How to Start an LLC in Maryland

Maryland is a great place to start a limited liability company (LLC), thanks to its business-friendly climate and straightforward formation process, and LLCs in particular are well-liked for their personal liability protection and flexible management options.

Whether you’re opening your first business or expanding an existing one, learning how to start an LLC in Maryland can set you up for success. If you’re thinking about Maryland LLC registration, it’s important to learn as much as you can so you can complete the process correctly and efficiently.

How to create a Maryland LLC in 6 steps

Forming a limited liability company in Maryland involves several key steps. Here’s what you need to do to become a business owner in Maryland:

Step 1: Choose your business name

The first step in starting your Maryland LLC is choosing a unique name for your business. Maryland requires your LLC’s name to include “Limited Liability Company” or the abbreviations “LLC” or “L.L.C.” This helps identify your business entity as a limited liability company and makes it distinct from other entities.

To ensure your name is unique, do a Maryland LLC search using the Secretary of State’s business name search tool. This database allows you to search for business names that are already registered, which means they’re not available. Make sure your name doesn’t conflict with any existing businesses, and avoid restricted terms like “bank” or “insurance,” unless you have the proper licenses to use those words. If you’re not ready to file your LLC formation paperwork yet, you can reserve your business name for 30 days for a $25 fee.

Step 2: Appoint a resident agent

Every LLC in Maryland is required to appoint a resident agent, also known as a registered agent. This person is responsible for receiving important legal documents and official government notices on behalf of your business. The resident agent must have a physical address in Maryland—P.O. boxes aren’t allowed—and must be available during normal business hours.

You can act as your own agent, appoint another individual, or hire a professional resident agent service. For example, registered agent services from LegalZoom provide you with automatic alerts when you get mail along with digital copies you can access from anywhere. If you do decide to use a resident agent service, make these arrangements before you file, as you’ll need to include their name and address on your LLC formation paperwork.

If you need to change your resident agent in the future, you can file a Resolution to Change Principal Office or Resident Agent with the Maryland State Department of Assessments and Taxation (SDAT), which charges a $25 filing fee for the update.

Step 3: File the Articles of Organization

To officially create your Maryland LLC, you’ll need to file Articles of Organization with SDAT. You can start by creating an account with Maryland Business Express and filling out the paperwork online. You can also mail in a paper filing with a check or money order. The fee for both online and paper filings is $100. The Articles of Organization provide key information about your LLC, such as:

• The LLC’s name and Maryland business address
• The purpose of the LLC
• The resident agent’s name and address
• The signature, name, and address of the person filing the paperwork

Standard review of your LLC application takes six to eight weeks. You can pay an additional $50 for review within 7 to 10 days. You can also pay a fee for same-day expedited service: $325 for online filings and $425 if you deliver the documents to the SDAT office in Baltimore.

Step 4: Create an operating agreement

While Maryland LLCs aren’t legally required to have a written operating agreement, it’s strongly recommended that small businesses create one. The LLC operating agreement outlines how your business will be run, the roles of each member, and how profits and losses will be distributed.

An operating agreement can prevent disputes between members by clearly defining each person’s responsibilities and expectations. It can also be useful for opening a business bank account or dealing with investors and other third parties. You can create an LLC operating agreement yourself, or consult an attorney to draft one that checks all the boxes and is tailored to your specific needs.

Step 5: Obtain an EIN and open a business bank account

Most Maryland LLCs will need an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This is a federal tax identification number that the IRS uses to identify your business when you file federal taxes. Small businesses that plan to hire employees will need an EIN, and you may need it to open a business bank account, as well.

Even if your Maryland LLC doesn’t have employees, obtaining an Employer Identification Number can help separate your business finances from your personal finances to maintain your liability protection. Getting an EIN is simple and free. You can apply online through the IRS website and receive your EIN immediately. To make it even easier, use LegalZoom to get an EIN—we’ll fill out the paperwork and confirm your ID number, so you can be sure everything is accurate.

Step 6: Register for state taxes and business licenses

Depending on the industry in which you operate your Maryland LLC, you may need to register for various state taxes. If you sell physical products, you’ll need to open a sales tax account with the Maryland Department of Assessments and Taxation. If you have employees, you’ll need to withhold state and federal employment taxes and register to pay the unemployment insurance (UI) tax. Certain LLCs in Maryland might have to pay additional taxes, like the Admissions and Amusement Tax, Motor Fuel Tax, or Tobacco Tax. The Maryland Comptroller website has more information on how to pay taxes.

