How to Start an LLC in Maryland

Here are the steps you need to take to form a limited liability company (LLC) in Maryland. An LLC is a popular choice for small business owners because this business structure offers limited liability, tax benefits, and a flexible management structure.

For more information on how to form an LLC in any state, see our article on how to start an LLC. You can also use our online LLC formation service to register your LLC.

1. Choose a Name for Your Maryland LLC

When forming an LLC, you'll need to come up with a business name. You need to make sure your proposed business name complies with Maryland's laws around LLC names.

LLC name must be distinguishable. Your LLC's name must be distinguishable from the names of any other business entities already on file with the Maryland Department of Assessments and Taxation (SDAT). In other words, your business can't have the same name as another business that's registered in Maryland. You can check which names are available through Maryland's business entity search database. (Md. Code Corps. & Ass'ns, § 1-504 (2024).)

LLC name must include an entity designator. 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. " (Md. Code Corps. & Ass'ns, § 1-502 (2024).)

Name reservation. You can reserve an available business name for 30 days by filing a Corporate Name Reservation Application with the SDAT. As of 2024, the filing fee to reserve a name is $25. (Md. Code Corps. & Ass'ns, § 1-505 (2024).)

Using a trade name. When doing business out in the real world, you don't have to use the business name listed in your LLC's articles or organization. You can instead use a trade name—also called a "fictitious business name" or "doing business as" (DBA). If you decide to use a name other than your legal name, you must register your trade name. You can register a trade name with the SDAT by filing a Trade Name Application. You can file a trade name application online through the Maryland Business Express (MBE) website. The registration is good for five years and can be renewed. As of 2024, the filing fee is $25 to register a trade name in Maryland. (Md. Code Corps. & Ass'ns, § 1-406 (2024).)

2. Appoint a Maryland Registered Agent

Every Maryland LLC must have an agent for service of process in the state (called a "registered agent" in most states). In Maryland, a registered agent is called a "resident agent."

A resident agent is an individual or business entity that agrees to accept legal papers on the LLC's behalf if it's sued. They must have a physical street address in Maryland.

(Md. Code Corps. & Ass'ns, § 18-104 (2023).)

3. File Articles of Organization With the SDAT

You can create a Maryland LLC by filing Articles of Organization for Limited Liability Company with the SDAT. The articles must include:

• the name of the LLC, and
• the LLC's principal address in Maryland, and
• the name and address of the LLC's resident agent in Maryland.

(Md. Code Corps. & Ass'ns, § 4A-204 (2024).)

You can file the articles online via the MBE website or by mail. As of 2024, the filing fee for Maryland articles of organization is $100.

4. Prepare an Operating Agreement

An LLC operating agreement isn't required in Maryland, but is highly recommended. An operating agreement is an internal document that establishes how your LLC will be run. It's not filed with the state.

The agreement 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 split
• rules for holding meetings and taking votes, and
• buyout, (also called "buy-sell") provisions, which determine what happens when a member wants to sell their interest, dies, or becomes disabled.

(Md. Code Corps. & Ass'ns, § 4A-402 (2024).)

For help creating an LLC operating agreement, you can use our online LLC formation service.

5. Get an EIN and Comply With Other Tax and Regulatory Requirements

Other tax and regulatory requirements might apply to your LLC. For instance, your LLC might need to obtain an EIN, apply for business licenses and permits, and register for business taxes.

EIN. If your LLC has more than one member, it must obtain a federal employer identification number (EIN), even if it has no employees. If you form a single-member LLC, you must obtain an EIN for your LLC only if you'll have employees or you elect to have your LLC taxed as a corporation instead of a sole proprietorship (disregarded entity). You can obtain an EIN by completing an online EIN application on the IRS website. There's no filing fee.

Business licenses. Depending on your business activities and location, your LLC might need to obtain other local and state business licenses. For local licenses, check with the clerk for the city where the LLC's primary place of business is located (or county if it's in an unincorporated area). For state license information, check the Maryland Licensing OneStop Portal.

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 the Comptroller of Maryland. You can use the Combined Registration Application (CRA) to register for multiple tax accounts at once, including sales and use tax, withholding tax, and unemployment insurance tax. You can file the CRA online through the MBE website. For more information on Maryland's LLC tax registration, see our article on LLC annual filing and tax requirements.

FAQ About Maryland LLCs

Here are some other questions you might have about your Maryland LLC.

• Should I form an LLC in Maryland?
• How much does it cost to form an LLC in Maryland?
• Do I need to submit an annual report for my LLC in Maryland?
• Are there any other maintenance requirements for Maryland?
• Do I need an operating agreement for my Maryland LLC?
• Do I need a business license in Maryland?
• Are there Maryland business taxes I need to pay?
• Can a foreign LLC do business in Maryland?
• Can I form a single-member LLC in Maryland?
• Can I form a professional LLC in Maryland?
• How do I dissolve my LLC when I'm done?

Should I form an LLC in Maryland?

If you're 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's the right business structure for you, see our article on LLC basics.

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

Below are the fees (as of 2024) you might need to pay to form your LLC in Maryland:

• The SDAT charges a $100 fee to file the Articles of Organization. You have the option of paying an additional $50 for expedited processing.
• You can reserve a business name for 30 days for a $25 fee.
• The SDAT also requires all Maryland LLCs to file an Annual Report (Form 1), which has a filing fee of $300.

