How to Start an LLC in Maryland (Step-by-Step Guide)

If you’re considering forming a Maryland LLC, you’re making a smart choice for protecting your assets while enjoying flexibility in business operations.

Many believe that starting an LLC in Maryland is complicated and time-consuming. In reality, you can set up your LLC with just five simple steps and a fee of $100.

In this guide, you will discover how to navigate the steps to start an LLC in Maryland. From naming your business to filing the necessary paperwork, you’ll be equipped with all the information you need to get started.

What Are the Steps to Start an LLC in Maryland?

To start an LLC in Maryland, you need to:

• Step 1. Name your Maryland LLC
• Step 2. Choose a Registered Agent in Maryland
• Step 3. File Articles of Organization with the state
• Step 4. Create an Operating Agreement
• Step 5. Get an EIN from the IRS
• Step 6. File a BOI Report
• Step 7. File your Annual Report & Personal Property Tax Return

Let us dive more in-depth into these steps so I can show you how to get them:

Step 1: Name Your Maryland LLC

Choosing the right name for your LLC is an essential first step. Your name should be distinguishable from other businesses in Maryland. If a name is too similar to an existing one, it won’t be approved.

When you select a name, it must include an LLC designation. You can choose from these options:

• Limited liability company
• L.L.C.
• LLC
• L.C.
• LC

Before you settle on a name, you need to check its availability. You can do this by doing a Maryland business search. If your desired name is available, fantastic! However, if it’s almost identical to another, you may need to rethink your choice.

If the formal name feels too stiff, consider registering a trade name (a “doing business as” name). This allows you to use a more casual name for branding, even if your formal name differs.

Finally, remember to look beyond Maryland. Conducting a nationwide trademark search can help ensure that no business in other states uses your desired name. This step is crucial for protecting your brand.

Step 2: Choose a Registered Agent in Maryland

In Maryland, every LLC must appoint a registered agent. This agent acts as the official point of contact for your business. They receive critical legal documents and government notices on behalf of your LLC.

You cannot designate your LLC as its registered agent. However, a member or employee of the LLC can take on this responsibility.

Who Can Be a Registered Agent?

You have a few options for who can be your Registered Agent in Maryland:

• You: You can act as your registered agent, but remember you must be available during business hours to receive documents.
• A Family Member: A trusted family member can be your registered agent.
• An LLC Formation Service: Professional services offer expertise in handling official correspondence and ensuring compliance with state regulations.
• A Lawyer: A legal service firm can also serve as your registered agent, providing additional legal support if needed.

Requirements for Maryland Registered Agents

Maryland law requires registered agents to have a physical street address, not just a P.O. Box. The address must be where the agent can consistently receive legal documents and official mail during regular business hours.

Additionally, the registered agent must be at least 18 years old and available to accept service of process. This means they must be present to handle any legal notices or court documents delivered to the LLC.

What registered agents do I recommend for Maryland?

I highly recommend Northwest registered agent services for obvious reasons.

They offer a range of benefits that set them apart, including a free year of registered agent service, which helps you save (about $300) on initial costs.

You’ll receive a complimentary operating agreement essential for outlining your LLC’s internal structure. My favorite part? Northwest also allows you to use their office address for your LLC filing, keeping your address off public records and enhancing your privacy.

Their free email forwarding service ensures you stay on top of important correspondence, and their exceptional customer support is always available to assist you whenever needed.

Step 3: File LLC Articles of Organization

Filing the Articles of Organization is crucial in starting your LLC in Maryland. This document officially registers your business with the state. Once filed, you’ll receive a receipt confirming your LLC can operate legally.

To file your Articles of Organization in Maryland, follow these steps:

Step #1. Complete the Form: Obtain and complete the Articles of Organization form from the Maryland State Department of Assessment and Taxation (SDAT) website.

In the Articles of Organization, you must provide:

• Your LLC’s legal name
• The physical address of your business in Maryland
• The purpose of your LLC
• The name and address of your resident agent

Step #2: File Online, In-Person, or by Mail: You can file your Articles of Organization online through the Maryland Business Express website or by mailing or delivering the completed form to:

State Department of Assessments and Taxation
Charter Division
301 W. Preston Street, Room 801
Baltimore, Maryland 21201-2395

To file in person, deliver to:

SDAT drop box in the building lobby at
301 W. Preston Street, Room 801 
Baltimore, Maryland 21201-2395

Step #3: Pay the Filing Fee: The filing fee is $100. You can additionally pay $20 for a Certificate of Status. When using a credit card or PayPal, an additional 3% processing fee applies. If you choose to pay with an eCheck, there will be a $3 fee.

