How to Start an LLC in Maryland: If you’re interested in setting up an LLC in Maryland, you’ve come to the right place. Having an LLC not only protects your personal assets but also is less complicated than other business structures. Maryland laws make it easy to establish your LLC in Maryland. On this page, You’ll find all the steps that must be taken to ensure that your Maryland LLC has been correctly established. We recommend you read the whole article very carefully word by word, don’t miss anything 🙂
On this page, you’ll learn about the following:
- How to Start an LLC in Maryland
- After Starting Your Maryland LLC
- Maryland Foreign LLC
- Maryland LLC Formation Review
How to Start an LLC in Maryland
An LLC or a Limited Liability Company is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection.
If you wish to start an LLC in Maryland, mainly you have to file your Certificate of Formation with the State and pay a filing fee of $100. There are some more steps to follow to get your LLC established in Maryland. The following steps explain everything you need to create your LLC in Maryland in 2022. Let’s get started!
Step 1: Decide a Name for Your Maryland LLC
The very first step while forming an LLC in Maryland is to give a proper name to your LLC. Before you name your business, you must know that the name should be easy to remember, available in the state, and follows all the LLC naming guidelines.
Maryland LLC Naming Guidelines
There are a few specific requirements all the LLCs in Maryland have to follow while naming their Company. Some of the most important requirements are as follows:
- Your business name should be available and no other existing business in Maryland can have the same name. Perform a name search from the below-mentioned source to be sure your name isn’t taken already.
- “Limited Liability Company”, “LC”, “L.C.”, “LLC”, and “L.L.C.” – any one of these has to be used as a suffix in your business name.
- You cannot use any name for your business that is confusing or misleading. Terms such as “Treasury”, “State Department”, “FBI”, “CIA”, etc. shouldn’t be included.
- Terms like “Bank“, “University“, “Attorney“, “Doctor“, etc can be added only after the additional requirements by Maryland State Government are fulfilled.
- (Optional) It’s better to name your business something for which your desired domain is available.
|Important Links –||Email Form to –|
|Maryland Business Entity Search – Online Search|
Maryland LLC Name Search – Instructions
Name Availability Standards – Guidelines
|Office of Secretary of State, |
By Phone: (410)-767-1802
Reserve Business Name for Future
If you do not wish to file your LLC right now but want to hold the name you have decided then you can reserve your LLC name for 30 days. To keep the name, you have to file a name reservation application and pay $20 to reserve your name with the Maryland Secretary of State.
Doing Business As (DBA) or Trade Name
Once you have a legal name for your LLC, you can register it. However, it is not mandatory. You can, instead, use DBA, Fictitious Name, or Trade Name. In that case, you must register your name with the Maryland Secretary of State by submitting a Trade Name Application in Maryland along with the filing fee of $25.
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Tailor Brands offer DIY website templates and incredible logo designs. If you plan to get a website then it is wise to have a “.com” domain for your business but these days you can also use other TLDs like “.company”, “.xyz” etc. With Tailor Brands, you can get everything you need at an affordable price.
It is not legally mandatory to use the word LLC in your domain name or email. If you want you can use it. However, it is recommended not to use LLC in the domain name. A domain name should be short and easy to remember.
Step 2: Assign a Registered Agent in Maryland
The second step to forming a Maryland LLC is to appoint a Registered Agent. A registered agent is a person or business entity that will act or work on your LLC’s behalf. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in Maryland. Hence, hiring a competent Maryland Registered Agent for your LLC is necessary.
Make sure your registered agent is a resident of Maryland or has a physical street address. Their business address or the principal address should be in Maryland. Most LLC formation companies also provide registered agent services. Below are two great LLC setup services, even if you buy their cheapest plan (normally $49/year) you also get registered agent service and other services at a reasonable price.
These LLC formation services are recommended registered agent services as they are authorized to conduct business in Maryland. Some LLC formation services offer standalone Maryland registered agent services. You can purchase only Registered Agent services from them without purchasing any other LLC formation services.
A person who is above 18 years of age and has a physical address in the state of Maryland can be a Registered Agent. A Registered Agent can be an independent person or can be a business entity. One who is responsible for handling all the legal documents.
