How To Start an LLC in Maryland 2024: Step-by-Step Guide

Vault’s Viewpoint

• Starting an LLC in Maryland is the right choice for business owners who want more personal legal protection than a sole proprietorship but the same pass-through taxation flexibility.
• You can set up an LLC in Maryland by choosing a name, selecting a resident agent and filing the Articles of Organization.
• You will also need to take steps with the federal government, such as obtaining an EIN and filing a BOI report.

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Is an LLC in Maryland Right for Your Business?

When starting a new business, you can choose from a variety of business entities to form your new company or corporation. An LLC is one such business entity you can form at the state level. It is relatively easy to start an LLC, although it does take more money and paperwork to form an LLC than it does a sole proprietorship.

Before starting an LLC in Maryland, it’s smart to run through a quick checklist to ensure an LLC is the best business entity for you. Keep in mind that an LLC comes with its own advantages and disadvantages over other types of business entities, so consider the following items before proceeding with your filing:

An LLC may be right for you if…

• You want the ease of pass-through taxation with the option to elect corporate tax status.
• You want to legally separate your personal assets from the liability of your company debts.
• You are willing to spend more time on paperwork and pay more to file and maintain your business than what is required of a sole proprietorship.
• You have multiple owners who share decision-making.

An LLC may NOT be right for you if…

• You are the sole employee and/or owner with no plans to hire more employees or bring in more owners.
• You want to form the least complex and least expensive type of business.
• You plan to seek outside investors such as venture capitalists.
• You plan to provide company shares to employees.

Five Steps to Starting an LLC Business in Maryland

Below are the sequential requirements for forming an LLC in Maryland.

Step One: Select a Name for Your Maryland LLC

Your business name needs to be unique from other businesses established in Maryland, including sole proprietorships and corporations. Use the State Department of Assessments and Taxation’s (SDAT) website to conduct a search to find out if the name you have in mind is already associated with an entity.

Enter the name you want into the “Business Name” field and click “Search.” If the name is not associated with an existing business, you will see a message stating “the business name you entered was not found.” It will also prompt you to “log in or create a user account to create a new business filing using this name.”

Your business name also needs to have some form of the words “limited liability company” in it. You can choose to spell out those three words or abbreviate them using “LLC” or “L.L.C.”

Step Two: Select a Resident Agent in Maryland

A resident agent—otherwise known as registered agent—is the person or organization designated to receive legal paperwork on behalf of your LLC. If you choose a person to act as your resident agent, that person must be a Maryland state citizen over the age of 18. They may be the owner of the LLC or an employee.

If you choose an organization to act as your resident agent, that business must be either a Maryland corporation or a Maryland LLC. You may also decide to pay a fee to use a resident agent service company that specializes in this type of legal work.

Step Three: Complete and Submit the Articles of Organization

You can find the Articles of Organization for Maryland LLCs on the Maryland Department of Assessments and Taxation (DAT) website. This form is the official document used to create your LLC in the state. You have three ways to file your Articles of Organization:

• Create an account and file through the Maryland Business Express website. The portal will usher you through the necessary steps and payment procedures.
• File by mail and include check or money order payment to:

State Department of Assessments and Taxation

Charter Division

301 W. Preston Street, Room 801

Baltimore, Maryland 21201-2395

• File in-person by hand-delivering your documents to drop boxes at 301 W. Preston Street, Baltimore, MD 21201.

If you intend to mail or deliver the documents in person, it’s important to note that the DAT states “No handwritten documents will be accepted.” They must be “typed or printed.”

Be sure to include the $100 filing fee along with your paperwork. If you intend to request expedited same-day filing, read these instructions and be prepared to pay an additional $325 to $425 (depending on your method of filing) for the service. An expedited review of seven to 10 days costs an extra $50. Otherwise, expect a review completed within six to eight weeks.

Once approved, you will receive an SDAT identification number beginning with either “D,” “F,” “W,” “L,” “T” or “Z.” This number is not to be confused with your employer identification number (EIN), which you need to obtain next.

Step Four: Get Your Employer Identification Number (EIN)

Your EIN is also known as your Federal Employer Identification Number (FEIN). You will need an EIN to pay federal taxes, open a business bank account and file other important Maryland state documents. You can file for an EIN online with the IRS here.

Single-member LLCs are not required to obtain an EIN unless they hire employees on their payroll or are subject to excise taxes. Owners of single-member LLCs may use their Social Security Number in place of an EIN. However, having an EIN makes sense for most LLCs—particularly if you plan to hire employees or make any structural changes to your business in the future.

Step Five: File a Beneficial Ownership Information (BOI) Report

As of January 1, 2024, a new LLC must file a Beneficial Ownership Information (BOI) report with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) within 90 days of creation or registration. LLCs established before January 1, 2024, must file before January 1, 2025. Companies established after January 1, 2025, will have 30 days to file after creation.

The federal government implemented this law as part of the Corporate Transparency Act, which requires companies doing business in the U.S. to report on the individuals who own or control them. Filing is free, but failing to do so could incur steep penalties.

Optional (but Highly Recommended) Steps

Draft an Operating Agreement

Maryland does not require your LLC to create an operating agreement, but it’s a best practice recommended by the U.S. Small Business Administration. An operating agreement helps you set a framework for how operational and financial decisions get made in your business—making it essential for multi-member LLCs. The agreement can include any information about the structure of your business, voting procedures and protocols, the hierarchy of your members, the role of other individuals and more.

Set Up Tax and Insurance Accounts

Depending on the type of business your LLC performs, Maryland may require you to file certain applications, obtain proper licensing and maintain specific insurance. It may be advisable for you to file a Combined Registration Application to cover a swath of needs—such as payroll tax withholding, unemployment insurance and more.