How to Form an LLC in Maryland | Guide on Maryland LLC

Forming an LLC (Limited Liability Company) in Maryland is easy and affordable. The following are few procedural steps on how to start an LLC in Maryland. LLC forms in two ways, domestic and/or foreign. If you are planning to set up an LLC in states other than Maryland, visit How to Start an LLC.

Maryland LLC

Why an LLC in Maryland

Maryland reaches the 2nd position in the United States for having women-owned businesses. The share of such companies is around 39% in total companies. The state is not only growing faster but also making its way to global charts for having women-owned businesses. With a large number of incentive and loan programs, tax reductions, and other benefits, Maryland has become one of the leading business states in the USA. 

Incentive Business Programs 

  • Job Creation Tax Credit – Maryland government offers from $3000 to $5000 tax credit for each job. LLCs that open up employment opportunities manage to save huge amounts as the tax burden is much lower in Maryland. 
  • Enterprise Zones Incentive – Like other states, Maryland provides an incentive to the companies the operate in special enterprise zones. Up to $3000 is provided as incentives to the LLCs for operating in Enterprise Zone.
  • RISE Zone Incentive – Regional Institutional Strategic Enterprise or RISE zones are the ones such as Baltimore City, Prince George’s, Baltimore, and some others. Starting your LLC here or operating them in these areas brings tac credits and other incentives. 

Losing limited liability is not an easy task 

There is a rule in many states that if the member of an LLC actively participates in the managing tasks of the LLC, then they can lose their limited liability. This is a major reason many people have to think before choosing an LLC. But for LLC in Maryland, this rule vanishes away. In this state, no matter that the member is making decisions or not, the limited liability is safe.

Leverage real estate investment 

The real estate investments for the LLC have many advantages for them. They can save money through major real estate taxes that the partnership and corporate have to pay. This leverage the LLC in Maryland over other states and is becoming an attraction for businessperson as they can also think of investing in personal property in a minimal amount of tax.

How to Start a Maryland LLC

Suppose you’re planning to invest in a successful business or maybe about to set up your business in Maryland. In that case, forming an LLC in Maryland is the simplest option for you.

An LLC or a Limited Liability Company a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. This section gives you a step-by-step guide on How to Start an LLC in Maryland. 

Step 1: Decide a Name for Your LLC

If you are to start an LLC in Maryland, the first thing you do is decide on a business or company name, and how to name your LLC may be tricky. Thus, you have the option to choose a name that complies with the Maryland business naming requirements. It must also be easily searchable for potential clients. Here is a step-by-step guide to follow when naming your Maryland LLC. 

Why do you need a proper business name?

If you want your LLC to have special identification, your company name is essential. However, many people face lots of issues by avoiding focus on choosing a business name for their LLC business formation filings.

Because of this, here are some of the major benefits of choosing the best LLC corporate names.

  • To help establish a company’s presence in the market, a proper business entity type will help you. This also creates a new identity that will resemble your LLC.
  • After you’ve properly chosen the name for your LLC, you will have no problems finishing the registration process.
  • You can only get the EIN number when you have your name registration certificate with you.

What are the requirements when deciding a name for your LLC? 

name search is vital to make sure your business’ name is unique. Check the availability of your name with Business Entity Search on the Maryland Secretary of State’s website. Reserve the name by completing the Name Reservation Request Form for Domestic Entities.  

  • Don’t include words that could confuse people about your company. Words like ‘treasury, state department.’
  • You should also avoid restricted words like ‘bank, attorney, university,’ because they may require a lawyer and more paperwork.
  • As for a business website and your URL name, check if your name is still available for URL use with NameCheap.

Reserve a business URL

Even if you don’t have plans to set up a website today, it will help if you buy a URL to avoid others from getting your name; check out WPEngineKinsta, and GoDaddy for hosting and building your website. 

If you have decided on your URL name and have reserved it, set up a professional email account with Google GSuite.  

Step 2: Assign a Registered Agent in Maryland

A registered agent, or business entity, is a person that will act or work on your behalf. This person or business will receive significant taxation forms, legal documents, a notice of lawsuits, and other official government correspondence in Maryland. Choosing Maryland-registered agents for your LLC is required. 

Make sure your registered agents are residents of Maryland. It could also be a business. Here are the recommended agents and employees for you:

These five LLC formation services are recommended agents’ registered services as they are authorized to conduct business in Maryland. Compare them to check the best yet cheapest option for you. Besides, they can guarantee you professional service because they have been in the business for years. 

Step 3: File Articles of Organization in Maryland

A Certificate of Name Reservation is needed to file Articles of Organization, as other states call it. You need to make reports of this certificate with the Maryland Secretary of State, which costs $100. You may file them online or by mail. 

This Certificate of Formation is a legal document needed to form your business officially. It will indicate details about your LLC in Maryland, like if it is a member-managed or managers-managed

Before you start filings, you must already have your LLC name and registered agents or employees. You will attach a copy of your Name Reservation Certificate along with a list of the services that your Maryland LLC will offer.