Your filing will be processed in 6 to 8 weeks. For an extra $50, your filing can be processed in 7-10 business days. Same-day expedited service requires an additional $325 fee when filed online or $425 for documents filed through mail or in person.

Your LLC’s effective date can be set at the time of filing or later if specified in your Articles of Organization. Therefore, it is essential to consider when you want your business to start officially.

Step 4: Prepare the Maryland LLC Operating Agreement

An operating agreement is a crucial document for your Maryland LLC. While it’s not required by the state, having one can help avoid problems later. This internal document outlines how your LLC will function, making it clear to everyone involved.

Here are some important topics to include in your operating agreement:

• Tax Structure: Decide how your LLC will be taxed.
• Profit Distribution: Outline how profits and losses will be shared among members.
• Roles and Responsibilities: Clearly define the duties of each member or manager.
• Ownership Percentages: Detail the ownership stakes of each member.
• Voting Rights: Establish voting procedures for decision-making.
• Meetings: Specify how often meetings will be held and how they will be conducted.
• Membership Changes: Describe how and when membership can be altered.
• Dissolution Process: Outline the steps for dissolving the LLC if needed.
• Liability and Indemnification: Address how liability issues will be handled.

Creating this agreement helps set clear expectations and can prevent disagreements. If you prefer, you can hire an LLC service provider to assist you in drafting this document.

Creating a thorough operating agreement sets the foundation for a smooth-running business.

Step 5: Obtain EIN for Your Maryland LLC

An Employer Identification Number (EIN) is a unique nine-digit number the IRS assigns. It helps identify your business for tax purposes.

Obtaining an EIN is necessary for your Maryland LLC. You will need it to open a business banking account, apply for a business line of credit, obtain specific permits, and make contracts with wholesale vendors

How to Apply for an EIN:

• Online: Visit the IRS website. This is the fastest way to get your EIN.
• By Mail: Fill out Form SS-4 and send it to the IRS. This option takes longer.
• By Fax: You can also fax the completed Form SS-4.
• Phone: U.S. residents can call the IRS at 1-800-829-4933 to apply.

How Much Does It Cost To Get EIN?

Obtaining an EIN is free. However, some services charge $100 or more to help you with the entire process.

How Does it Take to Obtain my EIN?

• Online: Get it immediately.
• By Mail: Expect 4 to 6 weeks.
• By Fax: Usually within four business days.

Step 6: File a BOI Report

After setting up your LLC in Maryland, you must file a Beneficial Ownership Information (BOI) report. This is a federal requirement for new LLCs.

You must submit this report to FinCEN within 90 days of forming your LLC. Filing is free and can be done online at the FinCEN website.

Here’s what you need to prepare:

• Company Information: Name, address, and formation date.
• Beneficial Owners: Full names, addresses, dates of birth, and identification numbers.

Gather this information along with your LLC formation documents. This will help streamline the filing process.

Completing the BOI report is essential for maintaining compliance with federal regulations. It ensures transparency about who owns and controls your LLC. Take the time to do this correctly to avoid any potential penalties.

Step 7: File your Annual Report & Personal Property Tax Return

You must submit an Annual Report for your LLC in Maryland every year. This report is essential to keep your business in good standing with the state.

Additionally, your Maryland LLC must submit a Personal Property Tax Return if it meets either of the following criteria:

• The LLC owns, leases, or utilizes personal property within Maryland.
• The LLC holds a trader’s license issued by a local government authority in Maryland.

The annual report costs $300 yearly. It may cost more depending on your LLC’s Personal Property Tax Return.

The annual report and Personal Property Tax Return are due April 15th each year, with the first due date being the year following your LLC’s approval.

For example, If your LLC was approved on August 15, 2024, your first reports are due by April 15, 2025.

You can choose to file online or by mail. Online filing is usually more manageable if you only submit the Annual Report.

It can be more complex if you need to file both the Annual Report and the Personal Property Tax Return. In this case, it’s wise to consider hiring an accountant for assistance.

What are the Different Methods To Start a Maryland LLC?

When starting an LLC in Maryland, you have several options. Each method has its steps and benefits. You can handle everything yourself, use a professional service, or hire an attorney.

Here’s a breakdown of each method.

DIY LLC Formation in Maryland

Forming an LLC by yourself is a straightforward option. You will fill out and submit the Maryland Articles of Organization and pay the required filing fee.

