How To Start a Maryland LLC

Before we jump into how to start an LLC in Maryland, I always like to cover what types of businesses you could start and what they are known for. If you’re looking for how to start a crabbing business, you’ve come to the right state! Maryland is known just for that and the city of Baltimore.

Once you get your Limited Liability Company up and running and have your EIN for the Internal Revenue Service, you’re going to need to get a few additional services setup.

See the box below for some ideas but if you want to go through this step by step – see the process below. Alright – let’s get started on your journey of how to start an LLC in Maryland.

Name Your Maryland LLC

The first step is to come up with a name for your LLC. The best way to do this is by brainstorming a list of ideas with some friends or business partners. I recommend you stay away from personal names like ‘Mike’s Crab Shack’ and go for something that sounds more professional.

Your Maryland LLC name must contain the words “Limited Liability Company” or the abbreviation “L.L.C.” This is part of the Maryland LLC naming guidelines and you can find the rest of the details on that here:

https://businessexpress.maryland.gov/plan/select-business-name

Before you can do anything, you need a name and not just any name. You’ll need a business name for your Maryland LLC that is not a Maryland business today. There is a very simple search page at Maryland.gov that’s going to tell you whether or not you can continue with the name you have in mind.

Check it out here: https://egov.maryland.gov/businessexpress/entitysearch

Once you’ve figured out if your Maryland LLC business entity can use this business name, you’re going to want to make sure you can get the website domain too. GoDaddy is typically the best place to go for that so make sure you can get your business name with that domain so you can feel comfortable and confident that the state will allow you to use the name and you can operate your Maryland LLC with the same name.

Whether you’re going to be operating a Single Member LLC, Maryland Limited Liability Company, Foreign LLC or have an existing LLC that you’re trying to update with a new business name – you will need to do this name search and make sure the state is ok with it.

Choose your registered agent

The next step is to find a Maryland LLC Registered Agent. This person or business will receive official legal and tax correspondence on behalf of your LLC. The LLC Registered Agent must have a physical address in Maryland and be available during normal business hours.

You are not required to use a professional service as your LLC’s Registered Agent. You could designate a friend or family member, but we don’t recommend it. Since the Registered Agent will have your LLC’s formations documents and other important filings at their address, you probably don’t want to burden someone you know with that responsibility.

There will be law firms you can use as a registered agent which could be some type of professional services organization. Your business entity will need to have a registered agent with a resident agent who will help your LLC members make sure that you’re following Maryland law when it comes to the business structure you’re setting up.

If you’d prefer to use a service that is not a Maryland LLC law firm, you can go to one of the services I recommend and in this case – I’d recommend using Northwest Registered Agent

I recommend using Northwest Registered Agent because it’s one of the largest and most well-known Registered Agent services in the country. Plus, their $125 yearly fee includes a full year of FREE LLC formations service (a $100 value). So if you use Northwest to form your LLC, you’ll get your first year of Registered Agent service for free!

Go and check them out and you’ll feel comfortable in the decision you’re making not only because they help form other Maryland LLCs but because they have a registered agent service that’s free for the first year.

Prepare and File Articles of Organization

Articles of Organization is an official form for establishing your LLC and provides information about your company and business activities.

You’ll need to prepare a form for organization and submit it to the Maryland Department of Assessment and Taxation for proper registration with your Maryland LLC.

Here are the items you need to include in your Articles of Organization:

• The name and address of the LLC
• The LLC’s purpose
• The name and address of the LLC’s Registered Agent

Additionally, the Articles of Organization must be signed by a Maryland organizer. The organizer can be anyone chosen by the LLC’s members, but is typically one of the LLC’s founders. If you’re going to be submitting this form to a government agency, you’ll want to make sure it’s done right for your individual or business entity. The Maryland State Department will want to make sure you’re going to conduct business the right way as you hire employees.

Make sure you can either mail in your filing or submit it online. If you file mail, you will need to include a check or money order for the filing fee made out to “Department of Assessments and Taxation.”

If you want to file online, you will need to create an account with Maryland Business Express.

Create an operating agreement

Now onto operating agreements – this is one of my favorite topics. It’s that document that says ‘hey we’re real!’. It’s one of these amazing business tools that will help you keep business assets in line for your LLC operating agreement.

The LLC Operating Agreement is an internal document that outlines how the LLC will be managed and governed. It’s not required by Maryland law, but we highly recommend creating one.

Why? Because it can help prevent misunderstandings and disagreements down the road by clearly defining each member’s roles, responsibilities, and ownership percentages.

It can also help you avoid personal liability for business debts and obligations by showing that your LLC is a separate legal entity from you as an individual.

We recommend having an Operating Agreement even if you’re the only member of your LLC because it can still provide valuable protection for your personal assets in the event your LLC is sued.

The operating agreement will be your go to document to for all LLC owners. As you’re going through your LLC formation, you’ll want to make sure you keep track of what your LLC owns.

If you do choose to create an Operating Agreement, make sure all LLC members sign and date it. You can keep it on file with your other business documents, but there’s no need to submit it to the state.

Now that you understand what’s needed to Start an LLC in Maryland, let’s go to the last true step for getting your LLC filed on Preston Street Baltimore.

