Form a Maryland LLC
Create your Maryland LLC the right way. At LawInc we are Maryland Limited Liability Company formation experts who can help you form a Maryland LLC properly. We file the Maryland LLC Articles of Organization with the Maryland Secretary of State and prepare a customized operating agreement. We can also obtain the Maryland LLC’s EIN, in an quickly as 24 hours. Let LawInc guide you through the process of forming your Maryland LLC.
Let LawInc walk you through the Maryland Limited Liability Company formation process. Our clear, concise and easy to use website, helps keep things simple.
Maryland LLC Name
The first step in forming a Maryland Limited Liability Company (LLC) is selecting the business name. Maryland LLC names:
- Must contain the words must contain the words “Limited Company” or “Limited Liability Company” or the abbreviation “LLC,” “LC,” “L.C. “L.L.C.”
- The name of a Maryland LLC must be distinguishable on the records of the Maryland Sec. of State.
An available Maryland LLC name may be reserved for 30 days.
LawInc.com permits you to choose up to three names and will conduct a name search for your Maryland LLC, prior to filing.
Maryland LLC Formation
Maryland LLC Filing Procedure: When forming a Maryland LLC, the Maryland Articles of Organization must be filed with the Maryland State Department of Assessments and Taxation. The Maryland Articles of Organization must state:
- The Maryland LLC name.
- Name and address of each Maryland LLC organizer.
- Street address of Maryland registered agent.
- Street address of principle place of business (must be in Maryland and cannot be a PO box).
Maryland LLC Organizers: An Maryland limited liability company can be formed by one (1) or more organizers.
Maryland LLC Members: Maryland LLCs require 1 or more members. There is no residence or age requirement. Maryland LLC members are not required to be listed in the Articles of Organization.
Maryland LLC Duration: The period of duration of a limited liability company shall be perpetual unless the Maryland Articles of Organization place a limitation on the company’s existence or until dissolution or termination.
Maryland LLC Purpose: A Maryland Limited Liability Company may be organized under this title and may conduct activities in any state related to any lawful business, purpose, investment, or activity, whether or not for profit, except the business of acting as an insurer.
Maryland Registered Agent: An Maryland LLC must maintain a registered agent and office to receive service of process in Maryland. The Maryland registered agent should be available, at an Maryland physical address, during normal business hours to accept important legal and tax documents on behalf of the Maryland LLC. The registered agent can either be (1) a domestic entity or a foreign entity that is registered to do business in Maryland or (2) an individual resident of the state. A Maryland LLC may not act as its own agent.
Maryland LLC Operating Agreement: After filing, it is highly advised that an operating agreement is drafted which dictates the LLC internal affairs and management. There is no set criteria, but an Maryland LLC operating agreement should reference how the Maryland LLC is managed, allocation of profits and losses and member capital contributions. The Maryland LLC operating agreement does not need to be filed.
Maryland LLC Annual Report
Maryland LLC Annual Report: All domestic and foreign legal entities must submit a Personal Property Return to the Department of Assessments and Taxation. Failure to file a Personal Property Return will result in forfeiture of the right to conduct business in Maryland. Copies of the return are available on the Maryland State Department of Assessments & Taxation (SDAT) website. The returns are due April 15th of each year. The minimum fee is $300 and increases based on assets and revenue. For more information, visit: http://www.dat.state.md.us/sdatweb/personal.html.
Maryland LLC Taxes
Maryland State Income Tax: The income tax rate for Maryland is variable, depending on Maryland taxable net income:
|$0 – $1,000||2%|
|$1,000 – $2,000||3%|
|$2,000 – $3,000||4%|
|$3,000 – $150,000||4.75%|
|$150,000 – $300,000||5%|
|$300,000 – $500,000||5.25%|
|$500,000 – $1 million||5.5%|
|$1 million +||6.25%|
Federal Income Tax: An advantage of the LLC is its tax flexibility. LLC members are allowed to select how the entity will be taxed. An LLC may be classified for federal income tax purposes as either a:
- Sole proprietorship
- Partnership, or
Single member LLCs are treated the same as sole proprietorships. Profits are reported on Schedule C as part of your individual 1040 tax return. Self-employment taxes on Maryland LLC net income must be paid just as you would with any self-employment business.
Most Maryland multi-member LLCs elect to be treated as partnerships by the IRS and file IRS Form 1065. On this form, Maryland LLC profits are reported and allocated to each of the owners according to the Maryland LLC’s operating agreement. Each owner is given a Schedule K-1, which shows each owner’s share of LLC income or loss. The owner then reports and pays taxes on this income on the owner’s annual 1040 income tax return. It is important to note that as with sole proprietorships, all Maryland LLC profits are taxed to the owners, even if they are not actually distributed by the LLC. This situation can arise when the LLC needs to use its profits to pay ongoing expenses.
If pass-through taxation is not desired, an LLC may elect to be taxed as a corporation by completing IRS Form 8832. If this election is made, the LLC is taxed as a C corporation by the federal government. Because the corporate income tax rates for the first $75,000 of corporate taxable income are lower than the individual income tax rates that apply to the taxable income of non-corporate taxpayers, it is possible a net income tax savings can result from this tax election. Additionally, an LLC can be taxed like an S corporation by filing IRS Form 2553.
Federal Tax Identification Number/Employer Identification Number (EIN): The Maryland Federal Tax Identification Number, also known as the Tax ID Number or Employer Identification Number (EIN), is a number that is assigned to a business by the Internal Revenue Service. An EIN is like a Social Security Number for a business. It is a requisite for certain business functions such as opening bank accounts or hiring employees. An EIN is typically required if the Maryland LLC has more than one owner, or any employees.
Maryland LLC Dissolution/Cancellation
Acts Triggering Maryland LLC Dissolution: A Maryland LLC can be dissolved upon the happening of one of the following:
- At a time specified in the Articles of Organization or operating agreement;
- Upon occurrence of events specified in the Articles of Organization or operating agreement;
- Consent by the specific number or percentage of members indicated in the operating agreement;
- At any time there are no members; or
- Judicial decree to dissolve by a Court.