A limited liability company is a popular business structure. LLCs effectively relieve owners, referred to as members, from personal financial responsibility for most debts and actions of the company, and provide for increased tax flexibility. The profits and losses of the LLC “pass through” the business to the LLC members, who report this information on their personal tax returns. Knowing how to form an LLC in Maryland will help ensure that you can get your business off the ground without delay.
The first step to forming a limited liability company in Maryland is the selection of a name for your business. State law requires that your name be unique and not deceptively similar to another business operating in the state. The name must also include either the words “limited liability company” or the abbreviation “L.L.C.,” “LLC,” “L.C.,” or “LC.” You may search for the availability of any name through the Maryland government website.
Articles of Organization
Once you select a name for your LLC, the next step is to draft the articles of organization. This is a brief document that includes the business's name and purpose. You must also include an office address and the name and address of your registered agent. The registered agent is the person appointed to receive official legal correspondence for the LLC. You must file the articles of organization with the Maryland Department of Assessments and Taxation and pay a filing fee to officially form your Maryland LLC.
Once you filed the articles of organization, the next step is to draft an operating agreement. Although not required under Maryland law, operating agreements are helpful in determining the roles of each member and how to resolve disputes should they arise. Although there is no set form that operating agreements must take, they often cover the allocation of profits and losses among members, how member meetings are organized, how the company is to be managed, and the division of the management responsibilities among members. Once complete, the LLC keeps the agreement rather than filing it with the state.
While your LLC is operating, you must adhere to the Maryland filing requirements. State law requires that your business file a personal property return. You must return this form to the Maryland Department of Assessments and Taxation each year by April 15 along with a filing fee. Depending on the nature of your business, you may also need to obtain state or local business licenses.