How To Set Up A Maryland LLC

Are you in the process of starting a business and looking to form a Limited Liability Company (LLC)? If so, you’ve come to the right place.

The Limited Liability Company (LLC) is a popular business structure for businesses starting in Maryland. It provides personal liability protection and has the potential to save money on taxes. With our guide, I’ll show you how to start an LLC in Maryland without an attorney by breaking down the steps and answering some common questions.

Related: Starting A Business In Maryland Checklist

Steps To Form A Maryland LLC

Step 1: Choose a Name for the LLC

The first step in forming a Maryland Limited Liability Company is to make sure the name you want is available. This step is important because the name of each LLC must be distinguishable from other entity names registered in the state. Fortunately, the Maryland Department of Assessments and Taxation makes it easy to do a Maryland LLC name search, where you can verify if your LLC name is available. 

In addition to the name being unique, the entity designator (identifier used at the end of the business name) must be either:

• Limited Liability Company
• L.L.C.
• LLC
• L.C.
• L C

Step 2: Appoint a Maryland Resident Agent

Every LLC in Maryland is required to have a Resident Agent (referred to as a Registered Agent in many states). A Resident Agent will act as a central point of contact to receive legal documents, tax notices, summons, subpoenas, etc., on behalf of the LLC.

The basic requirements to be a Resident Agent in Maryland include:

• The agent must be a Maryland resident at least 18 years of age or a commercial Resident Agent service
• The agent must have a physical address in the state (PO Boxes aren’t allowed)
• The agent must generally be available during normal business hours at the address provided to receive service of process

While many LLC owners opt to fulfill this role, some hire a resident agent service. Utilizing a resident agent service ensures that your LLC adheres to state requirements while offering an added layer of convenience and confidentiality since the owner’s personal address isn’t disclosed in public records.

Related: How To Appoint A Maryland Resident Agent?

Note that the resident agent will have to agree in writing to serve as the LLC’s Resident Agent.

Step 3: File the Maryland LLC Articles of Organization

Under the Limited Liability Company Act, Title 4A, LLCs may conduct activities related to any lawful business (with the exception of acting as an insurer), purpose, investment, or activity, whether as a for-profit business or a not-for-profit entity.

The paperwork to officially create an LLC in Maryland is called the Articles of Organization. These can be filed online through the Maryland Secretary of State’s Maryland Business Express website or by downloading the Articles of Organization and filing them by mail.

Related: How To Fill Out The Maryland Articles Of Organization

At the time of filing, you will need to indicate if you are “opting out” of having the original filed documents (certified Articles of Organization and Certificate of Status) returned. There is an additional $20 filing fee to get the original documents returned.

When filling out the Articles of Organization, there are a few sections to discuss as they may be challenging to answer when you see them for the first time. Let’s go over a few of those sections to help you get your LLC started right.

Business address: In this section, enter the street address, city, state, county, and zip code of the initial principal office.  This address can be the LLC’s physical address, or it can be the address where the business records are stored.  It’s important to note that this address may not be a PO Box.  If there is a mailing address that is different from the Maryland business address, click on the box and enter that address.

Description of business: This is an optional section, but it asks for a brief description of the business’s activities. One to two sentences will be sufficient.

Authorized persons: The Articles of Organization will need the signature of an authorized person, such as an LLC member, attorney, etc. At least one person must sign.

What To Do After Starting A Maryland LLC

Once the LLC has been formed, there are a few additional steps to take care of. Below is a list of the most common tasks.

Prepare a Maryland LLC Operating Agreement

The LLC operating agreement is a document that governs the framework of an LLC and covers items like ownership rights, member responsibilities, how profits and losses are distributed, and more.

Most states (including Maryland) do not require an LLC to have an operating agreement, but it is still worth considering. Without an operating agreement:

• The LLC could be subject to generic state rules that may be detrimental in the event of a lawsuit.
• Member’s personal liability protection may be diminished.
• Members may not fully understand their roles and responsibilities, which could lead to costly disputes in the future.

Obtain an EIN

If the LLC will hire employees or is owned by more than one member, an EIN is required. 

The EIN or Employer Identification Number (also referred to as a Federal Employer Identification Number, FEIN, or Federal Tax ID Number) is a unique 9-digit tax identification number assigned to a business by the Internal Revenue Service (IRS). Like an individual’s social security number, the EIN identifies business entities for tax purposes.

Related: How To Register For An EIN

Open an LLC Bank Account

Opening a bank account for your LLC is important for liability protection as the account separates the business’s funds from the member’s personal funds.

Several documents will be needed to open a business bank account, such as:

• A banking resolution is a document that authorizes the members to open a business bank account on behalf of the LLC.
• Copies of the original formation paperwork from the state show the LLC’s official creation.
• State ID of the member(s).
• In some circumstances, a Maryland Certificate of Good Standing may be needed to prove the LLC is active and in good standing with the state.

Apply for Business Licenses and Permits

Depending on what your business does and where it is located, various business licenses and permits will likely be needed before starting your business. Some common registrations include:

• Business license: There isn’t a general state of Maryland business license, but some cities require licensing before starting. Licensing is often done through the Circuit Court in the county where the business is located.
• Professional license: Certain services in Maryland, such as barbershops, accountants, salons, and others, must be licensed.
• Sales tax license: To sell products and certain services, you need a Maryland sales tax license from the Comptroller of Maryland.

Related: How To Register A Business In Maryland

File Maryland LLC Annual Reports

LLCs are required to file an annual report with the Maryland State Department of Assessments and Taxation, which is due by April 15th each year.

Additionally, if your LLC will own, use, or lease personal property in Maryland, the Personal Property Tax Return will need to be filed along with the annual report.  Personal property can include equipment, tools, inventory, computers, supplies, and more. Personal property taxes will vary depending on the type of property used in the state.

Related: How To File A Maryland LLC Annual Report

File the Beneficial Owner Information Report

Beginning in 2024, any individual who owns at least 25% or has “substantial control” of an LLC or corporation in Maryland or any other state must file the Beneficial Ownership Information (BOI) form with the Financial Crimes Enforcement Network (FinCEN). BOI reports are filed electronically through FinCEN’s website.

Maryland LLC FAQs