Maryland is choosing a name for your business. Keep in mind that the name you select must be unique and not already in use by another business entity in the state of Maryland. Once you have a name in mind, you can perform a search on the Maryland Department of Assessments and Taxation website to see if your chosen name is available.

After securing a name for your LLC, the next step is to file the necessary paperwork. In Maryland, this involves submitting Articles of Organization to the State Department of Assessment and Taxation. These documents outline key details about your LLC, such as its name, address, registered agent, and purpose.

Once your Articles of Organization are filed and approved, you’ll need to obtain an EIN, or Employer Identification Number, from the Internal Revenue Service. This unique number is used to identify your business for tax purposes and is essential for conducting financial transactions as an LLC.

In addition to these basic steps, you may also need to obtain any necessary licenses or permits to operate your business legally in Maryland. Depending on the nature of your business, these may include local or state-specific permits or licenses.

Overall, the process of forming an LLC in Maryland can typically be completed within a few weeks. While individual timelines may vary based on factors such as the complexity of your business structure or the volume of filings being processed by the state, most entrepreneurs find that the process moves smoothly and efficiently.

In conclusion, if you’re looking to establish an LLC in Maryland, rest assured that the process can be relatively quick and straightforward. By following the necessary steps and ensuring that your paperwork is in order, you can get your business up and running in no time. With a little bit of patience and diligence, you’ll be well on your way to building a successful business venture in the state of Maryland.

Conclusion

In conclusion, starting an LLC in Maryland is a strategic choice for entrepreneurs seeking a flexible, straightforward business structure with limited liability protection. By following the essential steps, including choosing a business name, filing Articles of Organization, appointing a Resident Agent, creating an Operating Agreement, obtaining an EIN, and securing the necessary licenses and permits, you can successfully establish your LLC. This business structure offers numerous advantages, such as pass-through taxation and ownership flexibility, making it an attractive option for small business owners looking to grow and protect their ventures. As always, consult legal and business professionals for guidance specific to your situation and state requirements.

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