How to Start an LLC in Maryland (MD LLC 2024)

How to Start an LLC in Maryland: If you’re looking to start an LLC in Maryland, you’ve come to the right page. Setting up an LLC is easy and cost-effective. To form an LLC, you must follow a few steps that include naming your LLC, hiring a registered agent, filing your formation documents, doing the operating agreement, and finally obtaining the EIN. You can easily set up your LLC at a very low cost in Maryland. Though, you must pay the mandatory state filing fee. These fees and charges can be tax deductible, making the LLC formation cost almost negligible.

On this page, You’ll find all the steps that must be taken to ensure that your Maryland LLC has been correctly formed. We recommend you read the whole article very carefully, word by word, don’t miss anything 🙂

How to Start an LLC in Maryland

An LLC (aka Limited Liability Company) is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection. For an LLC, members’ personal assets are not affected by business debts. However, in some cases, if the LLC is sued for business debts, courts might pierce the corporate veil and use the owner’s personal assets to meet their corporate liabilities.

If you wish to start an LLC in Maryland, you must file your Articles of Organization with the State and pay a filing fee of $100. While it’s the most important step, it’s not the only one. There are 4 other crucial steps to follow to get your LLC formed in Maryland. Below are all 5 steps that explain everything you need to do to start a Maryland LLC in 2024. Let’s get started! You can always hire a professional LLC formation service in Maryland to set up your LLC instead of doing it alone; a Pro service will ensure everything is done properly.

Step 1: Decide a Name for Your Maryland LLC

The first step while forming a limited liability company in Maryland is to give a proper name to your LLC. Before you name your business, you must know that the name should be easy to remember, available in the state, and follows all the LLC naming guidelines.

Maryland LLC Naming Guidelines

There are a few specific requirements all the LLCs in Maryland have to follow while naming their Company. Some of the most important requirements are as follows:

• Your business name should be available and no other existing business in Maryland can have the same name. ZenBusiness offers unlimited business name searches without any hassle.
• “Limited Liability Company”, “LC”, “L.C.”, “LLC”, and “L.L.C.” – any one of these has to be used as a suffix in your business name.
• You cannot use any name for your business that is confusing or misleading. Terms such as “Treasury”, “State Department”, “FBI”, “CIA”, etc. shouldn’t be included.
• Terms like “Bank“, “University“, “Attorney“, “Doctor“, etc can be added only after the additional requirements by Maryland State Government are fulfilled.
• (Optional) It’s better to name your business something for which your desired domain is available.

Important Links –	Email Form to –
Maryland Business Entity Search – Online Search Maryland LLC Name Search – Instructions Name Availability Standards – Guidelines	Office of Secretary of State, [email protected] By Phone: (410)-767-1802

Reserve Business Name for Future

If you do not wish to file your LLC right now but want to hold the name you have decided on, then you can reserve your LLC name for 30 days. To keep the name, you must file a name reservation application and pay $20 to reserve your name with the Maryland Secretary of State.

Doing Business As (DBA) or Trade Name

Once you have a legal name for your LLC, you can register it. However, it is not mandatory. You can, instead, use DBA, Fictitious Name, or Trade Name. In that case, you must register your name with the Maryland Secretary of State by submitting a Trade Name Application in Maryland and the filing fee of $25.

Apart from LLC formation, ZenBusiness offers customized website templates and business emails at a very reasonable price. If you plan to get a website, then it is wise to have a “.com” domain for your business, but these days you can also use other TLDs like “.io”, “.company”, “.xyz,” etc. Here you can get everything you need for your business in one dashboard.

Step 2: Assign a Resident Agent in Maryland

The second step to forming an LLC in Maryland is to appoint a Resident Agent (also known as a registered agent in many states). A Resident Agent is a person or business entity working on your LLC’s behalf. This person or business will receive important tax forms, legal documents, all notices of lawsuits, and other official government correspondence in Maryland. Hence, hiring a competent Maryland Resident Agent for your LLC is necessary.

Make sure your registered agent is a resident of Maryland or has a physical street address. This address will be used as the principal address of your LLC to receive any legal documents. Most LLC formation companies also provide registered agent services. Below are two great LLC formation services; even if you buy their cheapest plan (normally $0), you also get registered agent service and other services at a very reasonable price.

These two are our top recommendations for registered agent service, as they are competent and authorized to conduct business in Maryland. Some LLC formation services also offer standalone Maryland registered agent services. You can purchase only Registered Agent services without purchasing any other LLC formation services. This standalone service might become handy if you are doing it yourself and don’t want to disclose your home address or you don’t want to pierce the corporate veil.

