Starting a Maryland LLC
A Maryland Limited Liability Company (LLC) is a legal business structure used to protect your personal assets (home, car, bank account) in the event your company is sued.
An LLC can be used to operate a business, or an LLC can be used to hold your assets (such as real estate, vehicles, boats, and aircraft).
1. Maryland LLC Name
Before forming your Maryland LLC, it is important to choose a Maryland LLC Name that’s available.
Maryland law 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.
Use the Maryland Business Entity Search to check your LLC name.
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 Maryland 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:
- You can be your own Registered Agent
- A friend or family member
- A Commercial Resident Agent
Important: If your Resident Agent is a person, they must be a resident of Maryland.
Commercial Resident Agent in Maryland: If you want to hire a Commercial Registered Agent, we recommend Northwest Registered Agent ($125 per year).
Northwest has been in the business for over 20 years and they have great customer support. Any mail that is sent to your LLC will be scanned by them and uploaded to your online account.
Special offer: If you hire Northwest to form your LLC ($39 + state fee), they’ll include their Registered Agent service free for the 1st year.
3. Articles of Organization
The Maryland Articles of Organization is the form that official forms your LLC in teh state.
Maryland LLC filing fee: $100 (by mail) or $150 (for online filing). Payment is made to the Maryland Department of Assessments and Taxation.
Maryland LLC approval times: 4-6 weeks (by mail), or 7 business days (online).
Which filing method to choose: We recommend the online filing since the approval times are a lot faster. If you don’t mind waiting, you can file by mail and save $50.
Note: Filing times may take longer due to the current global situation and government delays. For the most up-to-date LLC processing times, check how long does it take to get an LLC in Maryland.
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 can file in person ($100) and your LLC will be approved same-day (if you drop it off before 4:15pm). We recommend arriving as early as possible.
Note: Maryland isn’t offering walk-in filing right now.
File Maryland LLC by mail: Complete Articles of Organization form and mail it in.
File Maryland LLC online: Maryland Business Express (must create an account)
Maryland LLC approval: You will receive a confirmation letter and a copy of your stamped and approved Articles of Organization.
4. LLC Operating Agreement
A Maryland LLC 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 Maryland EIN Number is also known as an Employer Identification Number, Federal Employer Identification Number (FEIN), Federal Tax ID 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)
- 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. We have a complete guide on Applying for EIN Without SSN.
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
The Maryland LLC Annual Report requirement has two parts:
- all Maryland LLCs are required to file an Annual Report every year and
- some Maryland LLCs are required to ALSO file a 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.
- If your LLC was approved anytime in 2021, your first Annual Report (and Personal Property Tax Return, if applicable) are due between January 1st and April 15th of 2022.
- If your LLC was approved anytime in 2022, your first Annual Report (and Personal Property Tax Return, if applicable) are due between January 1st and April 15th of 2023.
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. Online filings are also easier to submit.
File online: Maryland Business Express
(Create an account with Business Express.)
File by mail: Maryland SDAT Forms
(Scroll down until you see list for “Form 1”.)
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 (mail): Since 2018, Maryland no longer physically mails postcard reminders to your LLC’s address.
Reminders (email): 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.
If you have questions about the Maryland LLC Annual Report and/or Personal Property Tax Return, you can contact the Maryland Business Personal Property unit.
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.
Tip: Save time by hiring an expert. We recommend using IncFile ($99) to handle the business license research for you.
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: The bank will give you a debit card when you open the account.
Credit card: You can also get a business credit card to earn points, miles, and other rewards.
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.