All by yourself, no third party!

Pros:

• Cost-Effective: You save money by not hiring anyone.
• Control: You have complete oversight of each step.
• Learning Opportunity: You gain knowledge about the process.

Cons:

• Time-Consuming: It may take longer if you are unfamiliar with the process.
• Complexity: You must ensure all forms are correctly filled out.
• Privacy issue: If you serve as your registered agent, you risk having your address out there.
• Lack of Guidance: You might miss the necessary steps.

Using a Professional/Online LLC Formation Services

Many online services can help you form your LLC. These platforms guide you through the entire process, handling most paperwork.

Pros:

• Convenient: They manage the filing, saving you time.
• User-Friendly: Most platforms have easy-to-understand instructions.
• Support Available: Many offer customer service for questions.
• Privacy benefits: Most services allow you to use their address for free, so your address doesn’t get compromised

Cons:

• Costs: You’ll pay a service fee.
• Variable Quality: Some services may not be as reliable as others.

Hiring an Attorney

Working with an attorney is another option for forming your LLC. This method ensures you have professional legal guidance throughout the process.

Pros:

• Expertise: An attorney knows the legal requirements and can avoid pitfalls.
• Customization: Your LLC can be tailored to your specific business needs.
• Support with Complex Situations: Ideal for businesses with unique circumstances.

Cons:

• Higher Costs: Legal fees can be expensive.
• Dependence on Others: You may rely heavily on the attorney’s schedule.
• Potential Delays: The process may take longer due to attorney workloads.

What is The Cheapest Alternative Way to Form an LLC in Maryland?

When forming an LLC in Maryland, you have several options. The most common methods include hiring a professional service or doing it yourself (DIY). The DIY route is the cheapest and most cost-effective way to create your LLC.

By filing the Articles of Organization yourself, you will only pay the state fee of $100.

This DIY approach helps you avoid the extra fees of hiring a service or lawyer, saving you money for other business expenses.

However, while DIY is cost-effective, it requires some effort. You’ll need to understand all the forms and regulations, and missing a detail could delay your application or create problems later.

Consider using a registered agent if you prefer not to handle everything yourself.

They can make the process smoother by ensuring you receive important documents and helping you stay compliant with state requirements. Although this adds a bit to the cost, it can provide valuable support and peace of mind.

Who Provides the Best LLC Services in Maryland?

There are a myriad of Maryland LLC services from which to choose. Choosing the wrong one can affect your Maryland LLC formation timeline—I know this from my experience using a few and researching a dozen over the years.

Here are some top-rated options you should consider:

Best Maryland LLC Service	Google Rating	LLC Formation Cost	Registered Agent Fee
Northwest Registered Agent	4.7/5	$39	Free for 1 year
Doola	4.6/5	$0 (plus state fees)	$297/year
Tailor Brands	4.4/5	$0 (plus state fees)	$199/year
ZenBusiness	N/A	$0 (plus state fees)	$199/year

Besides, the fact that other services bill you for their registered agent in the first year, and Northwest offers it for free, is a HUGE plus for me.

Among these options, Northwest Registered Agent stands out. They offer competitive pricing and exceptional customer support and ensure your privacy. With no hidden fees or upsells, they provide clear and straightforward services. This makes them a top choice for forming your LLC in Maryland.

How Much Does It Cost To Form an LLC in Maryland?

Several costs must be considered when starting an LLC in Maryland. The main expense is the $100 state filing fee for submitting your formation documents.

Here’s a breakdown of the entire Maryland LLC costs:

Requirement	Cost
New LLC Filing Fee (Articles of Organization)	$100
LLC Formation Fee (optional)	$39 (via Northwest)
Registered Agent (optional)	$0 (via Northwest)
Annual REport and Personal Property Tax Return	From $300
Total Estimated Cost	$400 – $1000

When forming a new company in Maryland, it is ideal to budget about $400-$1000 for the first year. Then, if you want to go further, you can get other bells and whistles like a virtual mailbox, custom website, trademark services, premium EIN services, etc.

The most significant (and essential) expense for every Maryland business owner is filing the Articles of Organization, which costs $100.

Pros and Cons of Forming an LLC in Maryland

6 Important Things To Do After Forming Your Maryland LLC

After forming your Maryland LLC, there are specific steps you should take to ensure your business is set up for success. These actions will help you comply with legal requirements and lay a strong foundation for growth.

1. Research the Best Licenses and Permits for Your Business

Maryland doesn’t have a state general business license.

