Maryland is home to a thriving business community, from small seafood shops along the Chesapeake Bay to innovative startups near the nation’s capital. If you’re ready to join them, forming a limited liability company (LLC) is one of the smartest steps you can take. An LLC protects your personal assets, offers management flexibility, and helps your business gain credibility in the marketplace.
Starting a successful LLC in MD begins with understanding the legal processes you must complete. Let’s explore everything you need to know to launch your business the right way in The Old Line State.
Related: LLC vs. LLP
How to start an LLC in Maryland in 5 steps
To open an LLC in MD, you need to name your LLC, appoint a registered agent, file the Articles of Organization, create an operating agreement, and get an EIN. Don’t let this scare you off! The process is simple once you understand it. Whether you want to start an online business or a brick-and-mortar storefront, you can complete everything online in just a few days or by mail within a few weeks.
Use this guide to kick off your Maryland venture. When you’re ready to take the next step, you can create your LLC for free with GoDaddy.
1. Choose a name for your LLC
The first step in starting your business is to choose a name for your LLC that’s both unique and compliant with state rules. In Maryland, your LLC name must:
- Include “Limited Liability Company” or an abbreviation like “LLC” or “L.L.C.”
- Be distinguishable from other registered businesses in Maryland
- Avoid restricted terms (like “bank” or “insurance”) unless you have approval
You can search for available names using the Maryland Business Express entity search. If you’re not ready to commit just yet, you can reserve your chosen name for 30 days for $25.
Get your business domain name
After you’ve locked in your LLC name, it’s a good idea to secure your digital presence with a matching domain. This will help customers find you online and give your business a professional edge. Use GoDaddy’s tool to search for a domain name that aligns with your LLC.
Get a DBA
Some businesses choose to operate under a “doing business as” (DBA) name in addition to their official LLC name. A DBA allows you to market your company under a different name without creating a separate entity. Your DBA will be registered through the Maryland State Department of Assessments & Taxation (SDAT). Registration costs $25. You can learn more about what is a DBA here and decide if it’s right for your Maryland business.
2. Appoint a registered agent
Every LLC in Maryland is required to have a registered agent. This person or company is responsible for receiving legal documents, tax notices, and official state correspondence on behalf of your business. Your registered agent must:
- Be a resident of Maryland or a business authorized to operate in the state
- Have a physical street address in Maryland (P.O. boxes are not allowed)
- Be available during normal business hours to receive documents
You can serve as your own registered agent, appoint another individual, or hire a professional service. Many LLCs opt for a professional service to prevent important documents from falling through the cracks.
3. File Articles of Organization
To officially form your LLC in MD, you’ll need to file Articles of Organization online or by mail with the State Department of Assessments and Taxation (SDAT). Be prepared to provide:
- Your LLC’s name and address
- The registered agent’s name and address
- The purpose of your business
- The signature of the organizer—read about why you need an LLC organizer here
The cost to file is $100. Once approved, your LLC is officially recognized by the state.
4. Create an operating agreement
An operating agreement outlines how your LLC will be managed. While Maryland does not legally require an operating agreement, it’s highly recommended for clarity and dispute prevention. Your agreement should cover:
- Your LLC type
- Ownership percentages of members
- Roles and responsibilities of each member
- Voting rights and decision-making procedures
- Rules for profit distribution
- Steps for adding or removing members
- Dissolution procedures if the LLC closes
Even if you’re the only member of your LLC, having this document adds structure and protection. Banks may also request a copy of your operating agreement before letting you open a business bank account.
5. Get an EIN
An Employer Identification Number (EIN) is issued by the IRS and acts like a Social Security number for your business. You’ll need one to:
- Open a business bank account
- Hire employees
- File federal and state taxes
- Apply for certain business licenses and permits
Maryland LLCs can apply for an EIN online through the IRS website.
How long does it take to get an EIN?
You can apply for and receive an EIN online in minutes. As soon as your application is approved, the IRS will provide your EIN.
How much does an EIN cost?
It is completely free to apply for and maintain an EIN. There are no processing or renewal fees. If you’re being asked to pay for your EIN, you’re likely applying through a third-party rather than the IRS itself.
How much does it cost to start and run an LLC in Maryland
Forming an LLC in MD is relatively affordable compared to other states. At a minimum, you should expect to spend about $125 to $175 in startup fees, depending on whether you choose standard or expedited filing. Beyond that, your LLC will have annual state requirements and taxes to plan for. Here’s a full breakdown of the costs you’ll encounter when starting and running your LLC:
- Articles of Organization filing fee: $100 to officially establish your LLC with SDAT. Optional expedited filing fee of $50.
- Name reservation fee (optional): $25, if you want to reserve your LLC name before filing.
- DBA fee (optional): $25, if you choose to secure one.
- Annual Report and Personal Property Return: $300, due every year to keep your LLC active and in good standing with the state.