Yes, you can be your own registered agent if you are a resident of the state of Maryland and you are above 18 years of age. To become a registered agent you must have the authority to conduct any type of business in Maryland.
Registered Agent Consent Application
In Maryland, there is no separate Consent Letter to be produced to the Secretary of State. At the time of change of Registered Agent (or the name or address), the new Registered Agent has to sign the consent letter. It comes with the Application form to Change the Registered Agent. The filing fee of $25 should be paid for it. For more information on the same, read our guide on Maryland Registered Agent.
Step 3: File Articles of Organization in Maryland
The third and most important step in forming a Maryland LLC is to file the Certificate of Formation. This Maryland Articles of Organization is a legal document needed to officially register your business with the Secretary of State. It costs $100 to file your formation certificate in Maryland. (Read more on LLC cost in Maryland).
The Certificate of Formation includes details like the name of the LLC, registered agent’s name, address, employees’ details, and structure of the company (member-managed or manager-managed). Before hiring employees in Maryland LLC, one should know about the rules and regulations thoroughly. Also if you are expanding your existing business (an LLC) to Maryland then you need to register as a Maryland Foreign LLC.
How to File Online
Go to the Secretary of State Online Service. You will get the online service page. If you are already a subscriber then click on the “log in to Subscribe Account” option and log in with your credentials. If you’re not subscribed, then you have to sign-up to start filing. Youn can do that by clicking on the “Sign-up for Online Filing” button below. Read more about the Maryland Articles of Organization for online registration.
How to File by Mail
If you prefer filing real-life forms for your Maryland LLC registration, then you can download Domestic LLC Formation Form. Read the form thoroughly, fill it out, and mail it to the following address,
CoState Department of Assessments and Taxation, Charter Division 301 W. Preston Street; 8th Floor
Baltimore, MD 21201-2395
Processing Time: It takes around 5 to 6 business days for online filing to form an LLC in Maryland. If filed by mail, it takes 4 to 6 weeks. By paying an additional fee, it can be expedited.
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Step 4: Create Your Maryland LLC Operating Agreement
Moving on to the fourth step, filing your operating agreement. An operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC. This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
When it comes to filing a Maryland LLC Operating Agreement, the state does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all the details of your business operation. Like Maryland, there are other states that do not have a mandatory rule to file operating agreements. But, this document would be useful if you decide to dissolve Maryland LLC later. Hence, having an operating agreement may not be necessary but it is definitely ideal.
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Step 5: Filing a Maryland LLC EIN
The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify the type of business for tax purposes and taxes in general. The EIN is necessary for any active business or any form of business for that matter.
EIN is needed when the LLC hires employees. Hiring employees in Maryland LLC requires following specific rules and regulations. On the other side, EIN for Maryland foreign LLC should be obtained if your LLC is based in other states.
To obtain EIN (aka FEIN) one has to fill up a form (Online or by mail) and submit it to the IRS. Enter details of your LLC, and finally complete the form and send it to the address given. You can also get an EIN Assistant who can help you with the process.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
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Tailor Brands – ($49 + State Fees) Online LLC Setup
Note: You don’t need a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
Congratulation, you are now done with all the necessary steps to form your Maryland LLC. If you do it yourself it should take you a long time to properly understand and do all the steps.
However, if you use TailorBrands it should take fewer hours and you always have live chat with expert support for any help you need.
After Starting Your Maryland LLC
After forming your LLC, there are still some things that you will need. Take note of the following:
- Get a company business bank account
- File Maryland business permits & licenses
- Get general liability insurance and professional liability insurance with coverage for employees
- File a Maryland LLC annual report or biennial report
This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.
