Chesapeake Bay. Baltimore. Blue crabs and Pit Beef. Maryland is known for many things including the unrivaled Babe Ruth.
If you are considering forming an LLC in Maryland, you may be wondering what steps you need to take and how much it will cost. Here is a summary of the process for starting an LLC in Maryland, along with the pricing and documentation that will be required.
Summary
In addition to its many other advantages, a limited liability corporation (LLC) provides small enterprises with protection from legal responsibility and favorable tax treatment. Follow the steps below for getting your Maryland limited liability company into operation after you’ve decided that an LLC is the most suitable corporate entity for your requirements.
Note that you have the option of forming the limited liability company (LLC) yourself, or you may select a reputable company formation agency to do all of the legwork on your behalf.
1. Give Your LLC in Maryland a Name
When choosing a name for a limited liability company (LLC) in the state of Maryland, there are two primary rules that must be followed:
- The name of a limited liability company (LLC) must be able to be differentiated from the names of other business organizations already registered with the Maryland Department of Assessments and Taxation.
- One of the following terms or abbreviations must be used in the name of a limited liability company (LLC): “Limited Liability Company,” “LLC,” “L.L.C.,” “LC,” or “L.C.”
Make a reservation for your LLC name with the Dept of Assessments and Taxation
After deciding on a name for your limited liability company (LLC), you can protect it from being used by another company by reserving it with the Maryland Department of Assessments and Taxation. This will ensure that your chosen name will not be taken before you are able to legally establish your LLC.
To begin, you will need to utilize the Business Express Business Name Search in Maryland to see whether or not the name you have selected is already in use within the state. If the name you want to use is available, you should communicate your desire to reserve it by sending an email to: sdat.charterhelp@maryland.gov.
2. Choose a registered agent in the state of Maryland
Every limited liability company in the state of Maryland is required to establish a local agent where legal documents may be served. If the limited liability company (LLC) is taken to court, this refers to a person or company that has agreed to accept service of process on its behalf.
It is acceptable for the Registered Agent to either be a resident of Maryland or a business organization that is permitted to conduct operations in Maryland. It is required that the Registered Agent have a real, live street address in the state of Maryland.
What exactly is the role of a Registered Agent?
A Registered Agent receives tax forms, legal paperwork, lawsuit notices, and government contact on behalf of your firm. Consider the role of the registered agent as that of the point of contact for your company with the state.
Who is eligible to serve as a Registered Agent?
A Registered Agent must either be an individual who resides in Maryland on a permanent basis or a corporation that is permitted to carry out commerce in the state of Maryland, such as a company that offers Registered Agent services. You have the option of selecting anybody who works for the organization, including yourself.
3. Publish your company’s articles of incorporation
Your limited liability company (LLC) will be formally recognized after you have a document called the Articles of Organization that lays forth fundamental information about your business. Because this form serves as the legal registration for your company with the state, it is essential that all of the details be accurate.
What should be included in a company’s Articles of Organization?
When completing the Articles of Organization for your Maryland LLC, you are required to give the following information:
- LLC’s name
- LLC’s duration—perpetual or limited
- The location of the main office of the limited liability company.
- The name and location of the registered agent for the limited liability company
- Location where the Secretary of State should send notifications to the limited liability company (LLC) through mail.
- How the Limited Liability Company (LLC) will be run: by its members or by its managers
- Whether or whether the limited liability company will provide business services
- Names and addresses of all of the organizers of the limited liability company, as well as
- Identifying information for at least 1 member or manager member who has oversight responsibilities for the LLC’s daily activities.
Submission of Your Organization’s Articles of Incorporation
Articles of Organization must be filed with the state of Maryland, which will cost you $100, if you want to formally establish your limited liability company in Maryland. You may get the form from the Department of Assessments and Taxation in Maryland.
You will be required to provide the name of a registered agent who has a mailing location in the state of Maryland when you fill out the form.
It is necessary for the company’s registered agent to be reachable during regular business hours so that they may receive important legal and tax paperwork on behalf of the company.
Although the registered agent of the limited liability company (LLC) must be located inside the state, the LLC’s real owners may come from any country and be of any age.
4. Obtain a Certificate From the Government of Your State
After the formation paperwork of the LLC has been submitted and authorized, the state will issue you a certificate that proves the LLC officially exists. If you request a copy and pay appropriate postage, the state will mail you the certificate.
With this certificate, the limited liability company will be able to get an Employer Identification Number (EIN), as well as business permits and a bank account for the firm.
5. Draft an Operating Agreement for Your Company
Although establishing a detailed LLC operating agreement is not a legally required step for incorporating a limited liability company in the state of Maryland, it is highly suggested for all new limited liability firms.
The following items should be included in the operating agreement:
- Describe the business structure of the limited liability company.
- Determine the specific roles and responsibilities that each member of the LLC will have.
- Describe in detail how the limited liability company will be operated.
