How to Start an LLC in Maryland: If you’re looking to start an LLC in Maryland for $0, 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 for free in Maryland However, you must pay the mandatory state filing fee. These fees and charges can be tax deductible, making the LLC formation cost $0.
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 🙂
On this page, you’ll learn about the following:
- How to Start an LLC in Maryland
- After Starting Your Maryland LLC
- Maryland Foreign LLC
- Maryland LLC Formation Review
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 mentioned all 5 steps that explain everything you need to do to start a Maryland LLC in 2023. 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 at $0.
- “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, |
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.
Recommended: You can do name search, business domain, website, emails, and a lot more in one place by hiring a professional service. We recommend using –
ZenBusiness – ($0 for LLC Formation)
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.
It is not legally mandatory to use the word LLC in your domain name or email. If you want, you can use it. However, it is recommended not to use LLC in the domain name. A domain name should be short and easy to remember.
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/year), 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.
A person who is above 18 years of age and has a physical address in the state of Maryland can be a Registered Agent. A Registered Agent can be an independent person or can be a business entity. One is responsible for handling all the legal documents on the LLCs behalf.
Yes, you can be your own registered agent if you are a resident of the state of Maryland and you are above 18 years of age. To become a registered agent you must have the authority to conduct any type of business in Maryland.
There are a few reasons why you shouldn’t be your own registered agent. The address of the registered agent is used to communicate with the SOS or for any legal activities. If you are your own registered agent, you might have to upload your personal address to the public forum. Besides, the registered agent must be at the address during business hours. It won’t be easy for you as you also have to take care of other things in your LLC. Hence, it is wiser to appoint a separate entity as your registered agent.
If an LLC is sued in Maryland, in some cases, courts might decide to lift the corporate veil, which means the owners of the LLC will be personally liable for their business debts. They might have to forgo their personal assets to repay their business debts. This is called piercing the corporate veil, where personal and business assets are not separated anymore. Your personal assets can be protected if you have enough capital and all your LLC documents are properly filed.
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.
How to File Online
Go to the Secretary of State Online Service. You will get the online service page. If you are already a subscriber, then click on the “log in to Subscribe Account” option and log in with your credentials. If you’re not subscribed, then you have to sign-up to start filing. You can do that by clicking on the “Sign-up for Online Filing” button below. Read more about the Maryland Articles of Organization for online registration.
How to File by Mail
If you prefer filing real-life forms for your Maryland LLC registration, then you can download Domestic LLC Formation Form. Read the form thoroughly, fill it out, and mail it to the following address,
CoState Department of Assessments and Taxation, Charter Division 301 W. Preston Street; 8th Floor
Baltimore, MD 21201-2395
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.
Recommended: Online LLC Formation service can provide all these documents way faster than usual time with lifetime customer support and 100% accuracy. We recommend using –
ZenBusiness – ($0 + State Fees) Online LLC Setup
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.
Recommended: You can get a professionally made operating agreement for very less cost with ZenBusiness. You don’t need to worry about drafting it as they will take care of it on your behalf. We recommend using –
ZenBusiness – ($0 + State Fees) Online LLC Setup
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 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
Recommended: This hassle will be reduced when you hire an LLC formation service. They take care of obtaining EIN and all other things for your LLC. We recommend using –
ZenBusiness – ($0 + State Fees) Online LLC Setup
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.
Congratulation, 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.
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.
Cost of Maryland LLC
LLCs can be formed for $0. 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|
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.
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.
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.
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.
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
Time needed: 5 minutes.
Just to recap, here are the easy steps again when forming an LLC in Maryland. Click on the steps in this list to read the full detail.
- Name your Maryland LLC
The first thing you must do is to choose a company name, which should be unique, easy to find, and available in the state.
- Choose a Registered Agent
In Maryland, it is mandatory to select a registered agent for your LLC. Get a professional Registered Agent from LLC formation services to get things done hassle-free.
- File a Formation Certificate
Filing a formation certificate is necessary when forming an LLC in Maryland. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create an Operating Agreement
An operating agreement is not a strict requirement in Maryland but something encouraged when you start an LLC to avoid future conflicts.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
How Fast Can I Form an LLC in Maryland
Filing for Maryland LLC via mail takes 4-6 weeks. While online filing is processed in a span of 5-7 days. You can speed up by paying an additional amount to the state.
Forming an LLC in Maryland is a great way to protect your personal assets and gain the privileges of a corporation without the complicated tax requirements. However, the process of forming an LLC in Maryland can take up to several weeks depending on the complexity of your business structure.
To form an LLC in Maryland, you must file the articles of organization with the State Department of Assessments and Taxation (SDAT). This document must include the name and address of the LLC, the names of all members, and the purpose of the business. The articles of organization must be signed by all members and must include the names of all members. Additionally, you must pay a filing fee of $100 and an application fee of $50.
Once the articles of organization are filed with the state, the LLC will be officially registered with the state and you will receive a Certificate of Good Standing. This certificate proves that the LLC is in good standing with the state and can be used to open a business bank account, hire employees, and obtain business licenses. It is important to note that the LLC must also register with the IRS and obtain an Employer Identification Number (EIN).
Next, you must create an operating agreement. This document outlines the rights and responsibilities of the LLC members and serves as the governing document for the LLC. The operating agreement should include information about the ownership structure, management structure, voting rights, distribution of profits, and much more.
Once the articles of organization and operating agreement are completed, you will need to obtain any necessary licenses or permits from the state. This may include a sales tax license, a business license, or a professional license. Additionally, if the LLC will be conducting business in other states, you may need to register the LLC in those states as well.
Finally, you must register for state and local taxes. Depending on the type of business, you may need to register for sales tax, income tax, and other taxes. Additionally, you may need to file annual reports and pay franchise taxes.
Overall, forming an LLC in Maryland can take anywhere from two weeks to several months depending on the complexity of your business structure. To ensure a smooth process, it is important to understand all the requirements and to be organized and prepared. If you have any questions, it is always best to consult with a qualified attorney to make sure that all the necessary steps are taken.
If you are a resident of Maryland, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
Apart from the formation fee of $100 (domestic LLC) and $100 (foreign LLC), LLC costs in Maryland include $300 for Annual Reports every year. LLCs are liable to pay sales tax of 6% every year
It takes 5 to 7 business days to get an LLC in Maryland if you file it online. For the mail filing, it takes 4 to 6 weeks to get an LLC. If you hire a professional LLC service, then it might take less than that. We recommend ZenBusiness which has impeccable turnaround time.
Every year all the LLCs have to submit an Annual Report and pay $300 to the Maryland Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for the LLCs, it is a default tax structure. Once you will obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens. Read more on the Maryland Classification of LLC Tax.
LLCs are easier to establish than other business structures. Small businesses, especially start-ups can easily start an LLC in Maryland at a bare minimum cost. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. The formation of limited liability companies requires much lesser documents and legal processes. Share your queries with us, and leave a comment below.