Under Maryland law, an LLC name must contain one of the following: "limited liability company" or the abbreviation “L.L.C.,” “LLC,” “L.C.,” or “LC.’
Your LLC’s name must not be misleadingly similar to the names of other business entities already on file with the Maryland Department of Assessments and Taxation. Names may be checked for availability by searching the Maryland business name database.
Every Maryland LLC must have an agent for service of process in the state (called a resident agent in Maryland). This is an individual or business entity that agrees to accept legal papers on the LLC’s behalf if it is sued. A registered agent may be any Maryland citizen who is over eighteen, a Maryland corporation, or a Maryland LLC. The registered agent must have a physical street address in Maryland.
A Maryland LLC is created by filing Articles of Organization with the Maryland Department of Assessments and Taxation. The articles must include:
The articles may be filed by mail or online. The basic filing fee is $100 (an additional $50 expedited fee and 3% service fee is charged for online filings).
An LLC operating agreement is not required in Maryland, but is highly advisable. This is an internal document that establishes how your LLC will be run. It is not filed with the state. It sets out the rights and responsibilities of the members and managers, including how the LLC will be managed. It can also help preserve your limited liability by showing that your LLC is truly a separate business entity. In the absence of an operating agreement, state LLC law will govern how your LLC operates.
The operating agreement should include the following:
Additional tax and regulatory requirements may apply to your LLC. These may include:
EIN: If your LLC has more than one member, it must obtain its own IRS Employer Identification Number (EIN), even if it has no employees. If you form a one-member LLC, you must obtain an EIN for it only if it will have employees or you elect to have it taxed as a corporation instead of a sole proprietorship (disregarded entity). You may obtain an EIN by completing an online application on the IRS website. There is no filing fee.
Business Licenses: Depending on its type of business and where it is located, your LLC may need to obtain other local and state business licenses.
Comptroller of Maryland: In some cases, for example if you have employees or will be selling goods and collecting sales tax, you’ll need to register with Comptroller of Maryland. Currently, you can register for some state tax purposes online, but other registrations (such as for sales tax) must be done on paper. For more information on state LLC tax registration, see Nolo's article, Maryland LLC Annual Filing Requirements.
All LLCs doing business in Maryland must file an Annual Report and Personal Tax Return (Form 1) with the Maryland Department of Assessments and Taxation Personal Property Division. The report and return may be filed electronically through Maryland Business Express (MBE) or by mail. It is due by April 15 each year (you can request an extension). The annual filing fee is $300 (the fee does not include any state tax liability of the LLC).
All of the paperwork and procedural steps to start a limited liability company can be done online using Nolo's Online LLC Formation service.
If you are just starting your business or have already been operating as a sole proprietor, you should consider forming an LLC. LLCs limit an owner's personal liability for business debts and lawsuits and offer a lot of flexibility when it comes to ownership, management, and taxation of the business. To learn more about LLCs and decide if it is the right business structure for you, see What is a Limited Liability Company (LLC)?
It is important to make sure that your LLC's name is distinguishable from the names of other existing businesses on file with the Maryland Department of Assessments and Taxation. You can conduct a name search for free on the Maryland.gov website to make sure your proposed name is available.
Filing on your own is often the cheapest option, but completing all of the forms and filing them yourself can be complicated. Hiring a lawyer is another option, but will often cost you hundreds, if not thousands, of dollars in the process. Nolo's Online LLC formation service can complete all of the paperwork and filings for you, with packages starting at just $49.00. To learn more about the costs associated with forming and running an LLC, see How Much Does It Cost to Form an LLC?
Maryland does not require LLCs to have operating agreements, but it is highly advisable to have one. An operating agreement will help protect your limited liability status, prevent financial and managerial misunderstandings, and ensure that you decide on the rules governing your business instead of state law by default. For more information, see The LLC Operating Agreement.
To do business in Maryland, all LLCs organized outside of the state must register with the Maryland Department of Assessments and Taxation. Foreign LLCs must appoint a registered agent for service of process physically located in Maryland or appoint the Maryland Department of Assessments and Taxation as its agent. To register, file a Foreign Limited Liability Company Registration with the Maryland Department of Assessments and Taxation. The application may be filed by mail or online. The filing fee is $100.
For most formation purposes, a Maryland single-member LLC is considered the same as a multi-member LLC. The steps to form a single-member LLC in Maryland are the same as those listed above.
Single-member LLCs do have additional flexibility when it comes to filing a tax return. To learn more, see Nolo’s article, How Single-Member LLCs Pay Federal Income Tax.
If you provide a licensed professional service in Maryland and want to form an LLC, you will be required to form a professional limited liability company (PLLC). Examples of professional services include architects, attorneys, dentists, certified public accountants, and more. Generally, if you provide a service that requires you to obtain a Maryland state license before practicing, then you are a professional service. Each member of the company must be licensed in order to form a PLLC. To learn more about forming a Maryland PLLC, see our article, How to Form a Professional LLC in Maryland.
If you reach the point where it is time to close your business and cease all operations, then you will want to properly dissolve your LLC to limit your liability for lawsuits and government fees. Learn about the steps you will need to take in How to Dissolve an LLC in Maryland.