How To Start An LLC In Maryland
To start an LLC in Maryland, you must file Articles of Organization with the Department of Assessments & Taxation. You can file the document online, by mail or in person. The Articles of Organization cost $100 to file. Once filed with the state, this document formally creates your Maryland LLC. However, to actually ready the LLC to do business, you must complete several additional steps.
Starting a Maryland LLC Guide:
Maryland LLC Filing Options
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Maryland LLC Articles of Organization free download. When you're done filling out the form, submit it to your state.
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Maryland LLC Articles of Organization Requirements
To form a Maryland LLC, you must complete and file the Articles of Organization with the Department of Assessments & Taxation. See the document below and click on any number to see what information is required in the corresponding section.
Your name has to include “Limited Liability Company” or an abbreviation like “LLC.”
While the purpose of most businesses is to make a profit, don’t write that in your Articles. “Purpose” here is really asking what your LLC’s business activities are. Most businesses keep it really general with a statement like “the purpose of this LLC is to engage in any lawful activity in the state of Maryland.”
You have to list a street address in Maryland (no PO Boxes). Want to avoid having to update multiple addresses every time something changes? When you hire Northwest, you can keep things simple and list our address here.
A resident agent can be a person (like yourself) or a service (like Northwest). We recommend Northwest.
This is the street address in Maryland where your resident agent will be available during business hours. Hire Northwest and our address will go here.
Your authorized person is just the person your LLC authorizes to sign and submit the Articles of Organization. It doesn’t have to be anyone in the LLC. Northwest will be your authorized person when you hire us.
How much does it cost to start a Maryland LLC?
The filing fee for Maryland LLC Articles of Organization is $100. Expediting is another $50. If filing online, there’s also a credit card processing fee of 3%.
When you hire Northwest, your total cost is $380, including all of the above fees.
How long does it take to start a Maryland LLC?
Maryland LLC filing times vary depending on your filing method. Without expediting, filings can take 4-6 WEEKS. Expedited filings (+$50) are processed in a much more reasonable time period—in person filings take a day, online filings take 3 business days and mailed filings take around 7 business days.
If you hire Northwest to start your LLC, we file online and typically have your expedited Maryland LLC formed within 3 business days.
Does a Maryland LLC need a registered agent?
Yes, Maryland requires LLCs to have a resident agent (also called a registered agent) to accept legal notifications. You can list an individual, like yourself or a friend, or you can choose a business that provides resident agent service, like Northwest.
Hiring a service like ours has a few significant benefits, the first being that our address goes on your Articles instead of yours. Your Articles of Organization are a part of the permanent public record, so when you list your own address, you lose privacy and gain a bunch of junk mail. Using our address throughout your Articles also provides consistency. You don’t have to worry about updating multiple addresses as your LLC grows and changes. Our address stays the same—unlike the Colts. (Sorry, sorry. It still hurts.) And, when you hire Northwest, we’re the ones tied to the desk from 9-5. You’re free to run your business on your time.
Create the Maryland LLC Operating Agreement
Do I need an Operating Agreement?
Is there a statute or ordinance in Maryland requiring LLCs to have an operating agreement? No. Should your Maryland LLC have an operating agreement? Yes, yes, yes. An operating agreement may sound like just one more annoying piece of paperwork, but it’s a critical document—the most important internal document of your LLC.
Why is an Operating Agreement important?
This document puts into writing how your business actually functions. It includes how much each member invested, how profits and losses will be allocated, what happens if the business goes belly up, and more. Anyone with the hundred bucks for the filing fee can make an LLC. While most people who take the leap to become a business owner have a solid plan, there’s still plenty of people who are just making things up as they go along. People want proof that you’re in the former group, not the latter. When you go to open a business bank account or take on debt, the bank will ask to see your operating agreement. Potential investors, partners and members will follow suit.
Do I have to write the Operating Agreement?
Not from scratch. At Northwest, we’ve been helping businesses get their start for years, and we know how important an operating agreement is. That’s why we include a free operating agreement, specific to your management style, when you sign up for our services. These aren’t just cheap-o junk forms either, like a lot of stuff on the web. We’ve spent years refining these and all our free forms—operating agreements, resolutions, membership certificates and more—and over a million LLCs have used our free LLC forms to help form and maintain their businesses.
Get a Maryland LLC EIN
Do I have to get a tax ID number (EIN)?
On the federal level, your LLC is required to get an EIN if you have employees or file certain federal excise taxes (like Alcohol/Tobacco/Firearms returns). There are also plenty of local reasons you’ll need an EIN. When you go the bank to open an account or take on debt, they’ll ask for your EIN. When you go to establish credit with a vendor, they’ll ask for your EIN. In some cases, you can give your personal social security number instead, but with the rise of identity theft and data mismanagement, who wants to do that? EINs are issued for free by the IRS. You can apply yourself, or you can hire us to apply for you when you sign up with Northwest.
Open a Bank Account for Your Maryland LLC
To open a bank account for your Maryland LLC, you will need to bring the following with you to the bank:
- A copy of the Maryland LLC Articles of Organization
- The LLC operating agreement
- The Maryland LLC’s EIN
If there are multiple members in the LLC, you may also want to bring an LLC resolution to open a bank account that states that the person going to the bank is authorized by the members to open the account in the name of the LLC.
We recommend calling your bank ahead of time before going in and asking what their requirements are. Most banks don’t open business accounts nearly as frequently as personal accounts, so some bankers may be unfamiliar with their own bank’s requirements. As frustrating as that may be for you, calling ahead will help save you from being super annoyed when you walk into the bank.
File Maryland LLC Reports
What is a Maryland LLC Annual Report?
A major hit to your wallet. Every year, you’re required to fork over $300 to file a Maryland LLC Annual Report. The report updates the state on your LLC’s ownership and contact information. Late fees vary but can be hundreds of dollars, depending on how late your filing is and how much you owe in personal property taxes. If that sounds bizarre, it’s because Maryland also requires a Personal Property Return (described below) to be filed along with the Annual Report. Afraid you’ll forget to file? Northwest has your back. When you sign up for our services, we’ll send you reminder notifications.
What is a Maryland LLC Personal Property Return (PPR)?
The PPR is a tax return where you report the value of your personal property. You have to submit a PPR together with your Annual Report each year if you have a Trader’s License or if your LLC owns, lease or uses personal property in Maryland.
Personal property doesn’t include intellectual property, real estate, registered vehicles or land—but it does include pretty much everything else. Furniture, computers, books, supplies, tools—even inventory. Even the curtains in your office (no joke). The form takes some work, so give yourself plenty of time to go over it before April 15th when it’s due.
How much does an LLC in Maryland cost each year?
At least $300. This is the fee to file the mandatory Maryland LLC Annual Report.
Pay the LLC Taxes
What are the Maryland LLC taxes?
The Maryland personal net income tax rates for single filers are:
2%: $0 to $999
3%: $1,000 to $1,999
4%: $2,000 to $2,999
4.75%: $3,000 to $99,999
5%: $100,000 to $124,999
5.25%: $125,000 to $149,999
5.5%: $150,000 to $249,999
If your LLC has nonresident members, you may have to pay some entity-level income tax as well. To recover the tax money lost to nonresidents (who file personal returns in their home states), Maryland requires pass-through entities with nonresident members to essentially make up the difference by filing Form 510C.
The state sales tax in Maryland is 6%—cities and counties can’t tack on local sales tax either. There are a few exceptions to the 6% rule though. Alcoholic beverages are taxed at a 9% rate, and most short-term vehicle rentals are taxed at an 11.5% rate.