How to File an LLC in Maryland

A Limited Liability Company (LLC) is a type of company that offers tax advantages and asset protection for its owners. Maryland is a good state to form a Limited Liability Company (LLC) because it has a vibrant economy. In addition, filing an LLC in Maryland is also quite easy. If you have a plan to start your company and are interested in forming a Limited Liability Company (LLC) in Maryland, you should read the entire text in this article. Here, you will get the information you need about filing a Limited Liability Company (LLC) in Maryland.

What is a Limited Liability Company (LLC)?

A Limited Liability Company (LLC) is a type of company offering strong liability protection for its owners and a pass-through taxation structure. This type of company allows its owners to avoid the double taxation normally associated with corporations. If you have formed an LLC, then for example you experience bankruptcy or legal disputes with the business, then you will get protection of personal assets such as bank accounts, houses, and cars. This is the reason why Limited Liability Companies (LLCs) are highly desirable, especially for those with small and medium-sized businesses.

As we said earlier, Maryland is a good state to form a Limited Liability Company (LLC). That is because Maryland has a vibrant economy and filing an LLC in Maryland is quite easy. For information, the detailed requirements for forming a Limited Liability Company (LLC) in Maryland are listed in the Maryland LLC Act. The law explains that a Limited Liability Company (LLC) can conduct various activities related to business, investment, or other lawful activities. In addition, the Act also describes some of the requirements for operating an LLC in Maryland. For more details on the detailed requirements for forming a Limited Liability Company (LLC) in Maryland, you can check the Maryland LLC Act.

If you have registered your company as a Maryland LLC, then you will have the freedom to establish your company in the way that is best for you. You can form a Limited Liability Company (LLC) in Maryland without time limits. And, you can also stop its activities at your will or after a certain period of the time. Moreover, you can also sign contracts or conduct other business as specified.

Filling an LLC in Maryland – Here’s Guide

Filing a Limited Liability Company (LLC) in Maryland is quite easy. If you have learned the pros and cons of LLC in Maryland, and are determined to file an LLC in Maryland, then it is time to start action.

Here are some steps to start filling an LLC in Maryland:

1. Choose a Name for Your LLC

The first thing you must do when you want to fill an LLC in Maryland is to choose a name for your LLC. So, come up with a good name for your LLC. In giving your LLC a name, you must comply with the state’s naming requirements. There are some rules when choosing a name for your LLC.

Here are some of the requirements:

• • Your LLC name must include the word “limited liability company,” “L.L.C.,” “LLC,” “L.C.” or “LC.”
  • Your LLC name is different from all others. You can check the Secretary of State’s website to find out if a particular business name is already in use or not. For business name availability in Maryland, check this link: https://egov.maryland.gov/businessexpress/entitysearch
  • Your LLC name must not use words to name government agencies such as the State Department, Treasury Department, FBI, CIA, etc.
  • If your LLC name uses certain restricted words, such as doctor, lawyer, bank, or credit union, then you must provide additional documentation and license documents.

Additional considerations:

• • URL availability

If you do not think you need a web page now, you might need one in the future. So, consider buying your domain name from right now. Before finalizing your LLC name, you should check URL availability.

• • Reserve your name

Even if you are not ready to register your LLC, you can reserve your LLC name from now on so that your LLC name is not taken by someone else. In Maryland, you can reserve the name for your LLC for up to 30 days by paying a fee and submitting the appropriate form to the state authorities. For your information, the standard fee is $25. To speed up the process, an additional fee of $20 is required.

2. Choose a Resident Agent for Your LLC

To file a Limited Liability Company (LLC) in Maryland, you must also select a Resident Agent for your LLC. For your information, Resident is also called a Registered Agent. This Resident Agent has the responsibility to accept service of process and gather legal documents on behalf of your Limited Liability Company (LLC), including providing legal documents to anyone suing your LLC.

As a company owner, you can act as a Resident Agent for your LLC. Or, you can also appoint one of your employees as a Resident Agent. Keep in mind that the requirements to be a Resident Agent are to be over 18 years old and a resident of Maryland. If you or your employees do not wish to serve as Resident Agent, then you can designate another Maryland corporation or LLC to serve as resident agent for your LLC.

We have received information that there are some LLCs that hire special companies to act as Resident Agents. If you have problems choosing a Resident Agent for your LLC, perhaps you can also hire a special company to act as a Resident Agent. Generally, you will have to spend between $100 and $300 per year for this service. However, there are also some companies that offer this service for only $50.

In essence, there are several criteria in choosing a Resident Agent, such as:

• The company must provide resident agent services.
• An Agent must be over 18 years of age.
• An Agent must have an address in Maryland State.
• An Agent must be available to receive documents during business hours

3. File Your Articles of Organization

The next way to file an LLC in Maryland is filing your Articles of Organization that describes the characteristics and fundamental information about your Limited Liability Company (LLC). So, prepare the Articles of Organization and file them with the Maryland State Department of Assessments and Taxation (SDAT) to register your LLC in Maryland properly. There are some methods to file the Articles of Organization; in person, online, or by mail.

