Limited Liability Company or LLC, cited from Investopedia, is a business structure in the United States where it protects its owners from personal responsibility for its liabilities or debts. There are a number of requirements for getting LLC. Besides, there are also fees for getting it. How much is it? Here is the explanation about the cost and also some other things that you need to know about getting LLC in Maryland.
Things to Know to Set Up Your LLC in Maryland
There are several things that you need to do to set up your LLC. Those are giving a name to your business and registering it, hiring a resident agent, filing your articles of organization, applying for a business identification number and making an operation agreement. Here are the details of them according to Forbes and Market Watch.
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Giving a Name to Your Business and Register It
Giving a name to your business is a must. Have you thought about it? If you have a name for your business, you need to check whether or not your LLC name is available to be used. If it is available, but you are not ready to get your LLC yet, you are able to hold a business name for up to 30 days where it can be done by filling a Corporate Name Reservation Application. The fee for it is $25 and for quickening the process, you can pay for an additional $20. For your information, the state forbids new companies to use names which have been used or names which cannot be distinguished from the existing ones. Note that when you give a name to your company and register it, you need to comply with the requirements where you have to add an LLC designation to your formal name. You can add L.L.C., L.C., LC, LLC, or Limited Liability Company at the end of your company’s legal name.
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Hiring a Resident Agent
Besides giving a name, you also need to have a resident agent or a registered agent. Who can be a resident agent? It can be an owner or employee. He or she needs to be at least 18 years old and a resident of Maryland. A Maryland corporation or LLC is also able to act as resident agent. You can also hire a specialized company to act as your resident agent. The cost of the service is around $100 and $300 per year.
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Filing Your Articles of Organization
You are able to get your LLC online because this method is faster. It can be done on the website of Maryland Business Express. For your LLC, instead of using PO Boxes, you need to use a street address. Alternatively, you are able to complete an Articles of Organization form. When you fill out the article of organization, you need to detail the purpose of your company, legal name, and its physical Maryland address and also provide the name, signature and Maryland address of your LLC’s resident agent. Then, mail it to this address:
Department of Assessments and Taxation
301 W. Preston St.
Baltimore, MD 21201-2392
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Applying for a Business Identification Number
Now, you are able to get an Employer Identification Number (EIN). EIN is also known as a Federal Employer Identification Number (FEIN), or Federal Tax Identification Number (FTIN). It works the same way as Social Security Numbers, but SSN is for identifying individuals, meanwhile EIN is for identifying business. You can get it from the official IRS website. If your business has a single member and you do not have employees, you are able to use your Social Security Number. EIN can be obtained before you hire employees, open a business bank account, apply for startup funding, or file business taxes. By applying EIN, it can protect the privacy of your SSN from the search activity which is related to the business.
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Making an Operating Agreement
Even though an operating agreement is not required, it is a helpful guide and it will be able to minimize future disputes with your business partners. Besides, it can also give legitimacy to your business. In an operating agreement, it explains about the ground rules about how you want to run your LLC including how the business will run day by day, the amount of money that every member will need to contribute, how losses will be divided, duties and responsibilities of each member, etc.
The Fee to Get an LLC in Maryland
In Maryland, if you want to get an LLC, the main fee is $100. If the submission is done online, it takes around 7 business days to be processed, but if the submission is done through paper, it takes four to six weeks. However, as explained on Forbes, you are able to pay an additional $50 for paper filings if you want it to be processed faster within 7 days. You are able to get a certified copy of your document where it costs $20 and $1 per page. If you also want to get a Certificate of Status at the time of filing, you are able to pay $20.
Well, even though getting an LLC in Maryland costs $100, you need to prepare more than that for other payments as explained above. You will also need to file an annual report and pay a $300 annual fee. Besides, you may also need to pay for some other things such as business insurance, professional and local licenses, and some other things.
According to the Northwest Registered Agent, if you are in a hurry, you are able to pay an extra $425 for rush filing. If it is received before 2:30 pm on a business day, it will be processed within 3 hours, but if it is received after 2:30, it will be processed at the end of the business day the next day. Below is the explanation of some other fees according to the Northwest Registered Agent site.
Annual Report Fee in Maryland
As explained above, you will need to pay an annual report fee of $300. The annual report is due April 15th. You are able to file it online, by mail, or in person. Let’s say that your business has, leases, or uses personal property in the state or has a trader’s license. If so, you will have to submit a Personal Property Tax Return with your annual report and pay the applicable personal property tax. How much is the Business Personal Property Tax? It will be determined by the value of your business property and the county where you run your business.
Registered Agent Fee in Maryland
It is explained in the MD Code §2-108 that all corporations and LLCs in Maryland need to have a resident agent or registered agent. Their job is to accept important legal mail on behalf of your business and forward it to you. If you have a Maryland registered agent, they need to have a physical office in the state. For your information, there are a lot of business owners who hire a professional registered agent service. The fee for hiring them may be different. For example, in Northwest’s Registered Agent, the fee is $125 per year.
The Fee of Local Business License in Maryland
You need to know whether or not your business needs any local licenses by contacting your local Clerk of the Circuit Court. A trader’s license is the most common local license in Maryland. This license is needed if your business runs in buying and reselling goods. How much does this license cost? It depends on the wholesale value of your retail inventory where it ranges between $15 to $800. In Baltimore City, it is up to $2,125.
The Fee of Professional Licenses in Maryland
There are a lot of businesses that need some professional licenses where the fees vary by occupation. Let’s take an example. An architecture firm in Maryland must pay $100 for an Architects Firm Permit from the Department of Labor, and every architect in the firm needs to have an architect’s license where the fee is around $76 to $126.
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