Registered Agent Consent Application

In Maryland, there is no separate Consent Letter to be produced to the Secretary of State. At the time of change of Registered Agent (or the name or address), the new Registered Agent has to sign the consent letter. It comes with the Application form to Change the Registered Agent. The filing fee of $25 should be paid for it. For more information on the same, read our guide on Maryland Registered Agent.

Step 3: File Articles of Organization in Maryland

The third and most important step in forming a Maryland LLC is to file the Articles of Organization. This Maryland Articles of Organization is a legal document that is required to register your business with the Maryland Secretary of State. It costs $100 to file your formation certificate in Maryland.

The Articles of Organization include details like the name of the LLC, the registered agent’s name, address, employees’ details, and the company’s structure (member-managed or manager-managed). Before hiring employees in Maryland LLC, one should know about the rules and regulations thoroughly. Also if you are expanding your existing business (an LLC) in othe states to Maryland, you must register as a Maryland Foreign LLC.

Processing Time: Normally, it takes around 4-6 weeks (approx) to get your LLC formed in Maryland. The processing time for online filing might be a little faster than offline filing. With an additional cost, you can get expedited filing as well. However, the document processing time can be changed due to various factors.

Every LLC owner has to pay the filing fees to register their business in Maryland. This fee is mandatory but also tax deductible. If you’re doing it yourself (filing on your own), it will not cost you any additional service fee. However, it is not feasible to do that as the DIY process might be delayed, complicated, and messy, especially if you’re a novice entrepreneur. Hence, it is recommended to get professional guidance to get your LLC formed in Maryland.

Step 4: Create Your Maryland LLC Operating Agreement

Moving on to the fourth step, filing your operating agreement. An operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC. This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.

When it comes to filing a Maryland LLC Operating Agreement, the state does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all the details of your business operation that helps in taking future business decisions, especially if you decide to dissolve Maryland LLC later. Hence, having an operating agreement may not be necessary but it is surely ideal.

The operating agreement draft can be created for free if you don’t hire a professional. However, there is an advantage to appointing a proficient person/service. You will get a businesslike quality operating agreement at a very cheap fee, which will help you in the future. Hiring a professional service means you can sleep well at night 🙂

Step 5: Filing a Maryland LLC EIN

The Employer Identification Number (aka EIN) is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify the type of business for tax purposes and taxes in general. The EIN is necessary for any active business or any form of business.

EIN in Maryland is needed when the LLC hires employees. Hiring employees in Maryland LLC requires following specific rules and regulations. On the other side, EIN for Maryland foreign LLC should be obtained if your LLC is based in other states.

To obtain EIN (aka FEIN), one has to fill up a form (Online or by mail) and submit it to the IRS. Enter details of your LLC, and finally, complete the form and send it to the address given. You can also get an EIN Assistant who can help you with the process.

Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999

Fax: (855) 641-6935 | Fee: Free

Note: You don’t need a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.

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Congratulations, you are now done with all the necessary steps to form your Limited Liability Company in Maryland. If you do it yourself, it should take you a long time to understand and do all the steps properly.

However, if you use ZenBusiness, it should be way faster. You will always have a live chat option and phone support with experts for any help you need. Their worry-free service will make things easier for you.

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After Starting Your Maryland LLC

After forming your LLC, there are still some things that you will need. The most important thing is to separate your business and personal assets. LLCs have limited liability protection that protects your personal assets from business liability. This is called a corporate veil. However, the corporate veil can be lifted or pierced by the court if the LLC is sued. In that case, the owners of the LLC become personally liable for their corporate debts. A few things like appointing a legit registered agent, having enough capital, and filing all the major documents with the state can save the LLCs from being pierced into the corporate veil.

Apart from that, there are a few things you need to take note of,

• Get a company business bank account
• File Maryland business permits & licenses
• Get general liability insurance and professional liability insurance with coverage for employees
• File a Maryland LLC annual report or biennial report

This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.

The LLC formation processing time in Maryland is 5-8 weeks if filing offline (by mail). The process takes 2 weeks if filed online. Check how long it takes to form an LLC to know about the tentative timelines.

Cost of Maryland LLC

LLCs can be formed by spending less price. Apart from the mandatory state filing fees, you don’t have to bear additional service charges if you do it yourself. Following are the fees and taxes LLCs in Maryland must pay to register and run a business in the state. Forming an LLC is no doubt cost-effective compared to other business structures. However, the fees and charges (tax-deductible) that you must pay to the state, such as name reservation fee, name filing fee, LLC filing fee, and Franchise Tax & Sales Tax (If applicable). Here are the main fees and taxes you must pay while forming your limited liability company in Maryland,

Fees/Tax	Amount to be Paid
Name Reservation Fee (online/by mail)	$20
DBA Filing Fee	$25
Articles of Organization Fee	$100
Personal Property Return for Domestic LLC	$300
LLC Annual Fee	$300
Sales Tax	6%

In Maryland, an LLC name reservation is not mandatory. You can register your LLC name at the time of registering your LLC. If you wish to hold the name for some time without registering your LLC, then you can do that online. Your LLC name will be reserved for 30 days without registering your LLC. It can be done by paying $25.