• In Person

If you would like to fill out the Articles of Organization in person, you should know that this service is available for an additional $425 fee. For further information regarding time periods and limitations, you can check the SDAT website

• Online

To file your Articles of Organization online, you can visit the Maryland Business Express portal at https://businessexpress.maryland.gov/. The cost is $100. You may pay additional fees to request expedited processing. On the Business Express website, you can find more information about application fees and processing turnaround times.

• By Mail

To file the Articles of Organization by mail, you can mail a form to:

State Department of Assessments and Taxation
Corporate Charter Division
301 W. Preston Street
Baltimore, Maryland 21201

To prepare your Articles of Organization, you will need the following information:

• The name of LLC
• The purpose of LLC
• The address of LLC
• The name and address of Resident Agent
• The start date of your business
• The name and address of the person forming LLC
• The signature of the person forming LLC
• The signature of Resident Agent.
• The management structures

You can pay $100 for filling an LLC in Maryland. Filing an LLC online takes approximately seven business days. Meanwhile, submissions in paper form take around four to six weeks. You can pay an additional $50 fee for paper filing to have it expedited and processed within seven days. You must pay $20 plus $1 per page for a certified copy of your document. And, for a Certificate of Status at the time of application, you can pay $20.

4. Receive a Certificate from the State

Once the LLC formation documents in Maryland are filed and approved, the state will provide you with a certificate confirming that your LLC has officially been formed. This certificate allows your LLC to get an Employer Identification Number (EIN), business license, and business bank account. So, make sure you receive a certificate from the state.

Once you have successfully established an LLC in Maryland, there are several additional steps you must take. Some of them are not legally required. However, we strongly recommend that you take these additional steps as they will contribute to your company’s long-term success.

5. Create an Operating Agreement

An additional step to filing and forming an LLC in Maryland is creating an Operating Agreement. Indeed, legally, you are not required to enter into an Operating Agreement. However, this Operating Agreement is a useful step in establishing your LLC in Maryland. For your information, an operating agreement is a document that explains how your LLC will run business. The Operating Agreement also ensures that all LLC members understand and agree to their rights and responsibilities.

The following is some information that must be included in the Operating Agreement:

• LLC’s name and principal address
• Duration of the LLC
• Name and address of your Resident Agent
• Your LLC’s Articles of Organization
• The purpose of LLC
• The members of your LLC and their roles
• How profits and losses are distributed
• LLC’s management
• Indemnification and liability clauses
• Procedures about accepting new members and exiting members

6. Obtain an EIN (Employer Identification Number)

The next additional step to filing an LLC in Maryland is obtaining an EIN. The Internal Revenue Service (IRS) assigns a nine-digit Employer Identification Number (EIN) to identify your LLC regarding tax payments. So, you can get an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). Sometimes, an Employer Identification Number (EIN) is also referred to as a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number (FTIN). To get an EIN for free, you can do that through the official website of IRS. Or simply, you can click this link; https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online.

There are several things you can do after getting an Employer Identification Number (EIN):

• File and administer taxes at the state and federal level
• Hiring employees
• Open a business bank account

In other cases, if your LLC consists of only one member, meaning you have no employees, then you can use a Social Security number.

7. File an Annual Report

Once you successfully form an LLC in Maryland, you must file an annual report. Keep in mind that in Maryland, all LLCs must file an annual report and Personal Property Tax Return with the Maryland State Department of Assessments and Taxation (SDAT). You can file your annual report electronically through Maryland Business Express (MBE) or by mail. The deadline for submitting this form is April 15 every year. The annual filing fee is $300, and this annual fee does not include the LLC’s state tax liability.

Pro and Cons of the Limited Liability Company (LLC) in Maryland

Before you decide to file an LLC in Maryland, you should first know the pros and cons of the Limited Liability Company (LLC) in Maryland. Although LLCs offer asset protection to company owners, which makes people want to form LLCs, but in fact, LLCs also have some cons, which you should really consider before deciding to file an LLC in Maryland.

Here are pros of LLC in Maryland:

• • All LLC members in Maryland receive strong personal asset protection.
  • There is no double taxation on LLCs in Maryland.
  • All LLC in Maryland have flexibility in operational procedures and management structures.
  • Establishing an LLC in Maryland does not require a principal place of business in Maryland.
  • Maryland LLCs do not require residency requirements for directors, officers, or shareholders.
  • Maryland is a state that provides a business climate that supports access to the workforce and proximity to key markets.

Before you file for an LLC in Maryland, you should learn the implications of this business structure. And, you should also understand how it will affect you and your business later so that you do not make the wrong decision.

Here are some cons of LLC in Maryland:

• • All LLCs in Maryland must pay an annual franchise tax, which is based on the LLC’s gross income.
  • All LLCs in Maryland must make detailed annual reports and filing fees.