Depending on your business’s activity, you may need a special state and local business license or permit. For example, companies that sell goods may need a sales tax license.

Always check local, state, and federal requirements first.

• Local Licenses: You might need a business license from your city or county. This varies depending on your location.
• State Licenses: Certain professions, like healthcare or construction, often require specific state licenses. Check the Maryland Department of Labor for details.
• Federal Permits: You may need federal permits to sell certain products, such as alcohol or firearms.

Make a list of required licenses and permits. Apply for them early to avoid fines or penalties.

2. Create Business Accounts for Your LLC

Opening a separate bank account for your LLC is essential for keeping your business finances organized and distinct from your funds. This separation simplifies your accounting and helps safeguard your assets by clearly distinguishing between personal and business transactions.

When choosing a bank, look for one that offers business-friendly services, such as waived fees, free online banking, and other features that can benefit your business.

To open the account, be prepared to provide your EIN and a copy of your Articles of Organization.

A dedicated business account streamlines your financial management and simplifies tax preparation.

Having all your business transactions in one place lets you easily track your income and expenses, ensuring everything is well-organized and accessible when tax season rolls around.

3. Understanding Maryland Tax Requirements and Managing Your Taxes

Although Maryland imposes a corporate income tax, this tax does not apply to LLCs. Instead, LLC owners must file Form 510, which informs the state that taxes will be assessed on the personal income of the LLC’s members.

Another tax consideration is the business personal property tax. While the state does not levy this tax, various counties within Maryland do. The tax rates vary depending on the county and the year.

Visit the Maryland Department of Assessments and Taxation website for the most accurate and up-to-date information.

It’s important to note that the business personal property tax can significantly impact your LLC, especially if it owns or leases equipment, furniture, or other tangible assets within a county that imposes this tax.

Understanding the local tax rates and planning accordingly can help you manage your LLC’s financial obligations more effectively. This makes it crucial to regularly check the tax rates specific to the counties where your business operates.

By staying informed, you can better anticipate costs and ensure your business complies with all local taxation requirements.

4. File Your Annual Report

Maryland requires LLCs to file an annual report with the Maryland State Department of Assessments and Taxation (SDAT) to stay active within the state.

The cost is $300 and is due by April 15 each year.

The report updates your business information, such as the names and addresses of members or managers. Failing to file your annual report can result in fines and even dissolution of your LLC. Set a reminder to ensure you don’t miss this critical deadline.

Depending on your business, you may be subject to other local or industry-specific compliance requirements.

5. Get Business Insurance for Your LLC

Just as you wouldn’t leave your home without coverage, your LLC also needs the right business insurance to guard against potential risks and liabilities. Insurance protects your company’s assets and ensures financial stability in case of unforeseen issues or legal claims.

Your insurance needs will vary based on your business operations.

For example, general liability insurance covers risks such as slip-and-fall accidents or property damage if your LLC operates from a physical storefront.

Conversely, if you run your business as a consultant and work remotely, you might only need professional liability insurance to cover potential service errors or omissions. Assessing your business needs helps you choose the appropriate coverage to protect your LLC.

6. Setup Your Business Online Presence (Optional)

In today’s digital age, online presence can significantly benefit your business. Start by creating a professional website. This platform allows you to showcase your services and connect with customers.

Consider using social media to engage your audience. Platforms like Facebook, Instagram, and LinkedIn can enhance your visibility.

An online presence is not strictly necessary but can significantly benefit your marketing efforts. It allows potential customers to find and connect with your business quickly.

Maryland LLC vs. S Corp vs. Partnerships vs. Sole Proprietorship vs. Corporations

When starting a business in Maryland, you have several structures, each with unique features. Here’s a breakdown:

Sole Proprietorship

A Maryland sole proprietorship is the most straightforward way to start a business. Imagine you’re running a lemonade stand on your own. You make all the decisions and keep all the profits.

However, there’s no legal separation between you and your business. If your lemonade stand faces financial trouble or legal issues, your assets, like your car or home, could be at risk.

It’s easy to set up and manage, but it does leave you personally responsible for any business debts.

Partnership

A Maryland partnership involves teaming up with one or more people to run a business.

Think of it as joining forces with a friend to open a café. You share the profits and responsibilities, and you both make business decisions.

However, like a sole proprietorship, each partner is personally liable for any business debts or legal issues. If the business encounters financial trouble, your assets could be at risk, too.

Partnerships are relatively easy to set up but require clear agreements between partners to avoid conflicts.

LLC (Limited Liability Company)

An LLC offers a blend of flexibility and protection.