Significant legal and logistical challenges might await a limited liability company (LLC) in the absence of an operating agreement that defines the precise responsibilities of its members.
6. Obtain a number that identifies you as an employer (EIN)
A number of limited liability companies (LLCs) will be required to get a Federal Employer Identification Number (EIN), often known as a tax ID number.
An Employer Identification Number (EIN) is a nine-digit number that identifies your company to the Internal Revenue Service (IRS). You need an EIN in order to pay federal employer taxes, open a bank account such as a Bluevine or Kabbage account, or recruit staff.
On the website of the Internal Revenue Service (IRS), which is accessible without charge, you may check to see whether you need an EIN and submit an application for one online.
Single-member limited liability companies, which are an exemption to the rule that most firms are required to acquire an EIN, may instead use the owner’s Social Security number.
Business Licenses
Depending on the nature of their operations and where they are located, some limited liability companies (LLCs) doing business in the state of Maryland may be needed to get one or more business licenses or permits from the state or from their respective municipal governments.
Consult the Maryland Start a Business Guide, which is made available by the Secretary of State, for information on how to satisfy the prerequisites for obtaining a state license to do business in the state. The Maryland License Directory allows users to search for specific licenses that they need.
Contact a municipal or county clerk in the local district where your limited liability company (LLC) is based to get information on the local licensing requirements.
7. Send in your Yearly Renewals
In order to do business in the state of Maryland, limited liability companies (LLCs) are required to submit an Annual Report and Personal Tax Return (Form 1) to the Personal Property Division of the Maryland Department of Assessments and Taxation.
Either online via Maryland Business Express (MBE) or manually through the mail, the report and return may be sent. Every year, by the 15th of April, it must be submitted (extensions are possible). The price to file taxes each year is $300. (fee doesn’t incorporate any state tax liability for the LLC).
What are the costs and next steps?
Costs
When you submit your Articles of Organization with the Maryland Corporations Commission, you will be charged a fee of ten dollars.
The expedited processing will cost an extra fifty dollars. In addition, the state of Maryland mandates that all Maryland limited liability companies (LLCs) submit an Annual Report and Personal Tax Return, for which they are required to pay a filing fee of $300.
Consider the following additional fees that may be incurred by an LLC:
- Reserving a Name for an LLC
- DBA name is short for “doing business as.”
- Certified document copies
- Proof of existence (certificate)
What Comes Next?
When you register a limited liability company (LLC), you establish a legal basis upon which to operate your firm. Companies should make it a priority to maintain their limited liability company in compliance with state regulations and in an active position on the Maryland state’s website.
In addition, having a registered limited liability company enables you to perform the following:
Obtain any permissions or licenses that are required to run your business, such as those issued by the health department, the zoning department, the department of home occupations, the department of professional licensing, and so on. Some states need a seller’s permission to conduct sales
Register your company with the department of revenue in your state.
- Create a bank account for your company.
- Create a credit card account for your company.
- Invest in insurance coverage for your company.
- Create a trademark to protect both your company’s name and its logo.
LLC setup by yourself or company formations service?
To establish a limited liability company (LLC), you are not required by law to consult a lawyer. The majority of states enable the establishment of LLCs via the process of registering the business entity on the website of the secretary of state and through the Internal Revenue Service.
If you are not acquainted with the process of forming an LLC, your best bet may be to secure the services of a professional LLC setup firm so that you can be certain that the creation will go smoothly and quickly.
When entrepreneurs start a new firm, they may save startup costs and save valuable time by using a professional agency that specializes in company forms. They can take care of the tasks that you may not have the time to think about for a price ranging from $50 to over $500, and some examples of such things are as follows:
- Putting together articles of incorporation that identify the management of the LLC, the registration agent, and the date the company was formed.
- Taking up the role of registered agent for your firm.
- Keeping careful records in the event that there are investigations or litigation.
- Developing an operating agreement for an LLC that details your company’s who, what, when, where, why, and how, and putting it into writing (required in some states).
- Payment of filing fees and registration with the appropriate parties.
- Registering the name of your firm and ensuring that the name you choose for your limited liability company is accessible.
- Finishing up and turning in all of the necessary legal and formation documentation.
FAQs
How much does it cost to form a limited liability company in Maryland?
The initial formation fee for a Maryland limited liability company is $100, and the annual report filing fee is $300.
Are members of LLCs required to pay taxes in Maryland?
LLCs established in Maryland are obliged to submit tax returns with both the state and the federal government. The individual members of an LLC are the ones who are responsible for paying these income taxes, not the LLC itself. This means that owners of LLCs are obligated to pay sales, self-employment, and possibly payroll taxes to the state and the IRS.
How frequently do limited liability companies in Maryland need to be renewed?
LLCs in Maryland are required to renew their registration every year by submitting an annual report. This report is used to update your company’s details, such as its postal address, the kind of activities it engages in, and the condition of its business personal property.
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