How to Form an LLC in Maryland | 2025 Guide

Maryland ranks as a top state for minority-owned businesses, with substantial support provided to thousands of small business jobs in fiscal year 2024¹. Learn how to form an LLC in Maryland and join a growing community of entrepreneurs benefiting from the state's strategic location, digital filing tools like Maryland Business Express, and a supportive regulatory environment designed to help small businesses thrive.

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How to Start an LLC in Maryland (Step-by-Step)

Step 1: Choose a Name for Your Maryland LLC

Every Maryland LLC must have a unique name that complies with state rules. The name must include "Limited Liability Company," "LLC," or "L.L.C." and must be distinguishable from other business entity names on file with the State Department of Assessments and Taxation (SDAT)². You can check name availability through the Maryland Business Express portal³.

You may reserve your name for 30 days for $25 if you're not quite ready to file the Articles of Organization.

Step 2: Appoint a Resident Agent

Maryland requires every LLC to appoint a resident agent—a person or business entity responsible for receiving legal notices and service of process. The agent must have a physical Maryland address and be available during standard business hours.

You can serve as your own resident agent or hire a professional registered agent service, especially if you don't have a physical presence in the state.

Step 3: File Articles of Organization

This document officially forms your LLC in Maryland. File the Articles of Organization with SDAT’s Taxation Charter Division either online⁴ or by mail.

Required information includes:

• Name of your LLC.
• Name and address of the resident agent.
• Principal office address.

Filing fee: $150

Processing time: 2–4 weeks by mail; expedited online filings typically process faster.

Step 4: Create an Operating Agreement

An operating agreement is not legally required in Maryland, but it's essential for defining how your LLC will operate. This internal document outlines roles, responsibilities, voting rights, profit distribution, and procedures for membership changes.

Even single-member LLCs should have one to strengthen legal protections and maintain clear operating procedures.

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Step 5: Get a Federal Tax Identification Number (EIN)

Issued by the IRS, your Employer Identification Number (EIN)⁵ is necessary for opening a business bank account, filing taxes, and hiring employees. You can apply for an EIN at no cost through the IRS website.

Step 6: File a Beneficial Ownership Report

Under the Corporate Transparency Act, most LLCs must report information about their beneficial owners to the Financial Crimes Enforcement Network (FinCEN)⁶. This includes individuals who own or control at least 25% of the company.

LLCs formed in 2024 or later must file the report within 30 days of formation.

Step 7: Register for State Taxes

Depending on your business activities, you may need to register with the Comptroller of Maryland for various taxes, such as:

• Sales and use tax.
• Employer withholding tax.
• Admissions and amusement tax.

Registration is available through the Maryland Business Express portal.

Step 8: File Annual Reports and Personal Property Tax Return

Each year, Maryland LLCs must file an annual report and a personal property tax return with SDAT. These filings are due by April 15, even if your LLC owns no personal property.

Filing fee: $300

Late filings may result in penalties or your LLC falling out of good standing.

Step 9: Open a Business Bank Account

Once you have your EIN and filed your Articles of Organization, you can open a dedicated business bank account. Keeping your business and personal finances separate helps preserve your liability protection and simplifies accounting.

What Are the Business Requirements for a Maryland LLC?

To remain compliant in Maryland, your LLC must:

• Maintain a Maryland-based resident agent.
• File annual reports and personal property tax returns.
• Keep a valid operating agreement (recommended).
• Maintain proper business records and financial separation.
• Register for necessary state and local taxes.

Failing to meet these obligations may result in administrative dissolution or loss of liability protection.

What Are the Benefits of Starting an LLC in Maryland?

Forming an LLC in Maryland offers several advantages:

• Limited Liability Protection: Owners are not personally liable for business debts.
• Tax Flexibility: LLCs are pass-through entities by default but can elect to be taxed as an S-corp or C-corp.
• Simple Formation and Maintenance: The process is manageable even without a lawyer.
• Access to Resources: The Maryland Business Express site streamlines the process for filings, tax registration, and licenses.
• Business-Friendly Geography: Maryland’s proximity to Washington, D.C., and major markets makes it a strategic location for many industries.

How Much Does It Cost to Start an LLC in Maryland?