Picture it as a protective umbrella over your lemonade stand. This structure separates your assets from your business, so if your LLC faces legal issues or debts, your personal belongings are generally safe.

LLCs are more formal than sole proprietorships or partnerships but offer management and tax treatment flexibility. They are ideal for small—to medium-sized businesses that want liability protection without the complexity of a corporation.

S-Corporation

An S Corporation is a more structured business form.

Think of it as a business where owners are shareholders, much like a small-scale company with multiple investors. It protects liability and allows profits to pass through to your tax return, avoiding double taxation.

This means you report the income and losses on your tax return, which can be beneficial for tax purposes. However, S Corps have stricter operational requirements and formalities compared to LLCs.

Corporation

A Maryland corporation is the most complex structure, suitable for larger businesses aiming for significant growth. Imagine a big company with many shareholders. A corporation offers robust liability protection and is a separate legal entity from its owners, meaning your assets are protected.

Corporations can raise capital more efficiently by issuing stock and can offer employee benefits. However, they come with extensive regulatory requirements, formalities, and paperwork, making them more suitable for businesses with significant resources and expansion plans.

My Final Thoughts: Forming an LLC in Maryland

Starting an LLC in Maryland is an exciting step toward bringing your business idea to life. Although it might seem like many steps initially, breaking them down makes the process more manageable and ensures you cover all the essential bases.

To start your LLC in Maryland, follow these key steps:

• Choose a unique name that includes “LLC” or “Limited Liability Company.”
• Designate a registered agent to handle legal documents.
• File Articles of Organization with the Maryland Secretary of State.
• Create an Operating Agreement outlining the management structure.
• Obtain an EIN from the IRS for tax purposes.
• File your BOI report if applicable.
• File your Annual Report and Personal Property Tax Return

The costs associated with forming an LLC in Maryland are essential to consider. It costs $100 for filing the Articles of Organization, you can pay an extra $50 for expedited processing. You must also pay an annual fee of $300 for the annual report.

Maryland requires you to remain aware of annual fees and compliance. Remember to keep your LLC in good standing by filing any necessary reports and paying fees on time.

Learn More About Starting an LLC in Maryland

If you need additional help to start an LLC in Maryland, check out these valuable resources:

Frequently Asked Questions

Can I change my registered agent in Maryland?

Yes, you can change your registered agent in Maryland. You must file the appropriate form with the Secretary of State’s office to do so.

How do I change my Maryland LLC’s name?

To change your LLC’s name, file an amendment to your Articles of Organization with the Maryland Secretary of State. There is typically a fee associated with this process.

How do I renew my Maryland LLC?

Maryland LLCs do not require annual renewal. However, you must file an Annual Report and pay a fee to keep your LLC in good standing.

How do I dissolve an LLC in Maryland?

You must file Articles of Dissolution with the Maryland Secretary of State to dissolve your LLC. This formally terminates your LLC’s existence.

How do I add a member to a Maryland LLC?

To add a member to your Maryland LLC, you need a written agreement that documents the changes. This can usually be added to your operating agreement.

How do I add a DBA to an LLC in Maryland?

To add a DBA (Doing Business As) to your LLC, file the required paperwork with the Maryland state government. This typically includes registering the name you wish to use.

Can a minor own an LLC in Maryland?

In Maryland, minors can own an LLC but may require an adult to act as a manager or have representation. Check local laws for specific requirements.

What is the Cost of the Maryland Annual Report?

Filing an Annual Report for your LLC in Maryland costs $300. This fee helps maintain your company’s good standing.

Does LLC expire in Maryland?

LLCs do not automatically expire in Maryland as long as you file the required Annual Reports and pay the necessary fees.

Can a non-resident open an LLC in Maryland?

Yes, a non-resident can open an LLC in Maryland. However, you will need a registered agent with a physical address in the state.

Can I buy a house or car with my LLC in Maryland?

Yes, you can buy a house or car in the name of your LLC. This can offer liability protection, but follow proper legal protocols.

Can you have multiple businesses under one LLC in Maryland?

You cannot operate multiple businesses under one LLC name. If you want to manage each business differently, forming separate LLCs for each is better

Is Maryland an excellent state in which to form an LLC? Is it worth it?

Maryland can be an excellent state to form an LLC based on your business needs. It has a straightforward process and a favorable business environment for certain businesses.

Can one person form an LLC in Maryland?

Yes, one person can form an LLC in Maryland. This is called a single-member LLC and is standard for solo entrepreneurs.