How to Form an LLC in Maryland

Here are the steps you need to take to form an LLC in Maryland. For more information on how to form an LLC in any state, see Nolo's article How to Form an LLC.

1. Choose a name for your LLC.
2. Appoint a registered agent.
3. File Articles of Organization.
4. Prepare an LLC operating agreement.
5. Comply with other tax and regulatory requirements.
6. File annual reports.

1. Choose a Name for Your LLC

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.

2. Appoint a Registered Agent

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.

3. File Articles of Organization

A Maryland LLC is created by filing Articles of Organization with the Maryland Department of Assessments and Taxation. The articles must include:

• the LLC's name
• the LLC’s purpose
• the LLC's address in Maryland; and
• the name, address, and signature of the LLC’s registered agent in Maryland.

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).

4. Prepare an Operating Agreement

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:

• the members' percentage interests in the LLC
• the members' rights and responsibilities
• the members' voting powers
• how profits and losses will be allocated
• rules for holding meetings and taking votes, and
• buyout, or buy-sell, provisions, which determine what happens when a member wants to sell his or her interest, dies, or becomes disabled.

For help creating an LLC operating agreement, see Form Your Own Limited Liability Company, by Anthony Mancuso (Nolo) or use Nolo’s Online LLC.

5. Comply With Other Tax and Regulatory Requirements

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.

6. File Annual Reports

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.

7. Foreign LLCs Doing Business in Maryland

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.