How to Form an LLC in Maryland
Quick Start Guide ← you are here
This Quick Start Guide is a brief overview of how to form an LLC in Maryland.
Maryland LLC Costs:
Maryland state fee: $100 (by mail) or $150 (online)
Annual report: $300
A Maryland LLC (Limited Liability Company) is a business entity that is used to protect and limit the liability of its owners, called members. In case of a lawsuit, only the assets of the business can be used to pay off debts and judgments. Your personal assets, like your home, vehicles, and personal bank accounts are protected.
A Maryland LLC can be used to run and operate a business. It can also be used to hold assets, including cars, boats, aircraft, and real estate.
To form an LLC in Maryland yourself, you can read our Quick Start Guide below (a brief overview), or you can go through our detailed lessons above.
IncFile ($49 + state fee) or LegalZoom ($149 + state fee)
1. Maryland LLC Name
• Before forming your Maryland LLC, it is important to choose a name that’s available.
• Maryland law explicitly states that your LLC’s name should not be “misleadingly similar” to the names of other businesses on record with the Department of Assessments and Taxation.
• Search your Maryland LLC name here: https://egov.maryland.gov/BusinessExpress/EntitySearch
• Designator: Maryland law requires that your LLC must have a proper designator at the end of its name for proper identification. Acceptable designators are:
– LLC (most common)
– Limited Liability Company
2. Maryland Resident Agent
• All LLCs in Maryland must list a Resident Agent in their Articles of Organization. Most states refer to this term as “Registered Agent”, however, Maryland uses the term “Resident Agent”. They both mean the same thing.
• Maintaining a Resident Agent in Maryland is a requirement for your LLC. This maintains your compliance and good standing status with the state.
• A Resident Agent is the person or company who receives your LLC’s documents, notices and legal mail (called Service of Process). Because of this, the Resident Agent must have an actual street address in Maryland (PO boxes are not allowed by the state).
• Who can be your Maryland LLC’s Resident Agent?
The following are qualified to be your LLC’s Resident Agent:
– A friend or family member
– A Commercial Resident Agent
Note: If your Resident Agent is a person, they must be a resident of Maryland.
• Commercial Resident Agents in Maryland: If you don’t have an address in Maryland, or prefer not to use a friend or family member’s address, we recommend hiring IncFile ($99/year) or Northwest Registered Agent ($125/year). IncFile is cheaper, but their customer service is not as good as Northwest Registered Agent.
3. Articles of Organization
• Maryland LLC filing fee: $100 (by mail) or $150 (for online or walk-in filing). Payment is made to the Maryland Department of Assessments and Taxation.
• Maryland LLC approval times: 4 – 6 weeks (by mail), same-day (walk-in), or 7 business days (online).
• Which filing method to choose: We recommend either the online or walk-in filing since the approval times are much faster and you only pay an extra $50. If you don’t mind the slow approval time of filing by mail (4 – 6 weeks), then choose that option to save $50.
• Mailing and walk-in address:
State Department of Assessments and Taxation
301 W. Preston Street
Baltimore, MD 21201-2395
• File Maryland LLC by walk-in: You must submit your completed Articles of Organization before 4:15pm to make sure it gets processed on the same day. For faster service, we recommend arriving right after they open at 8:30am.
• File Maryland LLC by mail: Complete Articles of Organization form.
• File Maryland LLC online: https://egov.maryland.gov/BusinessExpress/
(must create an account with Maryland Business Express)
• Maryland LLC approval: You will receive a confirmation letter and a copy of your stamped and approved Articles of Organization.
4. LLC Operating Agreement
• An Operating Agreement lists the rights and obligations of the members of the LLC. These include rules on how the LLC should be run, how taxes are to be paid, and how profits/losses are to be shared among the members.
• The Operating Agreement also contains the list of members of your LLC and how much their stake is in the business. Even if you have a Single-Member LLC (you’re the only owner), it’s still best practice to have an Operating Agreement.
• You don’t need to send the Operating Agreement to the Maryland State Department of Assessments and Taxation, or to any other state agency. Just give a copy to any necessary members and keep a copy with your LLC’s business records.
• In case your LLC is sued, having an Operating Agreement shows that your LLC is operating properly. This helps maintain your personal liability protection.
5. Federal Tax ID Number (EIN)
• A Federal Tax ID Number is also known as an Employer Identification Number (EIN), Federal Employer Identification Number (FEIN), Federal Tax Number, and Federal Employer Number.
• Do not apply for an EIN from the IRS until your LLC has been approved by the Maryland Department of Assessments and Taxation. Apply for an EIN only after your LLC is approved.
• The IRS issues EINs to various businesses as a means of identification (think of it as your LLC’s “social security number”). The EIN is used for filing taxes and opening a business bank account. If you have employees, you’ll also use your EIN when dealing with payroll.
• An EIN is $0: EINs are free from the IRS.
• How to get an EIN: You can obtain an EIN from the IRS in 1 of 3 ways:
– by mail (approval takes 4 weeks)
– by fax (approval takes 4 business days)
– or online application (approval is instant at the end of the application)
• If applying by mail, use Form SS-4 and mail the completed form to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999.
• If applying by fax, use Form SS-4 and fax it to 855-641-6935.
• If applying online, use the EIN online application. It’s the most common and quickest way to get an EIN. You’ll need to list 1 “responsible party” (usually a member of the LLC) and you’ll need their social security number.