In Maryland, an Annual Report has to be produced every year. It costs $300. Also, the State of Maryland requires the Personal Property Return cost which is $300. Read our guide on LLC costs in Maryland for more information.

Maryland Foreign LLC

If you are interested in forming a Foreign LLC in Maryland then you need to file the Certificate of Foreign LLC to the Maryland Secretary of State. Foreign LLCs allow you to operate your business in more than one state. Along with the Certificate of Foreign LLC, you need to submit some more documents like the Certificate of Good Standing, etc. to the Maryland SOS to form your foreign LLC in Maryland. To know more in detail, check out our guide on Maryland Foreign LLC.

Reasons to Start an LLC in Maryland

Maryland reaches the 2nd position in the United States for having women-owned businesses. The share of such companies is around 39% of total companies. The state is growing faster and making its way to global charts for having a woman-owned business. With many incentive and business funding options like loan programs, reductions in tax liability, and other benefits, Maryland has become one of the leading business states in the USA. Read more on Maryland’s classification of tax.

Incentive Business Programs

• Job Creation Tax Credit – Maryland government offers $3000 to $5000 tax credit for each job. LLCs that open up employment opportunities manage to save huge amounts as the tax burden is much lower in Maryland.
• Enterprise Zones Incentive – Like other states, Maryland provides an incentive to operate in special enterprise zones. Up to $3000 is provided as incentives to the LLCs for operating in Enterprise Zone.
• RISE Zone Incentive – Regional Institutional Strategic Enterprise or RISE zones such as Baltimore City, Prince George’s, Baltimore, and some others. Starting your LLC here or operating them in these areas brings tac credits and other incentives.

Losing limited liability is not an easy task

There is a rule in many states that if the member of an LLC actively participates in the LLC’s managing tasks, they can lose their limited liability. This is a major reason many people have to think before choosing an LLC. But for LLC in Maryland, this rule vanishes away. In this state, no matter that the member is making decisions or not, the limited liability is safe.

Leverage real estate investment

The real estate investments for the LLC have many advantages. They can save money through major real estate taxes that the partnership and corporate have to pay. This leverages the LLC in Maryland over other states and is becoming an attraction for businesspeople. They can also think of investing in personal property with a minimal amount of tax.

Leading Industries in Maryland

Before you form an LLC in Maryland, you need to brush up on your knowledge. You should know in detail about the industries that have flourished in Maryland and their contribution to the State’s economy.

Construction Business

The employees that are working in the construction business of Maryland have increased to more than 155,000. The main reason behind this is the booming business in the state. More than 90% of the companies are continuously earning huge profits and landing huge clients. All this is helping them to contribute 14.64% to the overall GDP of Maryland.

Cybersecurity

With 35 research parks and more than 400 companies, Maryland has become the best cybersecurity giant in the country. The Defense Information Systems Agency and NIST are now depending on the cybersecurity services provided by the companies of Maryland. The completion of the port Covington Research Park in Baltimore has changed the whole face of Maryland’s IT security.

Manufacturing

After 1820 in Maryland, the manufacturing industries have started becoming a pillar of Maryland’s economy. The state is very well known for its steel production but is not just limited to that. There are many rising manufacturing businesses of men’s clothing, electronic items, surveillance and communication products, etc.

The country is a significant reason behind driving the economy by exporting around $9.74 billion of products and giving jobs to 13.2% of the state’s people.

Bio-Pharma

If you look at the USA’s life-saving innovative industries, then most of them are in Maryland. According to the census, more than 2800 companies in the Pharma field are emerging in the state. These companies have formulated many life-saving drugs and have earned around $17 billion for the Maryland state.

Some small and innovative businesses that are established in Maryland are:-

• Pet sitting business
• Vending machines
• Quilt services

Maryland LLC Formation Review

F.A.Qs

In Conclusion

When it comes to forming an LLC in Maryland, it is much simpler than other business structures. In Maryland, starting a small business or a start-up is easy because of its diverse resources. For small budget holders, forming a limited liability company is desirable. The steps explained in this article are generic steps for starting a business in Maryland. It is recommended to consult an attorney or service provider.

In Maryland while establishing an LLC, make sure you check with the local bodies like the city council and district office to get updated with local regulations. We recommend ZenBusiness, one of the best LLC services that offers LLC formation at $0 (+ state filing fees). Hiring a professional service would make things easier. From having a registered agent to complying with the local and state government, everything will be smoother than doing things all by yourself.