How to Form an LLC in Maryland

Also referred to as the Free State, Maryland is one of the best located and easiest to do business in states on the Eastern Seaboard of the United States.

Maryland may be small in size, but it has one of the strongest economic footprints in the country. Some of its prominent features include its skilled workforce, proximity to D.C. as well as burgeoning industries like biotechnology, shipping, cybersecurity, and healthcare.

For both local Americans and global entrepreneurs wanting to tap into the the U.S. financial ecosystem, forming an LLC in Maryland is one of the best and most strategic moves.

We will start by thinking of the name of the business and the agent to be appointed, and look into more complex topics like filing compliance taxes with the state in the long term. This is achieving the goals of this article, where it is aimed to fully guide entrepreneurs on forming an LLC in Maryland.

Why Form Your LLC in Maryland?

Along with boasting a rich culture and history, Maryland has a solid economy fueled by technology, innovation, and federal institutions. Here’s what stands out.

✅ Prime Location

Being next to Washington D.C., MD is a hub on the U.S. East Coast, giving access to New York City, Boston, and Philadelphia. This is beneficial for businesses as they can access prominent markets, suppliers, and skilled workers.

✅ Skilled Workforce

Maryland has one of the highest concentrations of advanced-degree holders in the U.S. This is a prominent advantage for startups and tech-based businesses.

✅ Tax Incentives

Maryland does impose a state income tax, however, small businesses qualify for tax credits and incentive programs such as the Job Creation Tax Credit and Biotechnology Investment Incentive. In addition, LLCs are not required to pay franchise tax.

✅ Support for Small Businesses

MD is home to strong state-led programs such as venture capital, business accelerators, and incubators which aid small and startups. The Maryland Department of Commerce runs programs to support minority and international businesses.

Step-by-Step Guide for an LLC in Maryland

1. Choose a Name for Your Maryland LLC

Selecting a name for your LLC is crucial. The name should legally comply with Maryland regulations, which state that an LLC name must:

• Be unique and not the same as any other registered business in Maryland.
• Contain the words “Limited Liability Company” or “LLC”/ “L.L.C.” as an abbreviation.
• Not contain misleading words ( “bank”, “insurance”, or “university”) without prior special permission.

💡 Pro Tip: Align your business name with your brand, SEO strategies, and domain name.

🔍 Name availability criteria:

Cross-check your chosen LLC name against Maryland regulations and other businesses in the state with the Maryland Business Entity Search Tool.

📌 Optional: For $25, business owners have the option to reserve an LLC name for 30 days until formation is a viable option.

2. Appoint a Registered Agent in Maryland

Registered agents can be individuals or company representatives who legal documents for your LLC such as process services, court documents, and other government notices.

Requirements:

• You should either be a Maryland resident or a corporation that is permitted to operate in Maryland.
• You must possess a physical street address in Maryland. P.O. Boxes are not acceptable.
• You must be reachable during regular business hours.

📌 International Founders: You are legally required to appoint a registered agent with a Maryland address. If you do not live in the U.S., Bizstartz offers registered agent services for foreign clients wishing to form an LLC in Maryland.

3. File the Articles of Organization

To complete the registration of your LLC in Maryland, you need to file for Articles of Organization with the Maryland State Department of Assessments and Taxation (SDAT).

What you’ll need:

• Your chosen LLC name
• The purpose of the LLC (can be general)
• Name and address of the Registered Agent
• The address of your principal office
• Signature of at least one organizer

Filing Options:

• Online Filing (recommended): $100, typically processed within 7-10 business days.
• Mail Filing: $100 base fee + optional $50 expedited fee.

🖥️ File here: Maryland Business Express Portal

✅ Once approved, your LLC will receive a Certificate of Organization which allows the business to be active in the state.

4. Create an Operating Agreement

While an Operating Agreement is not a legal requirement in Maryland, it is strongly encouraged, particularly for multi-member LLCs and foreign owners.

This internal document defines the framework of an LLC by detailing the structure, ownership, rights, and duties. It also contains the relevant responsibilities of the members and managers.