• No SSN, non-US citizens, and non-US residents: If you don’t have a security number, are not a US citizen or a US resident, you cannot use the online application. You need to mail or fax Form SS-4 to the IRS. Where it asks for your SSN on line 7b, write “Foreign” instead.
• LLC owned by another company: If you try to apply online, you’ll get an error message at the end of the application. Instead, you must submit Form SS-4 by fax or by mail.
6. Maryland LLC Annual Report and
Personal Property Tax Return
• On an annual basis, all Maryland LLCs are required to file an Annual Report and some Maryland LLCs are required to file an Annual Report AND and Personal Property Tax Return.
• An Annual Report keeps your LLC’s contact information up to date with the Maryland Secretary of State.
• A Personal Property Tax Return is a tax on any tangible personal property that is owned, leased, consigned, or used (even if owned by someone else) by your Maryland LLC and is located in the State of Maryland. Some examples of personal property include furniture, equipment, electronics, tools, inventory, computers, cell phones, books, artwork, supplies, and fixtures. The following are not considered personal property: intellectual property, real estate, or vehicles registered with the Motor Vehicle Administration.
• Your LLC’s Annual Report (and Personal Property Tax Return, if applicable) are due each year between January 1st and April 15th.
• Your LLC’s first Annual Report (and Personal Property Tax Return, if applicable) are due after the year your LLC was approved.
• For example:
– If your LLC was approved anytime in 2017, your first Annual Report (and Personal Property Tax Return, if applicable) are due between January 1st and April 15th of 2018.
– If your LLC was approved anytime in 2018, your first Annual Report (and Personal Property Tax Return, if applicable) are due between January 1st and April 15th of 2019.
• Maryland LLC Annual Report fee: The minimum LLC Annual Report fee is $300. If your LLC is also required to file a Personal Property Tax Return, the amount will be higher, based on the amount of personal property taxes that need to be paid.
• You can file your LLC’s Annual Report and Personal Property Tax Return either online (via “Business Express”), by mail, or by walk-in filing. The state prefers online filings though.
• File online: https://egov.maryland.gov/businessexpress
(create an account with Business Express)
* Important: You can only file your Annual Report and Personal Property Return online if your LLC meets the following criteria.
• File by mail: http://dat.maryland.gov/Pages/sdatforms.aspx#BPP
(scroll down until you see list for “Form 1”)
• Mailing Address:
State of Maryland – SDAT
Personal Property Division
PO Box 17052
Baltimore, MD 21297-1052
• Penalty if late or not filed: A Maryland LLC that files its Annual Report (and Personal Property Tax Return, if applicable) after the April 15th deadline will be charged late fees and penalties.
• Reminders: Starting in 2018, the state will no longer mail postcard reminders to your LLC’s address. To get email reminders instead, you should sign up for the state’s email reminder service.
• Recommendation: Because LLCs in Maryland are administered by the tax agency, the Personal Property Tax Return can be quite complicated. If you just have to file an Annual Report, you can likely do this yourself, however if your LLC has to file both the Annual Report and the Personal Property Tax Return, we recommend getting help from an accountant.
7. Business Licenses and/or Permits
• The type of business licenses and/or permits your LLC will need to legally operate in Maryland will depend on its location and the industry it is involved in. To find out more, contact your local agencies in the city, town or county where your LLC is located.
• Need to save time? If you’d rather rather not do the research to determine your business license and permit requirements, we recommend hiring IncFile. They’ll take care of everything for $99.
• Federal taxes: LLCs in Maryland have what’s called “pass through” taxation. This means your Maryland LLC does not pay separate federal taxes; instead, all its profits/losses “flow through” to you and are filed with your personal tax return (Form 1040), usually on a Schedule C.
• Maryland State and local taxes: In addition to your Personal Property Tax Return, your LLC may also need to file and pay additional taxes, both at the state level, and the local level (county, city, township, etc.)
9. LLC Bank Account
• Maintain your liability protection: To keep your business finances apart from your personal finances, you should open a separate bank account for your Maryland LLC. This helps maintain your personal liability protection.
• Items needed to open an account: Your approved Articles of Organization, EIN Confirmation Letter from the IRS, and your driver’s license or passport. We also recommend calling the bank ahead of time to find out if additional documents are required.
• Benefits: A separate bank account helps maintain your liability protection and it also makes business accounting and taxes a lot easier.
• Look for free business checking: Call a few banks in Maryland and take down notes for comparison. Some banks charge monthly maintenance fees for your LLC’s checking accounts, others don’t.
• Debit card: A debit card for your LLC will be issued when opening the account.
• Credit card: If you want to start building business credit for your Maryland LLC (or get travel and cashback rewards), you can get a credit card or two for your LLC. We recommend using creditcards.com to find a business credit card.
10. Business Phone Number
Instead of using your home telephone number or your cell phone, you can purchase an affordable “virtual business number” specifically for your Maryland LLC. You can set this virtual business phone up to forward to your cell phone, go through voice prompts, or configure it any way you’d like.
We recommend using Phone.com as they have the cheapest plans and their customer service is excellent.
They offer local phone numbers as well as 1-800 toll-free numbers. You can easily setup call forwarding, pre-recorded prompts, and get voicemail messages forwarded to your email.
Getting a separate business phone number for your Maryland LLC is also a good idea in order to keep your actual number private from those pesky “public record” websites.
Maryland State Agency