Cost of Maryland LLC
Forming an LLC in Maryland is no doubt more cost-effective than other structures of a business. There are some fees and charges one has to bear to form a Maryland LLC. LLCs have pass-through taxation. Hence, your Maryland LLC won’t bring you a massive tax burden. Here are some of the fees and taxes are needed to be paid while forming an LLC in Maryland,
|Fees/Tax||Amount to be Paid|
|Name Reservation Fee (online/by mail)||$20|
|DBA Filing Fee||$25|
|Articles of Organization Fee||$100|
|Personal Property Return for Domestic LLC||$300|
|LLC Annual Fee||$300|
In Maryland, an LLC name reservation is not mandatory. You can register your LLC name at the time of registering your LLC. If you wish to hold the name for some time without registering your LLC, then you can do that online. Your LLC name will be reserved for 30 days without registering your LLC. It can be done by paying $25.
In Maryland, an Annual Report has to be produced every year. It costs $300. Also, the State of Maryland requires the Personal Property Return cost which is $300. Read our guide on LLC costs in Maryland for more information.
Maryland Foreign LLC
If you are interested in forming a Foreign LLC in Maryland then you need to file the Certificate of Foreign LLC to the Maryland Secretary of State. Foreign LLCs allow you to operate your business in more than one state. Along with the Certificate of Foreign LLC, you need to submit some more documents like the Certificate of Good Standing, etc. to the Maryland SOS to form your foreign LLC in Maryland. To know more in detail, check out our guide on Maryland Foreign LLC.
Reasons to Start an LLC in Maryland
Maryland reaches the 2nd position in the United States for having women-owned businesses. The share of such companies is around 39% of total companies. The state is growing faster and making its way to global charts for having a woman-owned business. With many incentive and business funding options like loan programs, reductions in tax liability, and other benefits, Maryland has become one of the leading business states in the USA. Read more on Maryland’s classification of tax.
Incentive Business Programs
- Job Creation Tax Credit – Maryland government offers $3000 to $5000 tax credit for each job. LLCs that open up employment opportunities manage to save huge amounts as the tax burden is much lower in Maryland.
- Enterprise Zones Incentive – Like other states, Maryland provides an incentive to operate in special enterprise zones. Up to $3000 is provided as incentives to the LLCs for operating in Enterprise Zone.
- RISE Zone Incentive – Regional Institutional Strategic Enterprise or RISE zones such as Baltimore City, Prince George’s, Baltimore, and some others. Starting your LLC here or operating them in these areas brings tac credits and other incentives.
Losing limited liability is not an easy task
There is a rule in many states that if the member of an LLC actively participates in the LLC’s managing tasks, they can lose their limited liability. This is a major reason many people have to think before choosing an LLC. But for LLC in Maryland, this rule vanishes away. In this state, no matter that the member is making decisions or not, the limited liability is safe.
Leverage real estate investment
The real estate investments for the LLC have many advantages. They can save money through major real estate taxes that the partnership and corporate have to pay. This leverages the LLC in Maryland over other states and is becoming an attraction for businesspeople. They can also think of investing in personal property with a minimal amount of tax.
Leading Industries in Maryland
Before you form an LLC in Maryland, you need to brush up on your knowledge. You should know in detail about the industries that have flourished in Maryland and their contribution to the State’s economy.
The employees that are working in the construction business of Maine have increased to more than 155,000. The main reason behind this is the booming business in the state. More than 90% of the companies are continuously earning huge profits and landing huge clients. All this is helping them to contribute 14.64% to the overall GDP of Maryland.
With 35 research parks and more than 400 companies, Maryland has become the best cybersecurity giant in the country. The Defense Information Systems Agency and NIST are now depending on the cybersecurity services provided by the companies of Maryland. The completion of the port Covington Research Park in Baltimore has changed the whole face of Maryland’s IT security.
After 1820 in Maryland, the manufacturing industries have started becoming a pillar of Maryland’s economy. The state is very well known for its steel production but is not just limited to that. There are many rising manufacturing businesses of men’s clothing, electronic items, surveillance and communication products, etc.
The country is a significant reason behind driving the economy by exporting around $9.74 billion of products and giving jobs to 13.2% of the state’s people.
If you look at the USA’s life-saving innovative industries, then most of them are in Maryland. According to the census, more than 2800 companies in the Pharma field are emerging in the state. These companies have formulated many life-saving drugs and have earned around $17 billion for the Maryland state.
Some small and innovative businesses that are established in Maryland are:-
- Pet sitting business
- Vending machines
- Quilt services
Maryland LLC Formation Review
Time needed: 5 minutes.