While Maryland doesn’t require a general business license, certain LLCs may need state or local licenses. Business entities that sell alcohol, tobacco, food, or goods through vending machines, plus storage warehouses, construction companies, scrap metal processors, and other specific businesses require a license from the state. You might also need local business licenses from your city or county. You can check which licenses and permits apply to your business through Maryland’s OneStop Portal.

What to do after forming your Maryland LLC

After your Maryland LLC registration is complete, there are a few additional steps that can help your small business get up and running.

• Register a domain name. Even if you don’t plan to sell goods online, you’ll need a website so that potential customers can discover your business. That’s why it’s smart to secure a domain name that matches your Maryland business name. You can use services like Wix, Namecheap, or GoDaddy to find and register a domain name.
• Obtain a Certificate of Status. A Certificate of Status in Maryland proves that your LLC is legally registered and up to date on all filings and fees. (In other states, this document is called a Certificate of Good Standing.) While not required for everyday business operations, it can be useful when you’re applying for loans or doing business with partners and investors. You can request it from the Maryland SDAT for a $20 filing fee.
• Consider a foreign LLC. If your Maryland LLC will also conduct business outside the state, you may need to register as a foreign LLC in other states. Each state has its own filing requirements and fees for foreign LLCs.

Annual filing requirements for Maryland LLCs

Once you know how to start an LLC in Maryland, it’s time to learn about annual requirements. 

All legal business entities in Maryland are required to file an annual report every year by April 15. This way, the state can be sure it has the right information on file, like your business address and resident agent. If your LLC owns, leases, or uses personal property located in Maryland that’s worth $20,000 or more, you’ll also need to file a Personal Property Tax Return.

The filing fee for the Maryland Annual Report is $300, and there’s no fee for the Personal Property Tax Return. Failing to file on time can result in late fees, penalties, or even the administrative dissolution of your LLC, which would put your business out of good standing with the state. Online services can send reminders and help you file your annual report so you stay compliant.  

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

Starting an LLC in Maryland costs a minimum of $100 to file your Articles of Organization. If you choose other services, like reserving a name or requesting a Certificate of Status, it might cost a little more. Here’s what you can expect to pay:

• Name reservation: $25 filing fee to reserve a name for 30 days
• LLC formation: $100 for filing the Articles of Organization
• Certificate of Status: $20 filing fee
• Resident agent service: $100–300 per year
• State and local business licenses: Varies by location and business entity type

The total cost of Maryland LLC formation ranges from $100 to $145, plus the cost of any business licenses or resident agent service. You’ll also need to pay $300 each year when you file your Maryland Annual Report.

How to start your Maryland LLC with LegalZoom

Starting an LLC is exciting, but there’s a lot to think about. You want to protect your personal property, build credibility, and access tax savings as quickly as possible, so you can focus on growing your business. Fortunately, starting an LLC in Maryland can be simple and quick, especially when you use a service like LegalZoom. We can help you make sure your LLC paperwork is error-free and filed correctly, so you don’t waste time with denied applications.

Forming your Maryland LLC with LegalZoom takes just three easy steps. First, you’ll provide basic details about your business in a straightforward questionnaire. We’ll handle the heavy lifting by filing your Articles of Organization with the Maryland Department of Assessments and Taxation Charter Division. Once your LLC is approved, you’ll receive your official formation documents. Start your LLC with confidence today.

FAQs

How long does it take to get an LLC in Maryland?

It typically takes 7 to 10 business days to form an LLC if you file your Articles of Organization online through the Maryland Business Express portal. Filing by mail takes about four to six weeks. Processing times for paper filings can vary depending on the state’s workload, so online filing is the faster option.

What are the benefits of an LLC in Maryland?

Forming an LLC in Maryland offers several benefits, including limited liability protection for personal assets, flexible management structures, and the ability to choose how your business is taxed. Maryland’s business-friendly environment and access to resources make it an attractive place for entrepreneurs.

Do LLCs pay taxes in Maryland?

Yes, LLCs in Maryland may need to pay state taxes, depending on their business activities. LLCs themselves are typically taxed as pass-through entities, meaning profits are passed to the members, who then pay taxes on their personal returns. However, businesses may still need to pay sales tax, employment taxes, or personal property taxes, depending on the nature of the business.

Is Maryland a good state to start an LLC?

Yes, Maryland can be a great state to start a limited liability company (LLC). It has strong business support systems and a favorable location near major economic hubs like Washington, D.C. Maryland’s streamlined online filing system makes it easy for new business owners to get started quickly, and business owners have a lot of flexibility in how they structure their LLC.

Rudri Bhatt Patel contributed to this article.