There are a few different options when it comes to forming a business in Maryland. From a legal perspective, there are three main types of Maryland for-profit business entities: LLCs, S Corporations or C Corporations. For many entrepreneurs, Incfile believes an LLC provides the right ratio of liability protection and ease of administration.
In order to form an LLC in the state of Maryland, there are a few minimum requirements you must meet. These are a completed set of Articles of Organization, a business name and a fee you pay to the Maryland Department of Assessments and Taxation (SDAT). We recommend taking some other steps before formally starting your LLC:
- Research your target market to make sure there’s a demand for the products and services you provide.
- Read industry guides to give you a starting point in your niche.
- Create a comprehensive business plan that defines the most important aspects of your Maryland business.
- Write an Operating Agreement that covers how you will run your LLC.
After you’ve created your Maryland LLC, you will also need to review your business license requirements, understand ongoing filing needs, set up a separate business bank account and get an accountant.
In Maryland, you register a business by completing and filing your Articles of Organization with the Maryland Department of Assessments and Taxation. You will need to gather information about your business, fill out the form and send it to the Maryland SDAT along with your filing fee. This will formally create your LLC in Maryland.
You can file your Articles of Organization via the Maryland Business Express website or mail it in. Alternatively, Incfile can guide you through every step of the process by getting details from you and filing the form on your behalf — for free! There’s no additional charge for our basic LLC filing service, so all you need to do is pay the Maryland state filing fee.
At the time of writing the fee charged by the Maryland Department of Assessments and Taxation is $100. You can always check the latest Maryland filing fees here. You can also pay an additional $50 or $425 for expedited filing through Incfile, which will create your LLC faster. The amount of the expedited fee is dependent on how quickly you want your filing processed. Some LLC filing services do charge you extra to prepare and submit your filing documents, but at Incfile, we do this for free — so you only pay the state fee.
Once you’ve gathered all of your information together and filed your Articles of Organization (or had Incfile do it for you), it can take from 6-8 weeks for the Maryland Department of Assessments and Taxation to legally create your LLC. If you pay an additional $50 or $425 expedited fee, your LLC can be formed in as few 7-10 business days, or 24 hours.
There are a few ways to register your Maryland LLC name.
- If you’re forming a new business and your business name is unique in Maryland and meets state naming rules, you simply include it in your Articles of Organization.
- If you want to change the legal name of your business, file Articles of Amendment with the Department of Assessments and Taxation.
- If you just want to do business under a different name, you must file a Trade Name Application with the Maryland SDAT, or have Incfile do that on your behalf.
If you want to prevent people from using your business name across the U.S., you can file a trademark for the name. We can help.
In many other states, the formal documents that you file to form a corporation or LLC might be known as Articles of Incorporation. In Maryland, this document is called your Articles of Organization, and it performs the same functions as the Articles of Incorporation.
No, the State of Maryland does not currently allow for a Series LLC structure. A Series LLC is a special type of LLC where you create one “overall” business and then have individual, series LLCs within it, each counted as separate legal entities.
If you wish to change your Maryland Registered Agent you can do so by filing a Resolution of Change with the Department of Assessments and Taxation. Here at Incfile, we provide a free Maryland Registered Agent service for the first year if you file through us. If you’ve been using a different Registered Agent and want to switch to us, we’ll file the Resolution of Change on your behalf.
If you need to know the Registered Agent of a specific Maryland business, you can perform a Maryland Registered Agent search within the state's business database.
As an LLC, any business profits you earn will be reported on your personal 1040 filing and reported and taxed as “pass-through” income. You will typically need to pay:
- Self-employment or payroll tax on all business profits
- Federal income tax on profits after you meet your tax-free allowance
- Sales tax for selling taxable products and services
Maryland charges a 6 percent state sales and use tax on all retail sales, leases and rentals of most goods. You will also need to pay sales tax if you provide a taxable service. You can find a full list of taxable services here.
In order to make sales in Maryland, you will need to obtain a sales and use tax license from the Comptroller of Maryland. You can complete this process online.
The base rate for Maryland sales tax is 6 percent, and there may be additional sales tax depending on your region, county or city. Once you know your overall sales tax amount, calculate the value of all your taxable products and services. Then, multiply that by your sales tax rate to understand how much you will need to pay.
Once your LLC’s sales and use tax application is approved, you will receive documentation with instructions on how often you must file a sales tax return and pay sales taxes. Returns and payments may be due monthly, quarterly or annually.
No. The state of Maryland only leverages a franchise tax for the privilege of doing business on some public service businesses, meaning that most corporations won't be subject to this franchise tax.
If you plan to have your business operating at full capacity within Maryland, the chances that you'll need a business license are very high. The types of business licenses you need will vary depending on your type of business, industry, location and various other factors. We can research the types of business licenses you might need for you.