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 it will often cost you hundreds, if not thousands, of dollars in the process. If you'd like help completing all the filings, try our online LLC formation service.

To learn more about the costs associated with forming and running an LLC, see our article on how much it costs to form an LLC.

Do I need to submit an annual report for my LLC in Maryland?

Yes. All LLCs doing business in Maryland must file an Annual Report (Form 1) with the SDAT. The report includes a personal property tax return. Your LLC must complete the personal property tax return unless it qualifies for an exemption. Specifically, if your business has personal property valued at less than $20,000, then your business doesn't need to submit the personal property section of Form 1. You'll see similar instructions on the form. (Md. Code Tax-Prop., § 7-245 (2024).)

The report is due by April 15 each year (though you can request an extension). You can file the report online through the MBE website or by mail.

As of 2024, the annual filing fee is $300. This annual fee doesn't include any state tax liability of the LLC.

Are there any other maintenance requirements for LLCs?

Apart from annual reports, your LLC will need to file and pay applicable taxes to the local, state, and federal governments. In addition, your LLC might need to obtain and periodically renew any required general or special business licenses or permits. You'll be responsible for keeping track of these maintenance requirements to keep your LLC in good standing and legally compliant.

Starting in 2024, all LLCs were previously required to submit a beneficial ownership information (BOI) report to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of Treasury. However, in March 2025, after some constitutional challenges, FinCEN revised the BOI reporting rule so that the requirement only applies to companies created outside the U.S. So, if you form your LLC within the U.S., then you no longer need to worry about the BOI reporting requirement.

Do I need an operating agreement for my Maryland LLC?

You're not required to have an operating agreement for your LLC in Maryland. Though, it's highly advisable to have one. An operating agreement can help protect your limited liability status, prevent financial and managerial misunderstandings among members, and ensure that you choose the rules that govern your business instead of your state's default rules.

Do I need a business license in Maryland?

Maryland doesn't require businesses to obtain a statewide operating license. However, depending on your LLC's location and business activities, you might need to obtain local and state business licenses.

See the maintain licenses and permits webpage on the MBE website for more details about state and local licensing.

Are there Maryland business taxes I need to pay?

LLCs are considered "pass-through entities" (PTEs) by default, meaning the responsibility for paying taxes on the LLC's income passes through to the members. So, an LLC member will report and pay taxes on their share of the LLC's income on their personal tax return.

However, there are other taxing scenarios that you should be aware of. Some LLCs elect to be taxed as a corporation rather than as a partnership (a type of PTE). Alternatively, Maryland allows LLCs to pay income tax at the entity level. If you elect to have your LLC taxed at the entity level, then your LLC will be taxed on behalf of all the members (owners). You'd then claim a tax credit on your personal return for the tax already paid on your behalf by your LLC. You'll make these elections and report and pay these state taxes to the Comptroller of Maryland.

In addition to income tax, your LLC might be responsible for reporting and paying sales tax, withholding employee wages, and paying unemployment insurance (UI) tax. You can register to report and pay these taxes using the Combined Registration Application.

See our article on Maryland tax filing requirements for more details.

Can a foreign LLC do business in Maryland?

Yes. To do business in Maryland, all LLCs organized outside of the state (called "foreign LLCs") must register with the SDAT. Your foreign LLC must appoint a registered agent for service of process that's physically located in Maryland or appoint the SDAT as its agent.

To register your foreign LLC in Maryland, file a Foreign Limited Liability Company Registration with the SDAT. You must include with your application a certificate of existence or similar document (such as a certificate of good standing or status) from your home state that shows proof of existence and is no more than 60 days old.

Before filing the application, make sure the LLC's name is available in Maryland by checking the state's business entity search database. If the name isn't available, the LLC must use an available name that's different from its legal name.

You can file your foreign LLC registration application online via the MBE website or by mail. As of 2024, the filing fee to register your foreign LLC is $100.

(Md. Code Corps. & Ass'ns, § 4A-1001 and following (2024).)

See our article on qualifying to do business outside your state for more guidance.

Can I form a single-member LLC in Maryland?

Yes. 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 generally 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 our article on how single-member LLCs pay federal income tax.

Can I form a professional LLC in Maryland?

If you provide a licensed professional service in Maryland, you can form a regular LLC or a professional service corporation (called a "professional corporation" in other states). Maryland doesn't specifically recognize professional LLCs.

Examples of providers 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 provide a professional service.

(Md. Code Corps. & Ass'ns, § 5-101 (2024).)

How do I dissolve my LLC when I'm done?

When you're ready to close your business, you should legally dissolve your LLC to limit your liability for lawsuits and government fees. To dissolve an LLC in Maryland, you should:

• have the unanimous consent of LLC members (or another occurrence listed in your operating agreement must happen)
• discharge and settle the LLC's debts, obligations, and other liabilities
• settle and close the LLC's activities
• distribute the company's remaining assets, and
• file Articles of Cancellation and pay the required filing fee with the SDAT.

(Md. Code Corps. & Ass'ns, § 4A-901 and following (2024).)

You also need to close your tax accounts and take any other steps necessary to close out your business. See our article on what you need to do when closing your business for more in-depth information and guidance.