Here’s a breakdown of the typical LLC startup costs in Maryland:

Item	Cost
Articles of Organization	$150
Name Reservation (optional)	$25
Annual Report and Personal Property Return	$300/year
Registered Agent Service (if outsourced)	$100–$300/year
Operating Agreement (optional, legal drafting)	Varies

To start an LLC in Maryland, you’ll pay a $150 fee to file the Articles of Organization. Optional costs include a $25 name reservation and $100–$300 annually for a registered agent service if you don't appoint yourself. The state also requires a $300 annual report and personal property return. While not mandatory, an operating agreement is highly recommended, with costs varying based on whether you create it yourself or use legal assistance.

Can I Open an LLC in Maryland Without Living There?

Yes. You do not need to reside in Maryland to form or manage a Maryland LLC. However, you must:

• Appoint a resident agent with a physical address in the state.
• Maintain good standing through filings and tax compliance.

Out-of-state business owners often hire a registered agent service to fulfill the local presence requirement.

Can a Nonresident Open a Company in Maryland?

Yes, non-U.S. residents can form an LLC in Maryland. You do not need to be a U.S. citizen or resident. However:

• You must appoint a registered agent located in Maryland.
• You may need an ITIN instead of an EIN if you're not eligible for a Social Security number.
• U.S. tax obligations may apply depending on your business activity.

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Maryland LLC vs Other States: How Does It Compare?

Let’s see how running an LLC in Maryland compares to some other nearby states.

Feature	Maryland	Delaware	Virginia	Pennsylvania
Formation Fee	$150	$90	$100	$125
Annual Report	$300 + property tax	No annual report for LLCs	$50	$70
Privacy	Moderate	High (no member info)	Low	Moderate
Court System	General	Chancery Court (strong for corps)	General	General
Foreign-Friendly	Yes	Very	Yes	Yes

• Maryland offers a streamlined filing process via Maryland Business Express, but its high annual report fee and personal property tax return add to the cost of compliance.
• Delaware is known for strong privacy and a specialized business court. It’s ideal for startups and investors but may require extra filings for out-of-state operations.
• Virginia is a budget-friendly choice with low annual fees and simple compliance, though it lacks strong privacy protections and a centralized digital filing system.
• Pennsylvania balances moderate costs and straightforward requirements, but its systems are less efficient than Maryland’s for online business management.

FAQs About Maryland LLCs

Are There Privacy Protections for Maryland LLCs?

Maryland offers moderate privacy protections. The names and addresses of members or managers are not required to be listed in the public Articles of Organization, but information submitted in annual reports may be public.

Why Do People Use Maryland for LLCs?

Business owners form LLCs in Maryland for its convenient Maryland Business Express portal, streamlined tax registration, strategic geographic location, and straightforward compliance process.

Is a Maryland LLC Tax-Free?

No. While Maryland LLCs benefit from pass-through taxation by default, they are still subject to state-level taxes such as sales tax or employer withholding. You must also file the annual report and personal property tax return, which carries a $300 fee.

What Are the Disadvantages of a Maryland LLC?

While Maryland offers many benefits for LLC owners, there are a few drawbacks to keep in mind:

• High annual report filing fee: At $300, Maryland's annual report fee is considerably higher than that of neighboring states like Virginia and Pennsylvania, making it a more expensive jurisdiction for long-term compliance.
• Personal property tax return requirement: Even if your LLC does not own any personal property, you're still required to file a return each year. This can create unnecessary administrative work for small or inactive businesses.
• Moderate privacy protections: Compared to Delaware, which offers strong anonymity for business owners, Maryland requires some ownership details to be submitted in annual reports, which may be publicly accessible.

Conclusion

Maryland offers entrepreneurs a strong legal and operational foundation, combining liability protection, tax flexibility, and strategic access to East Coast markets. The Maryland Business Express portal simplifies the process for both in-state and out-of-state business owners.

To remain in good standing, file your Articles of Organization, secure a federal tax identification number from the IRS, draft a clear operating agreement, and submit your annual reports and personal property tax return on time.

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Sources:

1. Maryland Ranks Top State for Minority-Owned Businesses – Governor’s Office (2024)
2. Maryland Department of Assessments and Taxation (SDAT)
3. Maryland Business Express – Entity Search
4. Maryland SDAT Forms Directory
5. Employer Identification Number – IRS
6. Beneficial Ownership Information (BOI) Reporting – FinCEN