Limited liability companies (LLCs) in Maryland are affordable and easy to form. And as with other states, the State of Maryland has some unique LLC requirements.
Interested parties must register with the Maryland Department of Assessments and Taxation by filing the necessary forms, paying the necessary fees and meeting all naming and formation requirements.
The specifications required for forming a Maryland LLC are as follows:
Registration. LLCs are required to complete and submit Articles of Organization with the Maryland Department of Assessments and Taxation. This is done by mail and must include the following information:
- LLC name and address
- Purpose of LLC
- Registered agent’s name, address and signature
- Organizer’s name, signature and address
All documents submitted must be accompanied by the required filing fee.
Forms and fees. The filing fee for the Articles of Organization is about $100. Expedited processing services are available for a minimal fee of $50. Fees can change, check with the Maryland Department of Assessments and Taxation for the most current fees.
Timeline. The usual processing time for documents and filing is between seven to eight weeks but may take longer if there is an increased volume in documents submitted. The expedited processing service cuts processing time down to seven business days.
Naming requirements. LLC naming requirements can be confusing. However, the easiest way to make sure that your LLC name will be approved is to ensure that it is distinguishable from other LLCs and includes specific words required of LLCs. You may opt to have a preferred name checked for availability before filing your LLC formation documents with the Department of Assessments and Taxation.
Formation requirements. To form an LLC, a registrant must first file Articles of Organization with the Department of Assessments and Taxation. All submissions must be accompanied by a $100 filing fee.
An LLC with more than one member is also strongly advised to have a limited liability company operating agreement among its members.
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Starting an LLC in Maryland
Before you begin the registration process for an LLC in Maryland, it’s important to know what an LLC is and whether or not it is a viable business structure for your company, so be certain to read up on the definition and benefits of an LLC.
These steps will guide you through the LLC registration process with the Maryland Department of Assessments and Taxation:
1. Decide on a name for your business. You can choose any name for your LLC as long as it ends with “Limited Liability Company” or any variation of its abbreviation—e.g., LLC, L.L.C., LC or L.C.
Names cannot be reserved in Maryland. However, you may have a preferred name checked for availability by accessing the Maryland Department of Assessments and Taxation website.
2.Assign an agent for service of process. Registered agents are individuals or corporations authorized to do business in the state and which have permanent addresses in Maryland. Registered agents accept legal documents on behalf of the LLC and make sure its members are notified.
3. Get an Employer Identification Number (EIN) from the IRS. If there are two or more members in your LLC, your company will need to obtain an EIN from the IRS, for tax purposes.
4. Create an operating agreement. Although LLCs in Maryland are not required to have a limited liability company operating agreement, it is wise to have one in place with other members should your LLC have more than one member. The State of Maryland recognizes limited liability company operating agreements as governing documents.
5. Familiarize yourself with the LLC’s continuing legal obligations, specifically annual reports. LLCs in Maryland are subject to Personal Property Returns (PPR), which act like an annual report. The PPR must be filed with the Department of Assessments and Taxation before April 15 of each year. You may file this by mail or online, along with the required $300 filing fee that is about $300 . Generally, you will be required to file the following forms:
- Annual Report/Personal Property Return (Form 1)
- Balance Sheet (Form 4A)
- Depreciation Schedule (Form 4B)
- Disposal and Transfer Reconciliation (Form 4C), if applicable
Filing an LLC and Fees
Following are the forms and fees that are required when starting an LLC in Maryland:
1. Forms. First, you need to complete and submit Articles of Organization with the required filing fee to the Maryland Department of Assessments and Taxation.
2. Fees. The filing fee for Articles of Organization is about $100. There is an option to expedite services for a fee of $50.
3. Limited liability company operating agreement. Although the LLC operating agreement is not submitted with the Articles of Organization to the Department of Assessments and Taxation, it is a good idea to have one in place for LLCs with more than one member. This agreement should be kept on file by the registered agent.
4. Taxes. LLCs in Maryland are treated as corporations, limited liability partnerships or single-member LLCs and are subject to federal income tax classifications. Depending on the type of taxation you opt to have for your LLC, you will have different federal tax responsibilities.
You should always make sure to acquaint yourself with the state laws regarding taxation, as your LLC may be subject to taxes other than the Personal Property Return (PPR.)
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