- Registered agent fee: $0 if you serve as your own, or $100–$300 per year if you hire a professional service.
- Maryland state income tax: 2%–5.75% of your LLC’s taxable income, reported on each member’s individual return.
- Federal self-employment tax: 15.3% for Social Security and Medicare if you’re self-employed.
- Sales and use tax: 6% if your LLC sells taxable goods or services in Maryland.
- Employer payroll taxes: Costs vary if you hire employees. Don’t forget to consider the cost of unemployment insurance and state/federal withholding.
What happens after your LLC is up and running
Forming your LLC is a big milestone, but the work doesn’t stop there. Once your Maryland LLC is approved, there are a few more tasks to check off that will keep your business organized and compliant.
Open a business bank account
One of the most important things to do after forming your LLC is opening a dedicated business bank account. This keeps your personal and business finances separate, which is crucial for protecting your personal assets, building credibility with vendors, and simplifying bookkeeping. Most banks will ask you to provide:
- Your LLC’s Articles of Organization
- Your Employer Identification Number (EIN)
- Your LLC Operating Agreement
- A valid photo ID of the LLC’s owners or members
File for permits and required business licenses
Maryland does not require a general statewide business license, but depending on your industry and location, you may need specific permits or local licenses. For example, a restaurant may need a Food Service Facility License from the local county health department, while a small construction firm might need a Home Improvement Contractor License from the Maryland Home Improvement Commission (MHIC). These vary by city and county, so it’s important to verify what applies to your LLC before you open your doors.
To find out what licenses and permits your Maryland LLC needs, visit the Maryland OneStop licensing portal, check with your local county or city clerk’s office for location-specific requirements, and review industry-specific rules with the appropriate state agency.
File annual reports
Every Maryland LLC must file an Annual Report with the State Department of Assessments and Taxation. This report keeps your LLC in good standing and ensures your business information is up to date. Your report is due by April 15th each year, and costs $300. It can be filed online through the Maryland Business Express website.
Things to know about Maryland LLCs
Before you finalize your Maryland LLC setup, it’s important to understand a few state-specific rules that can affect how you manage your business.
Maryland personal property tax
In Maryland, LLCs are required to file a Personal Property Return (PPR) each year, regardless of whether or not your business owns personal property. This filing is done alongside your Annual Report with the State Department of Assessments and Taxation (SDAT).
The personal property tax applies if your LLC owns tangible assets like furniture, equipment, machinery, or tools located in Maryland. The return ensures counties can levy taxes fairly on property used for business purposes. Here are a few compliance tips:
- File on time: Both the Annual Report and Personal Property Return are due by April 15 every year.
- Report accurately: List all business-owned property located in Maryland, even if it’s fully depreciated.
- Track exemptions: Small businesses with minimal property may qualify for exemptions depending on the county.
- Keep records: Hold onto receipts and depreciation schedules for property you report.
Obtain a Certificate of Status
A Certificate of Status is an official document from the Maryland SDAT that proves your LLC is legally formed, compliant with state requirements, and authorized to do business. Banks, investors, and other states often request this certificate when you’re opening accounts, applying for loans, or registering to operate outside Maryland. You can obtain a plain copy through the Maryland Business Express website for $20, or a certified copy for $40.
Start your Maryland LLC today
Starting an LLC in Maryland gives you the legal protection and structure to grow your business with confidence. With the right name, paperwork, and ongoing compliance, you’ll be ready to build something lasting. When you’re ready to take things online, GoDaddy Airo is here to help with everything from securing your domain to creating your website and reaching customers.
FAQ
Do you have to renew your LLC every year in Maryland?
You don’t have to renew your LLC every year in Maryland. However, you do need to file an Annual Report and Personal Property Return with the Maryland State Department of Assessments and Taxation (SDAT). This filing is due by April 15 each year and includes a $300 fee.
Do I need a business license if I have an LLC in Maryland?
Whether you need a business license for your Maryland LLC depends on your municipality and industry. Maryland does not issue a general statewide business license, but many industries and local jurisdictions require specific licenses or permits. For example, restaurants need a Food Service Facility License, construction companies may need a Home Improvement Contractor License, and retailers must have a Sales and Use Tax License. Always check state and local requirements before opening your doors.
How long does it take to set up an LLC in Maryland?
If you file online through Maryland Business Express, your LLC is usually processed in about 7 business days. You can expedite processing for an additional fee, if needed. Mail filings can take 4–6 weeks.
How much tax does an LLC pay in Maryland?
Maryland LLCs are generally treated as pass-through entities, so the business itself doesn’t pay corporate income tax. Instead, profits are reported on the members’ personal returns. Here’s what that usually looks like:
- Maryland state income tax: 2%–5.75% of taxable income
- Federal self-employment tax: 15.3% if you’re self-employed
- Sales and use tax: 6% if your LLC sells taxable goods or services
- Employer payroll taxes: Additional costs if you have employees
