Cost to form a Maryland LLC - $100
Recurring Fees - $300 Annual Report Fee
Filing Time - It normally takes 4-6 weeks for the LLC paperwork to be approved in Maryland. Expedited processing is also available for an additional fee.
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The Limited Liability Company (LLC) is a popular business entity choice structure for many businesses starting in Maryland. The LLC provides personal liability protection and has the potential to save money on taxes. With a little research, you can learn how to form an LLC in Maryland without an attorney.
Unlike a sole proprietorship or partnership where the small business owner can be held personally liable for lawsuits against the business, the LLC is a separate legal structure, protecting for the business owner’s personal assets.
Related: How Does an LLC Protect You?
Besides the liability protection, the Limited Liability Company provides several other benefits over the sole proprietorship, partnership, and corporation because of the multiple tax options, ease of administration and management flexibility.
Forming an LLC in Maryland is something most people can do on their own, but it’s nice to have some support in case you have questions or get stuck. IncFile and Inc Authority provide LLC formation guidance for only the cost of the state fees!
The filing fee for an LLC is $100 for standard processing and filing typically takes 4-6 weeks for standard processing and 1 week for expedited filing. The cost for expedited processing is an additional $50.
HOW TO FILE THE ARTICLES OF ORGANIZATION AND FORM A MARYLAND LLC
The steps for filing online or by mail are largely the same. The screenshots show filing online.
Step 1: Create a New Business Filing
To start with the LLC formation process, after registering for an account, go to “Click Here to Create a New Business Filing” on the home page.
Step 2: Select the Business Type
Select the type of business entity you wish to form. In this case, select “Limited Liability Company”
Step 3: Filing Options
On the next screen, you are asked if you prefer to upload your own documents or use the online forms. Most LLCs will choose “I will use the online forms”
Step 4: Name the LLC
Enter the name you want for the LLC. This will start an LLC name search to see if the name is available. The name of the LLC also has to be different from other entities registered with the Maryland Secretary of State.
The name of the LLC must also include one of the following designators at the end of the business name:
- Limited Liability Company
- L C
If the LLC name you want is available, you will be able to proceed to the next step, otherwise a message saying the name cannot be used in the State of Maryland and to enter another business name will show up. You may also want to see if a domain name is also available to have a matching website address.
Step 5: Business Information
In this section, enter the street address, city, state, county and zip code of the initial principal office. This address can be the physical address of the LLC or it can be the address where the business records are stored. This may not be a PO Box. If there is a mailing address that is different from the business address, click on the box and enter that address.
Enter the email address and phone number of the main contact should the Secretary of State have questions about filing the LLC.
Description of Business
This is an optional section but is asking for a brief description of what the business does. One to two sentences will be sufficient.
Step 6: Registered Agent
To form an LLC, a Registered Agent in Maryland will need to be identified. The Registered Agent can either be a resident of Maryland (select “Individual” under “Registered Agent is”) or a registered agent service (select either “Maryland Corporation” or “Maryland LLC” under “Registered Agent is”) The Registered Agent must have a physical address in the state to act as a point of contact to receive legal documents, tax notices, summons, subpoenas, etc on behalf of the LLC. A PO Box won’t be accepted
Even though the business owner can be the registered agent, their name and address become public record and with that comes a loss of privacy. This is more important for some entrepreneurs, especially when they are doing business from home.
Step 7: Contact Information
If there is another person that should receive any contact information from the Secretary of State (usually an accountant or attorney) enter their contact information in this section. If there isn’t a person, just skip and hit the “Continue” button.
Step 8: Review
Review that the information is correct. When ready, click on “Proceed to Certification”
Step 9: Sign and Certify
Authorized Persons – Have a person authorized to sign on behalf of the LLC (member, attorney, etc), sign the Articles of Organization. At least one person must sign.
Resident Agent Certification – Click on the box to certify the Resident Agent agrees to be the Resident Agent for the LLC.
Filing Party – Enter the name and address of the person filing the articles. This may be the same person as the authorized person and resident agent.
Certified Copy – Click on the check box if you want to receive a certified copy of the articles. A certified copy will cost $20 plus $1 per page.
Step 10: Pay and File
Pay and file the Articles of Organization.
If mailing the LLC form, send the Articles of Organization and payment to:
Department of Assessments and Taxation
301 W. Preston Street; 8th Floor
Baltimore, MD 21201-2395
If you have questions, contact the Maryland Secretary of State by phone at 410-767-1340 or email email@example.com.
Professional services like IncFile and IncAuthority help guide you to make sure it’s done right and you only pay the normal state fees.
Check out our reviews of popular LLC formation services to learn more.
Tasks After Forming Your LLC
Once the LLC has been formed, there are a few additional steps to take care of. Below is a list of the most common tasks.
Prepare an Operating Agreement
The operating agreement is a document that governs the framework of an LLC. This document covers items like ownership rights, member responsibilities, how profits and losses are distributed and more.
Most states do not require an LLC to have an operating agreement but it is still worth considering. Without an operating agreement:
- The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit
- Member’s personal liability protection may be diminished
- Members may not have a full understanding of their roles and responsibilities which could lead to costly disputes in the future
Obtain an EIN
The EIN or Employer Identification Number is a unique 9-digit number for a business. Similar to a social security number for an individual, the EIN identifies business entities for tax purposes.
The EIN will be needed in order to open a bank account, register for business licenses and permits, file tax returns, pay payroll taxes and more.
Related: How to Apply for an EIN
Open an LLC Bank Account
Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.
Several documents will be needed to open a business bank account such as:
- A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
- Copies of the original formation paperwork from the state showing the creation of the LLC.
- Driver’s licenses of the members.
- Depending on the age of the LLC, a Maryland Certificate of Good Standing may be needed to prove the LLC is active and in good standing with the state.
Apply for Business Licenses and Permits
Depending on what your business does and where it is located, there will likely be a variety of business licenses and permits to register for before starting. Some common registrations include:
- Business License – Some cities require businesses to obtain licensing before they can start. In some cases, even home-based businesses must have licensing in order to legally operate.
- Professional License – Certain services such as barbershops, accountants, salons and others must be licensed.
- Sales Tax License – In order to sell products and certain services, registration with the Comptroller of Maryland will be necessary.
File Annual Reports
LLCs are required to file an annual report with the Maryland State Department of Assessments and Taxation. The annual report updates ownership information and other details.