How to Start an LLC in Maryland

Key Benefits

1

Personal Asset Protection

An LLC provides a legal barrier between your personal assets and business liabilities, protecting your savings, home, and other personal property from business debts and lawsuits.

2

Tax Flexibility

LLCs offer pass-through taxation by default, meaning business income passes through to your personal tax return, avoiding double taxation while providing options for how you're taxed.

3

Management Freedom

Maryland LLCs provide flexibility in management structure, allowing you to choose between member-managed or manager-managed operations to suit your business needs.

Formation Process

Select a Unique Name for Your Maryland LLC

The initial step to create your Maryland LLC is to choose a name that is not used by another company. You can check if your name is available using the Maryland Business Entity Search tool by the Department of Assessments and Taxation (SDAT).

Required Words: Your company's name should contain the words "Limited Liability Company," or an abbreviation like "LLC," "L.L.C.," "Limited," or "Ltd."
Prohibited Words: The name may not contain prohibited words like "Agency," "Board," "Bureau," "Commission," "Department," or "Municipal."
Government Association: You can't use words that might create confusion of your business with a government one, e.g., "State Department," "FBI," or "Treasury."
Domain Name: It's a recommended practice to verify that the domain name for your LLC is available to make your web presence coincide with your brand.

Select a Resident Agent for Your Maryland LLC

Every Maryland LLC is mandated to have a Resident Agent. The Resident Agent serves to receive necessary documents, such as government notifications, tax documents, and legal documents on behalf of your business.

Agent Requirements

This person or service must reside in Maryland and be open to accept documents within regular business hours. You may serve as your own Resident Agent, designate another member of your LLC, or use a professional service.

Professional Services

Utilizing a professional service is convenient and guarantees compliance with state regulations. Many business owners prefer this option for the privacy and reliability it offers.

Recommended Resident Agent Services

ZenBusiness

ZenBusiness is one of the most popular services and simplifies the process of LLC formation. It provides a comprehensive LLC registration package and a professional Resident Agent service for $199 per year. Its platform also offers simple LLC document access, keeping your company organized and in compliance.

Efficient and swift LLC registration
Compliance service with no worry
Great ratings and customer reviews

Cons: No support for Nonprofit LLCs.

Northwest Registered Agent

Northwest Registered Agent is an experienced service that offers excellent customer support. They charge $125 annually for Resident Agent services and provide a secure online portal to manage your LLC's documents.

A+ Better Business Bureau rating
Data security and privacy-focused service
Nationwide support for LLC formation and compliance

Cons: Higher initial costs for LLC registration.

File Your LLC with the State of Maryland

Once you have your Resident Agent and name arranged, it's time to actually file your LLC with the state. You can file your Articles of Organization online or by mail.

Filing Fee

Your filing fee for your Articles of Organization in Maryland is $100.

Processing Times

Filings done online take approximately 7 business days to process. Mail filings are processed in 4-6 weeks, but you can speed up your filing for an extra $50, cutting processing time to 7 business days.

Filing Options

Online Filing: The quickest way to file your LLC with the Maryland Department of Assessments and Taxation (SDAT). It's also expedited, so it gets processed within a few days.
By Mail: You can send your Articles of Organization to:
Department of Assessments and Taxation
301 W. Preston Street
Baltimore, MD 21201-2392
In-Person: In-person submissions can lead to same-day processing, Monday through Friday, from 8:30 AM to 4:30 PM.

Post-LLC Formation Checklist

After your LLC is officially formed, it's a good idea to do a few more things to keep your business in order and compliant:

Separate Personal and Business Finances: To safeguard your personal assets, don't commingle personal and business funds. Open a business bank account for your LLC and keep all business transactions separate.
Get Business Insurance: Buy general liability insurance, which can safeguard your LLC from future lawsuits or claims. Workers' compensation insurance is also a good idea if you have workers, as it insures them for on-the-job injuries or illnesses.
Get an Accountant: An accountant can assist you with your business finances, making sure you get taxes done correctly and don't incur penalties. They can also handle bookkeeping, payroll, and financial planning.
Consider an Operating Agreement: While not necessary in Maryland, it is greatly advisable to create an LLC Operating Agreement. This agreement states the ownership structure, duties, and operating procedure for your LLC to avoid future conflicts between members.

After Formation

Once your LLC is established, take these important steps to maintain good standing and protect your business:

Open a Business Bank Account

To safeguard your personal assets, don't commingle personal and business funds. Open a business bank account for your LLC and keep all business transactions separate. This is crucial for maintaining the liability protection that your LLC provides.

Get Business Insurance

Buy general liability insurance, which can safeguard your LLC from future lawsuits or claims. Workers' compensation insurance is also a good idea if you have workers, as it insures them for on-the-job injuries or illnesses. This provides an additional layer of protection beyond the LLC structure itself.

Get an Accountant

An accountant can assist you with your business finances, making sure you get taxes done correctly and don't incur penalties. They can also handle bookkeeping, payroll, and financial planning to ensure your business remains financially healthy.

Create an Operating Agreement

While not necessary in Maryland, it is greatly advisable to create an LLC Operating Agreement. This agreement states the ownership structure, duties, and operating procedure for your LLC to avoid future conflicts between members by clearly defining roles and responsibilities.

FAQs

How much does it cost to register an LLC in Maryland?

The filing fee for the Articles of Organization is $100. If you choose to expedite the process, there is an additional fee of $50 for faster processing.

Do I need a DBA (Doing Business As) for my LLC?

In Maryland, you do not have to file for a DBA unless you will be doing business in a different name than your actual business legal name. In this case, you will be required to register your DBA with the Maryland Department of Assessments and Taxation.

How long does Maryland take to process filing the Articles of Organization?

Filings online take 7 business days, but filings by mail will take about 4-6 weeks. You can have expedited processing for an additional cost of $50, making the time only 7 business days. In-person filings will sometimes be the same day.

May I act as my own Resident Agent in Maryland?

Yes, you can act as your own Resident Agent in Maryland, provided you have a Maryland physical address and are present to accept documents during regular business hours. Most businesses, though, prefer to hire a professional service for the added convenience.

Do I need an EIN for my Maryland LLC?

Yes, if your LLC employs people or when you're setting up a business bank account, you will want to get an Employer Identification Number (EIN) from the IRS. You will need to have an EIN in order to file business taxes.

Must I file a Maryland annual report?

Maryland makes LLCs submit an annual report to the Department of Assessments and Taxation. The report filing fee is $300, and it's due annually by April 15.

What do I do if I need to make a change to my LLC name or other information?

If you must make a change in the name, address, or Resident Agent of your LLC, you will need to file an Amendment to your Articles of Organization with the Maryland Department of Assessments and Taxation. There is a nominal fee for filing amendments.

Ready to Start Your Maryland LLC?

Take the first step toward establishing your business with the protection and benefits of an LLC structure. By taking these steps, you will be able to form your LLC in Maryland and implement the necessary steps to shield your business.

Get Started Today

How to Form an LLC in Maryland