Items to consider:

• Ownership percentage and the division among the members
• Voting rights and the procedures to use
• Methods of profit distributions
• Management structure, whether member-managed or manager-managed
• Regulations on member amendments and removals
• Dissolution procedures

💡 This document is crucial for resolving disputes and is frequently needed when a business bank account is set up, or when applying for business loans.

5. Apply for an EIN with the IRS

An EIN is a federal tax ID that American businesses and organizations need to obtain for tax filing. It is also essential for:

• Conducting business tax filings
• Setting up a business bank account
• Employing staff
• Setting up business credit accounts and payment processors

Process to obtain:

• US citizens and residents: Use the EIN application on the IRS website
• Non US residents: Complete and send Form SS-4 via Fax or Mail as online applications are for SSN holders.

📌 Bizstartz sheds light on the complexity of applying for an EIN as a non-resident or resident.

6. Register For Maryland State Taxes

Depending on the nature of your LLC’s offerings, it may be necessary for you to register for one or more of the Maryland state taxes:

Common taxes include:

• Sales and Use Tax: Applicable to businesses selling tangible goods.
• Withholding Tax: Applicable for businesses with employees.
• Unemployment Insurance Tax: Applicable for employers within Maryland.

📝 Register through the Maryland Combined Registration Online

Inactivity may incur penalties and interest.

7. Obtain the Necessary Business Licenses and Permits

Maryland does not possess a one-size-fits-all state business license, however, some professions and business activities may need licenses or permits.

For illustrative purposes:

• Restaurants or food services need permits from the health department.
• Contractors need licenses from the Maryland Home Improvement Commission.
• Retailers may require sales tax licenses.

Check the Maryland OneStop Portal for what licenses and permits your business needs.

📍 Local county and city branches may also require you to obtain additional local licenses.

8. File Annual Reports and Remit Personal Property Tax

In Maryland, each LLC is required to file an Annual Report alongside Personal Property Return with SDAT by April 15 each year.

Highlights:

• The filing fee for an Annual Report is $300.
• Even without property, you must file.
• If you do not file, your LLC may be forfeited or revoked.

🖥️ You can file using the Maryland Business Express Portal.

💡 You may also set calendar reminders or sign up with Bizstartz’s compliance monitoring for late restriction avoidance.

9. Create a U.S. Business Bank Account

A U.S. business account is crucial for your company’s finance management, client payments, and accessing U.S. merchant services such as Stripe, PayPal, and Amazon.

Required Documents:

• Articles of Organization
• EIN letter from the IRS
• Operating Agreement
• Passport or government issued ID
• US Address (some banks may require this)

📌 Bizstartz assists remote non U.S. residents with opening a U.S. bank account through our partner banks that accept foreign owners.

Special Considerations for Non-U.S. Residents

Non-U.S. entrepreneurs can legally establish and own an LLC in Maryland without needing to be U.S. citizens or residents. However, certain considerations apply:

✅ You Do Not Need:

• A U.S. partner or member
• A U.S. mailing address (but a Registered Agent in Maryland is still required)

✅ You May Need:

• An ITIN (Individual Taxpayer Identification Number) for tax obligations
• Registered Agent based in U.S.
• Help with obtaining EIN and setting up a bank account

📌 At Bizstartz, we assist international entrepreneurs with U.S. company formation and ongoing compliance, as well as banking.

Cost Breakdown: Forming and Maintaining an LLC in Maryland

Final Words

Setting up an LLC in Maryland grants you an opportunity to operate in one of the strategically located and economically booming states within the country.

If you are considering starting a consulting business, an eCommerce store, or even a tech startup, Maryland’s legal infrastructure along with its markets will give you a head start.

Due to requirements such as applying for an EIN, setting up a bank account, or ongoing compliance, the process may be simpler for residents, but still challenging for non-residents.

🚀 Start Your Maryland LLC with Bizstartz

At Bizstartz, we are fully equipped to assist both American citizens and foreign entrepreneurs establish and expand their businesses in the United States. We provide:

✅ LLC formation

✅ EIN and ITIN application

✅ U.S. Registered Agent service

✅ Remote U.S. bank account setup

✅ BOI filing

✅ Stripe & PayPal account support

👉 Click here to launch your LLC in Maryland with Bizstartz