Get an Employer Identification Number

The Internal Revenue Service is going to want to see that you have an Employer Identification Number.

This Federal Employer Identification Number (also called a Federal Tax Identification Number) is what you’ll need to collect sales tax and just feel like your operating agreement is accurate and your Maryland LLC is on the right track to operating in the way it needs to be legally.

To apply for your EIN, you can do it online, by fax, or by mail. If you’re applying online, you’ll need to have a Social Security Number or Individual Taxpayer Identification Number for the responsible party.

If you want to do it by fax, you can fill out form SS-4 and fax it to the IRS. The number will be listed on the form. If you want to apply by mail, you can fill out form SS-4 and mail it to the address that will also be provided.

You should receive your EIN within four weeks if you applied online, by fax, or by mail.

Alright – now that you are looking like a professional LLC with your EIN and have a comprehensive operating agreement in place, you’re going to be ready to go as one of the many small business owners in Maryland.

Let’s get started with your business and make sure you’re one of the business entities that is setup like most businesses in the state – which means you need a business bank account!

Open A Business Bank Account

You’ve got your EIN and you’re looking like a business. The next step is to open up a business bank account.

This will help you keep your personal and business finances separate, which is important for both legal and tax purposes. You’ll need your EIN to open a business bank account.

When you’re looking for a business bank, it’s important to find one that fits the specific needs of your business. Some factors you may want to consider include:

• Location: If you have brick and mortar storefront, you may want a bank that has branches near you. If you do most of your business online, a national bank with good online banking features may be a better fit.
• Minimum balance requirements and fees: Some banks charge monthly maintenance fees or require you to keep a minimum balance in your account. Others may waive these fees if you meet certain criteria, such as making a certain number of transactions per month.
• Business lending: If you’re planning to grow your business and will need to borrow money down the line, you may want to consider a bank that offers small business loans.

Once you’ve picked the perfect bank for your LLC, you should go apply for a business credit card with AMEX. It’s a great way to get started and will give you what’s needed!

Get Small Business Insurance

Now that your LLC is up and running, you need to make sure it’s protected with small business insurance.

There are a number of different types of insurance policies available, and the right coverage for your business will depend on several factors, such as the type of business you have, the products or services you sell, and whether you have employees.

Some common types of business insurance policies include:

• General liability insurance: This policy can protect your business from claims arising from property damage, personal injury, and advertising injuries.
• Product liability insurance: If you sell a product, this type of insurance can protect your business from claims resulting from injuries or damages caused by your product.
• Professional liability protection insurance: If you provide professional services, this policy can protect your business from claims arising from errors or omissions in your work.
• Workers’ compensation insurance: If you have employees, this type of insurance is required in most states and can help cover the costs of medical care and lost wages for employees who are injured on the job.
• Business interruption insurance: This policy can help cover the costs of lost income and expenses if your business is forced to close temporarily due to a covered event, such as a fire or natural disaster.

There are a number of different ways to get small business insurance, including through an insurance broker, an online insurance marketplace, or directly from an insurance company.

I recommend you go to commercialinsurance.net and they will give you a fantastic quote to get you started here.

When you’re ready to purchase insurance, be sure to shop around and compare rates from different insurers to get the best coverage for your business.

Get a Business License

Depending on the type of business you have and the products or services you sell, you may need to get a business license from the state or local government.

Business licenses are typically required for businesses that sell goods or services, and they can vary depending on the type of business you have. For example, businesses that sell food or alcohol may need a food license, and businesses that sell cosmetics may need a cosmetology license.

To find out if your business needs a license, you can contact your state or local business licensing office.

File an Annual Report

In most states, LLCs are required to file an annual report with the state. The requirements for filing an annual report vary from state to state, but in general, you’ll need to provide information such as your LLC’s name, registered agent, and address, as well as the names of your LLC’s members and managers.

The annual report is typically due at the end of the year, and if you don’t file it on time, your LLC may be subject to late fees or even dissolved.

To find out if your LLC is required to file an annual report, you can contact your state’s business filing office.

Pay Annual Taxes

LLCs are typically not required to pay federal income taxes, but they may be required to pay annual taxes in some states. For example, LLCs in Alabama, Delaware, and Nebraska are required to pay an annual franchise tax, and LLCs in Colorado and North Carolina are required to pay an annual registration fee.

As a part of this you’ll have annual reports to keep track of this and make sure that you’re tracking your personal property tax return too because as you have more online filings – filing fees will add up and you’ll the IRS website isn’t the easiest thing to use.

It’s also important that you have something to keep track of your business expenses so make sure one of your business tools is Quickbooks or some type of business expense software.

To find out if your LLC is required to pay annual taxes, you can contact your state’s tax office.

FAQs

Do I need a business license to start an LLC?

The answer to this question depends on the type of business you have and the products or services you sell. Business licenses are typically required for businesses that sell goods or services, and they can vary depending on the type of business you have.

To find out if your business needs a license, you can contact your state or local business licensing office.

Do I need to file an annual report for my LLC?

In most states, LLCs are required to file an annual report with the state. The requirements for filing an annual report vary from state to state, but in general, you’ll need to provide information such as your LLC’s name, registered agent, and address, as well as the names of your LLC’s members and managers.

To find out if your LLC is required to file an annual report, you can contact your state’s business filing office.