How to File Online

Go to the Secretary of State Online Service. Select “non-subscriber.” Fill out the online form. The website will alert you if your county does not support online filings after selecting your principal county.

How to File by Mail

If you prefer filing real-life forms for your Indiana LLC registration, then you can download the Maryland Limited Company Certificate of Formation. Read the form thoroughly and fill it out. It will have to fill, among others,  your name, city, state, zip code, and signature. 

Step 4: Create Your Maryland LLC Operating Agreement

An operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts. 

Starting an LLC in Maryland does not require you to have an operating agreement, but it is ideal to have one that contains all your details of business operation.

Step 5: Filing a Maryland LLC EIN

The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify types of business for taxation and tax purposes. The taxation number is like a Social Security number dedicated to a business. 

It is also called a Federal Employer Identification Number (FEIN) or a Federal Tax Identification Number (FTIN). You will need this number for taxation filing and to determine taxation classification options.

Mail to:

Internal Revenue Service

Attn: EIN Operation

Cincinnati, OH 45999

Fax: (855) 641-6935

Fee: Free

After Starting your Maryland LLC 

After forming your LLC, there are still some things that you will need. Take note of the following:

  • Get a company business account
  • File Maryland business permits & licenses
  • Get liability for business insurance with coverage for employees
  • File a Maryland LLC annual report or biennial report
  • Already existing LLCs that wish to operate in Maryland must register as a foreign Maryland LLC.  

This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.  

Maryland LLC Formation Review

Time needed: 1 hour and 5 minutes.

To recap, here are the easy steps again when forming an LLC in Maryland. Click on the steps in this list to read the full detail.

  1. Name your Maryland LLC

    The first thing you must do is to choose a company name, which should include the phrase “limited liability company,” or one of its abbreviations (LLC or L.L.C.).
    name llc

  2. Choose a registered agent

    In Maryland, it is mandatory to select a registered agent for your LLC. You can check out our list of our 5 Best LLC Services in the United States.
    get registered agent

  3. File a formation certificate

    Filing a formation certificate is necessary when forming an LLC. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
    file formation certificate

  4. Create operating agreement

    An operating agreement is not a strict requirement but something encouraged when you start an LLC.
    create operating agreement

  5. Get an EIN

    The Employer Identification Number (EIN), also called  Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
    get an ein

F.A.Qs

What is the difference between ‘domestic LLC’ and ‘foreign LLC’?

A “domestic LLC” is one that conducts business in a state where it was formed. Meanwhile, a “foreign LLC” is an existing LLC that extended business to another state.

What do I need for Domestic and Foreign LLCs?

For Domestic LLCs, it is vital to have a Certificate of Name Reservation and Certificate of Formation. For the foreign LLCs, you must have a Certificate of Good Standing.

Is the cost to form an LLC the same across states?

The cost to form an LLC varies per state.

Does an LLC need to use a DBA?

Seldom do L.L.C.s use D.B.A. or a ‘Doing Business As’ name nor a fictitious business name. However, if you want to have one, you make read more about DBAs here

Why are operating agreements important?

This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.

Is there anything else I should keep in mind when naming my LLC?

>Your name should have “L.L.C. or LLC” or the phrase “limited liability the business.” 
>Do not include words that could create confusion between your LLC and any government business. 
>Words like ‘bank, attorney, university’ are restricted as well. 
>Lastly, your name should distinguish from other limited liability corporations, limited partnerships, or registered limited liability partnerships.

Where can I file my LLC name?

Typically, you can file your LLC name online or by mail. Check with the state where you will set up your LLC name. Take note that the fees for business names may also vary per state.  

How can I know if my URL name is available?

As for a website and your URL name, check if your name is still available for URL use with NameCheap to see if your name is available as a web domain. Even if you don’t have plans to set up a website today, it will help if you buy a URL. Buying it can help to prevent others from getting your name; check out WPEngine, Kinsta, and GoDaddy for hosting and building your website. 

Can I mail the LLC Certificate of Formation to the Secretary of State?

No. Never mail these documents or payments to the Secretary of State directly. 

Why do I need an EIN?

The reason you might need an E.I.N. is that it would help for three reasons:
>Opening a business bank account
>Filing and managing federal and state taxes
>Hiring employees or agents

How do I get an EIN when I do not have a Social Security number?

You are not required a Social Security number when getting an EIN You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.

I already have an EIN for a sole proprietorship; what now? 

Note that an LLC is different from a sole proprietorship. If you already have an EIN for your sole proprietorship, the IRS will require you to get a new one when your convert to an LLC. 

Do foreign applicants need an SSN to get an EIN?

International EIN applicants do not need an SSN to get an EIN.

What is an IRS?

The IRS is the one that will issue your EIN. You can request an EIN from the IRS ONLINE or download the FORM, fill it out, and send it by mail or fax.

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