If you're thinking of forming your LLC in Maryland, it's good to know the ins and outs of the formation process and the costs you'll pay to the Secretary of State.
Working with our LLC specialists and business attorneys, we've researched the costs and fees of LLC formation so you can plan your budget well and take care of your filing fees.
Here’s everything you need to know.
Quick Summary
- An LLC costs $100 in Maryland to submit your Articles of Organization.
- All LLCs must file an annual report for a $300 filing fee to stay compliant.
- LLCs in Maryland are pass-through entities, although they're subject to a state income tax rate of 2%-5.75%.
How Much Does an LLC Cost in Maryland?
An LLC costs $100 in Maryland. This is for filing the basic Maryland Articles of Organization. Still, the amount can be higher if you include other services like name registration, registered agent service fee, annual report filing, Maryland taxes, and business licenses.
Maryland LLC Filing Fee
To properly register your Maryland LLC, you must submit a registration application of your Articles of Organization, and a $100 filing fee must be filed to the Maryland Secretary of State.
If you process your request online, the SOS will accept it within 7 business days of receiving it if you pay an extra $50. If you apply by mail, ordinary processing may take 6-8 weeks.
However, you can pay an additional $325 and $425 for expedited same-day shipping for online and mail submissions, respectively [1]. This way, it will lower the processing time of your Maryland LLC.
The Articles of Organization detail essential aspects of your Maryland LLC, such as your company name, principal address, resident agent information, and whether your LLC is managed by members or professional management.
Maryland Registered Agent Service Fee
A registered agent must be named for each Maryland LLC during registration.
As per Maryland law, the resident agent must receive and handle all legal notices, correspondence, and documents from the state on behalf of the LLC.
The registered agent service is also responsible for informing you as the company owner of the arrival and approval of these documents so that you can respond accordingly.
In Maryland, you can act as your own registered agent or select a trusted friend to take up the role for $0.
However, this means that you must meet all the registered agent requirements for being of legal age, having a Maryland physical address, and being in the office throughout business hours.
Starting your Maryland LLC and acting as the registered agent service simultaneously might be too much for one person; this is why it's best to hire a third-party professional registered agent service.
In this situation, depending on the Maryland registered agent service you partner with, you will pay an average yearly fee of $125. This fee may be more or less depending on which company you take on.
Maryland Tax
By default, all Maryland LLCs are pass-through entities; the firm needs to submit the members' income taxes.
However, LLCs must pay the state income tax rate of 2% for the first $1000 of business income and a maximum of 5.75% for a business income threshold exceeding 250,000.
Also, because LLCs in Maryland offer flexible taxation systems, you can select your LLC to be taxed similarly to a corporation. In this case, you'll be liable for paying m Maryland's 8.25% corporate income tax [2].
Other LLC Filing Costs
Apart from paying the basic fees for filing your incorporation documents, here are other Maryland LLC costs and fees.
1. Business Name Reservation
As per Section 505 of the Maryland Corporations and Associations Code, an LLC owner can reserve a business name for an exclusive 30 days.
To obtain and reserve a company name, Maryland costs $25 for regular processing and $20 for expedited processing.
During the reservation process, your LLC name must meet the name criteria in Maryland. It should end with "LLC" for a limited liability company and "LLP" for a limited liability partnership company.
Although not required, submitting a name reservation guarantees that your preferred name will be available when you form your LLC in Maryland. Make sure to check the availability of the Maryland LLC name before naming it.
2. Trade Name Registration
A trade name or a Doing Business As (DBA) refers to any name that a company employs that isn't its legal name. You must submit a trade name applied to the Maryland Secretary of State website, which costs $25 or $50 for expedited processing.
Checks are sent to the Department of Assessments and Taxation in Maryland.
3. Personal Property Tax Return/Annual Reports
To maintain good standing with the SOS and be able to conduct business in the state, all Maryland LLCs are required to submit an annual registration.
An annual report is a document that includes all the most recent details regarding your Maryland company, such as name changes or modifications to the registered agent.
The Maryland annual report fee is $300.
4. LLC Operating Agreement
A Maryland LLC operating agreement specifies the terms governing the limited liability company, its interests, activities, and management, as well as the sections governing the rights and obligations of its members.
Although operating agreements are unnecessary for Maryland, creating one to specify how the LLC should be managed is a good idea.
You can write a Maryland LLC operating agreement for yourself for free or get a professional to do it for you for $100 to $250.
5. Certificate of Status
An LLC's good standing with the state and payment of all taxes is evidenced by a Maryland certificate status.
The day and time your LLC was established in Maryland are also shown in this record.
The Maryland state department must receive $20 for the certificate of good status, and you can add another$20 for expedited processing.
Note that only the LLCs in compliance and in good standing with the state are granted access to this document.
6. Maryland Certified Document Copies
A certified copy of a legal document attests to the truthfulness of the official records you have submitted to the Maryland Secretary of State.
A certified copy costs $20 plus $1 for each additional page in Maryland. You can also pay an additional $20 for expedited processing.
When filing these documents, there's a service fee of 3% for card and PayPal payments and $3 for checks [3].
These records include the owner's name, the filing dates, and all other pertinent information concerning your Maryland LLC.
7. Employer Identification Number
After establishing a Maryland business, the next step is to apply for an EIN number.
A Federal Tax ID number is required for an LLC to engage in business operations in the US lawfully. Also, obtaining an EIN is necessary to create a business bank account and apply for company financing.
The Internal Revenue Service issues each firm with an EIN, which also serves as your corporate security number. Through their website, Maryland LLC owners can apply for a free EIN.
Alternatively, an EIN will cost you between $50 and $100 if you choose a professional agency.
Maryland Foreign LLC Registration
It costs $100 to register a foreign LLC in Maryland. This type of registration suits LLCs registered in different states but want to move into Maryland.
You can pay an additional $325 for expedited approval.
Also, note that after approval of the foreign LLC, you must obtain the necessary Maryland business license to start operating.
FAQs
Is Maryland an Ideal State For an LLC?
Yes, Maryland is an ideal state for an LLC because of its fast expedited file processing and favorable tax systems.
How Long Does It Take To Form an LLC in Maryland?
It takes 6-8 weeks to form an LLC in Maryland on standard shipping. If you want your LLC registration processed faster, you can pay $325 or $425 for same-day delivery online and by mail, respectively.
Do I Need To Pay Annual Maryland LLC Fees?
Yes, you need to pay annual Maryland LLC fees for your annual report and taxes. Also, if you've collaborated with a resident agent service, you'll have to pay their annual Maryland registered agent fee, which will vary depending on the company.
Do You Need Professional Help with Your Maryland LLC?
You have two options for creating an LLC in Maryland: you can do it all yourself or engage a business to handle it for you.
If you don't want to shoulder all the bureaucracies of document filing, check out our list of the top LLC services in Maryland to help you with the intense registration paperwork.
These LLC services have the best lawyers in Maryland to help you with any concerns about forming and running LLCs there.
Also, they will help you keep your LLC in the right standing with the SOS by promptly and punctually dealing with tax and compliance work on your behalf.
References:
- https://dat.maryland.gov/Pages/sdatforms.aspx
- https://www.marylandtaxes.gov/business/income/tax-information.php
- https://egov.maryland.gov/BusinessExpress/Payment/FeesSchedule