Just to recap, here are the easy steps again when forming an LLC in Maryland. Click on the steps in this list to read the full detail.
- Name your Maryland LLC
The first thing you must do is to choose a company name, which should be unique, easy to find, and available in the state.
- Choose a Registered Agent
In Maryland, it is mandatory to select a registered agent for your LLC. Get a professional Registered Agent from LLC formation services like NorthWest Registered Agent to get things done hassle-free.
- File a Formation Certificate
Filing a formation certificate is necessary when forming an LLC in Maryland. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create an Operating Agreement
An operating agreement is not a strict requirement in Maryland but something encouraged when you start an LLC to avoid future conflicts.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
How Fast Can I Form an LLC in Maryland
Filing for Maryland LLC via mail takes 4-6 weeks. While online filing is processed in a span of 5-7 days. You can speed up by paying an additional amount to the state.
When starting a new business, one of the first questions you may have is, “How fast can I form an LLC in Maryland?” The process can be long, but it can be completed as quickly as a few weeks. In this article, we’ll look at some of the key aspects to forming an LLC in Maryland. Here’s how fast you can get your documents filed. Listed below are the steps you should take to form an LLC in Maryland.
Choose a name for your company. Make sure the name has the words LLC, L.L.C., or limited liability company in it. Make sure it’s not already registered in the state, as there are certain restrictions for certain words. For example, you can’t use the names of any government agencies. You may want to use a more generic name, such as “Limited Liability Company Maryland,” but make sure it’s not too similar to a current business in the state. The state’s website will list available business names.
Once you’ve formed your LLC in Maryland, the next step is filing your business licenses. This is important because many states require you to get a business license and other legal documentation. Getting these documents can be time consuming and expensive, but they’re a necessary step in running a business. You can take advantage of free tax consultations offered by many accountants. And remember, after forming your LLC, you’ll need to apply for a Maryland business license.
When Should I File My LLC in Maryland? Once you have decided on a name, you need to follow the rules to form the company. You’ll need to list the business purpose in the name, and you’ll need a physical address (a PO Box won’t do) and a resident agent. If you have a bank account, you’ll need a resident agent. You’ll also need to register with the Department of Assessments and Taxation in Maryland. Finally, you’ll need to pay the fees to register your LLC.
If you’re looking for a fast way to form an LLC in Maryland, consider filing an application online. The Maryland Business Express website allows you to file documents online. All you have to do is sign up for an account and click “Register Your Business.” Your filing will be processed in seven business days, while regular processing takes between four and six weeks. To expedite the process, you’ll need to pay $50 to the Maryland Business Express. Alternatively, you can make your application in person and deliver the documents to the same address. Either way, the process will be expedited while you wait.
When Should I File My LLC in Maryland? In Maryland, LLCs must file an Annual Report by April 15 each year. Failing to file this report could result in administrative dissolution. Most banks will require your articles of organization and EIN, and some may even require an opening deposit. Some banks offer business checking accounts for a fee, and some may waive your monthly maintenance fee. In addition, the state of Maryland requires a personal property return and annual reporting. If you plan on hiring an employee, you can register for sales taxes.
If you are a resident of Maryland, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
Apart from the formation fee of $100 (domestic LLC) and $100 (foreign LLC), LLC costs in Maryland include $300 for Annual Reports every year. LLCs are liable to pay sales tax of 6% every year
It takes 5 to 7 business days to get an LLC in Maryland if you file it online. For the mail filing, it takes 4 to 6 weeks to get an LLC. If you hire a professional LLC service, then it might take less than that. We recommend Tailor Brands which has impeccable turnaround time.
Every year all the LLCs have to submit an Annual Report and pay $300 to the Maryland Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for the LLCs, it is a default tax structure. Once you will obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens. Read more on the Maryland Classification of LLC Tax.
LLCs are easier to establish than other business structures. Small businesses, especially start-ups can easily start an LLC in Maryland at a bare minimum cost. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. The formation of limited liability companies requires much lesser documents and legal processes. Share your queries with us, and leave a comment below.