Starting an LLC in Maryland FAQs
Why Start an LLC in Maryland?
If you’re reading this, you’re probably wondering how to start an LLC in Maryland, yes? Well, you’ve landed on the right page.
If you’re in Maryland, or thinking of moving there and starting an LLC in Maryland, this Mid-Atlantic state has booming science and tech sectors. And while business costs may be somewhat higher here than in some neighboring states, there is a very welcoming community in the Free State that is eager to support new, small businesses. Local resources like Main Street Maryland and The Maryland Technology Development Corp. (TEDCO) exist to bolster small businesses, and support entrepreneurs by offering guidance, resources, and networking opportunities.
A Limited Liability Company (LLC) is a type of private limited company in the United States, which is any type of business entity in private ownership. This means the company is owned by its founders and management and is therefore not beholden to shareholders. So what are the benefits of starting an LLC in Maryland?
Compared to other business structures, LLCs have a relatively simple, flexible, low-cost structure that offers tax benefits and personal liability protection. See our ultimate guide for How to Start an LLC for a full breakdown of the advantages of LLCs and how they compare to other business structures.
So if you’ve ever wanted to know how to get an LLC in Maryland, we have answers for you. This simple guide for how to form an LLC in Maryland shares the important steps, requirements, state fees and costs you’ll need during the LLC setup process so you won’t feel overwhelmed!
What are the Steps to Starting an LLC in Maryland?
Instructions for how to set up an LLC in Maryland may seem overwhelming at a glance, but we promise it’s not all that complicated. There are 8 simple steps to starting an LLC in Maryland:
Step 1: Name Your Maryland LLC
The first step to forming an LLC in Maryland is to come up with a name that is distinct, memorable, and, most importantly, one that is not already taken and adheres to Maryland naming rules. Your LLC’s name cannot have the same name as an existing business in Maryland. Use the Maryland state website’s business entity search tool to ensure that your intended name is not already taken.
If your name is available and you’re not quite ready to submit your registration documents, you can file a Maryland business name reservation application for $25, which reserves your name for 30 days. Once you’ve established that your name is available, there are a few naming requirements for LLCs in Maryland:
- The name of your business must include the words: Limited Liability Company, LLC, or L.L.C.
- Your LLC’s name must not be misleadingly similar to the name of any other business entity already on file with the Maryland State Department of Assessments and Taxation.
- Your LLC’s name may not contain terms used to name a government agency, such as the FBI, CIA, etc.
- A business license is required for most businesses in Maryland. Depending on where your business is located, the local Clerk of the Court can advise you of any local licensing requirements. You may also contact your county’s office of inspections, licenses, or permits. Use of certain words, including bank, lawyer, attorney, and credit union, may require additional documentation and licensure paperwork.
Step 2: Designate a Registered Agent
If you want to create an LLC in Maryland, you’ll need a registered agent. A Registered Agent acts as an intermediary for receiving official legal documents and passing them on to the business owner. All LLCs in the U.S. are legally required to designate a Registered Agent.
A Maryland Registered Agent can be any person or entity, including yourself or an employee of the LLC, over the age of 18. They must have a physical address in Maryland (not an P.O. Box) and must be on-site and available to accept business documents during regular business hours. The Registered Agent’s information can be updated in your LLC’s annual report, also known as the Statement of Information. A registered agent service may also be employed.
Step 3: File Articles of Organization (or similar document)
When you register an LLC in Maryland, you need to file Articles of Organization (or similar document). Once you have a name, and a Registered Agent located in Maryland, the next step to register an LLC in Maryland is to submit official formation documents, also known as Articles of Organization (or similar document), to the Maryland Department of Assessments and Taxation (physical address: 301 W Preston St., Baltimore, MD 21201).
In order to complete Articles of Organization (or similar document), you’ll need to include: your LLC’s name and street address, the name and address of your registered agent, the start date of your business, the name and address of the person forming the LLC, the LLC’s purpose, the management structure, a statement that the LLC will be run by at least one member, the name and address of the person filing the articles, and the signature of the person forming the LLC.
There’s a $100 filing fee. Online submissions are typically processed within seven business days, and paper submissions typically take six to eight weeks to process. If it’s accepted, you’ll receive a certificate of formal registration. See our Articles of Organization LLC Template to make sure you don’t miss anything.
Step 4: Create an LLC Operating Agreement
While not legally required to form an LLC in Maryland, creating an Operating Agreement is a valuable step to setting up an LLC in Maryland. An Operating Agreement is a written document that outlines and ensures that all members understand and agree to their designated rights and responsibilities.
The agreement should include all relevant information relating to your LLC’s operations, such as:
- LLC’s name and principal address
- Duration of the LLC
- Name and address of the registered agent
- Articles of Organization (or similar document)
- The LLC’s purpose
- Members and their roles
- Manner in which profits and losses will be distributed
- Process for adding or dismissing members
- Indemnification and liability clauses
- How the LLC will be managed
See our LLC Operating Agreement Template to make sure you’re including all the essentials. An attorney should be consulted if you want to register LLCs in Maryland with more complex operations.
Step 5: Receive a Certificate From the State
The next step for how to create an LLC in Maryland is receiving the certificate of formation. After an LLC’s formation documents have been filed and approved, the state will send you a certificate that formally confirms the existence of your LLC.
The state will mail this certificate to the Maryland mailing address you provided in your Articles of Organization (or similar document). If you don’t want to wait, you can pay $20 to receive your Certificate of Status at the time of filing your Articles of Organization (or similar document). This certificate will enable the LLC to get an Employer Identification Number (EIN), business licenses, and open a business bank account.
Step 6: Obtain Business Licenses
To obtain business licenses or other special licensing, contact your local city hall or county clerk. Depending on your type of business, local licensing requirements may be different (e.g. liquor license, health department permits, zoning permits, home occupation permits, professional licenses, and more). Additional documentation and licensure paperwork may be required for the use of certain words, including bank, lawyer, attorney, and credit union.
Next you’ll fill out the appropriate form and pay any required fees. Your city or county government website should have all of the details you’ll need.
Step 7: Get an Employer Identification Number
The next step to filing an LLC in Maryland is getting your tax ID number. The Internal Revenue Service (IRS) will assign you an Employer Identification Number (EIN) in order to identify your LLC for taxes.
An EIN, sometimes referred to as a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number (FTIN), is nine digits and enables an LLC to file and manage taxes at the state and federal level, open a business bank account, and hire employees. You can obtain an EIN for free via the IRS online portal.
Step 8: File a Statement of Information Annually
The final step for how to register an LLC in Maryland must be completed annually. File a Statement of Information each year by April 15th. The filing fee is $300.
What are the Costs of Starting an LLC in Maryland?
How much is an LLC in Maryland? The cost to create an LLC in Maryland is pretty straightforward. Here’s a roundup of the costs we’ve discussed so far for creating an LLC in Maryland:
- Maryland business name reservation filing fee is $25
- Prepare and File Articles of Organization – $100 filing fee
- File a Statement of Information annually by April 15th – $300 filing fee
Does Collective Help with Starting an LLC in Maryland?
Now you know all the steps for how to start an LLC in Maryland. Piece of cake!
But if all the steps, forms, fees, and costs for getting an LLC in Maryland still sound daunting, don’t stress. Let us help! Collective offers a smarter, more affordable way to get your LLC set up and running. We take care of your LLC formation, monthly bookkeeping, accounting, taxes, and more.
Start your Maryland LLC with Collective and find out how much you could save.
