A Limited Liability Company (LLC) is a business structure defined by Maryland law that offers liability protection similar to a corporation with the operational flexibility of a simpler entity. Governed by the Maryland LLC Act, this structure separates your personal assets from business debts, meaning you are not personally responsible for the company’s financial liabilities in most situations. An LLC can be established for nearly any lawful business purpose.
Pre-Filing Considerations for Your Maryland LLC
The first step is selecting a unique name for your company. Maryland law requires the name to include an identifier such as “Limited Liability Company,” “LLC,” or “L.C.” to designate its structure. This name must be distinguishable from any other business entity registered with the Maryland State Department of Assessments and Taxation (SDAT), which you can verify using the SDAT’s online business entity search tool.
Next, you must appoint a Resident Agent to serve as the official point of contact for legal notices and government correspondence. This agent must be either an adult resident of Maryland or another Maryland-based business entity. You will also need to establish a principal office address for your LLC. Both the Resident Agent and the principal office must have a physical street address in Maryland, as P.O. boxes are not permissible for these purposes.
Drafting and Completing the Articles of Organization
The Articles of Organization is the legal form that, once filed and approved by the Maryland SDAT, officially establishes your LLC. The official form can be accessed on the SDAT website, and it is important to use the state-provided document to ensure all required information is included.
When completing the form, you will enter the exact name you confirmed was available. For the business purpose, Maryland law allows for a general statement, such as “to engage in any lawful act or activity for which limited liability companies may be organized.” This avoids the need to amend your articles if your business activities change.
You must provide the address of the LLC’s principal office and the name and address of your appointed Resident Agent. The person forming the LLC, known as the organizer, must sign the document. By signing, the organizer affirms that the information is accurate and that the Resident Agent has consented to their appointment.
Submitting Your Articles of Organization to the Maryland SDAT
Once complete, the Articles of Organization must be submitted to the Maryland SDAT. The SDAT encourages using the Maryland Business Express online portal for the fastest processing. Alternatively, you can submit the documents by mail or in person to the SDAT office in Baltimore.
The base filing fee is $100 for standard processing, which is used for mail-in submissions. Online filings through the Maryland Business Express portal require an expedited processing fee, bringing the total to $150, plus any service fees for online payment. For mail-in submissions, a check or money order payable to the State Department of Assessments and Taxation is required. You should verify current fees on the SDAT website before submitting.
Online filings are processed within 7 to 10 business days, while mail-in filings with standard processing can take 6 to 8 weeks. Upon approval, the SDAT will return a copy of the filed Articles of Organization as official proof of your LLC’s existence. If there are issues with your submission, the SDAT will notify you of the deficiencies that need correction.
Post-Formation Essentials for Your Maryland LLC
After your LLC is formed, creating an LLC Operating Agreement is a recommended step. This internal document is not filed with the state but is valuable for both single-member and multi-member LLCs. It outlines the ownership structure, member responsibilities, profit and loss distribution, and procedures for handling disputes or member buyouts.
You will likely need to obtain an Employer Identification Number (EIN) from the IRS. An EIN is required if your LLC will have employees, be taxed as a corporation, or if you plan to open a business bank account.1Internal Revenue Service. Employer Identification Number You can apply for an EIN for free on the IRS website, and it functions as a tax ID for your business.
You must also register with the Comptroller of Maryland for applicable state taxes, such as sales and use tax or employer withholding taxes. All Maryland LLCs must file an Annual Report and Personal Property Tax Return with the SDAT by April 15th each year. The filing fee for this report is $300, and timely filing is required to keep your LLC in good standing and avoid penalties. Depending on your industry and location, you may also need specific state or local business licenses.