Maryland LLC Articles of Organization: Everything You Need to Know
The Maryland LLC Articles of Organization is a document filed with the state and establishing the LLC's approval. Also called a Certificate of Organization, the Articles of Organization is required to form a business.3 min read
The Maryland LLC Articles of Organization is a document filed with the state and establishing the LLC's approval. Also called a Certificate of Organization, the Articles of Organization is required to form a business.
What is an LLC?
A limited liability company (LLC) is a distinct type of business, in which members are not held personally responsible for the actions and debts incurred by the business. As such, if the LLC is sued, owner's personal assets are protected from being used to satisfy a judgment against the business. Forming an LLC in Maryland also lends your business credibility not enjoyed by sole proprietorships and partnerships.
The Maryland LLC Act requires certain details for forming or creating an LLC. State laws also stipulate requirements for operating existing Maryland LLCs. An LLC in Maryland can conduct activities related to its lawful business purpose, activity, or investment regardless of whether it is for profit or not except when the company acts as an insurer.
Most LLCs are set up to exist indefinitely or until a certain time has passed. A company can carry out business and enter into contracts as its members see fit. With an LLC, members have a lot of freedom and flexibility in how the business is structured and operated. In fact, the law allows LLC members to decide the company's own provisions.
Unlike a corporation, however, LLCs are not required to establish a board of directors to make crucial business decisions, neither do LLC members need to appoint officers to manage daily operations. LLC members are the ones responsible for making important decisions and managing the business's daily operations.
Record-keeping requirements are also laxer with an LLC. While corporations must keep precise records of transactions, accounts, and meeting minutes, LLCs have more freedom to control their own records. Still, it makes good business sense to keep accurate records.
Even though the rules for LLCs are more flexible, the law requires every LLC to file Articles of Organization. You must also submit annual filings, which disclose gross sales to the State of Maryland.
Basics Steps to Forming an LLC
To form an LLC in Maryland, you must first choose your business name and include the phrase “Limited Liability Company” or its abbreviations (“LLC” or “L.L.C.”) at the end of the name.
Your LLC name must be different from any other Maryland business, including corporations. Use the Business Entity Search feature on the State Department of Assessment and Taxation's website to search your preferred name and determine if it's unique enough to use. Your LLC name cannot be misleadingly similar to any name already in the database.
You may also want to check your preferred name by filing a Trade Name Application with the Maryland Department of Assessments and Taxation. This application must be filed in person or via mail and the filing fee is $25. Expedited filing costs $75.
Keep in mind that restricted words, such as “university,” “attorney,” or “bank,” require additional paperwork and licenses. You also cannot use prohibited words such as “treasury,” “secret service,” or “FBI," which can confuse your business with a state or federal agency.
After you've checked to make sure your preferred LLC name isn't in use in Maryland, you can reserve your domain name. Do so even if you don't plan to make a website anytime soon, since purchasing the domain name now prevents others from snatching it up.
Once you've found a suitable name and registered it with the state, you must:
- Select your LLC's registered agent
- Complete the Articles of Organization
- Obtain an Employer Identification Number (EIN)
- Create an Operating Agreement
What is a Registered Agent?
Every LLC in Maryland must have a registered agent - someone who agrees to receive legal papers on behalf of the business. A registered agent must be a Maryland resident over the age of 18. You may also choose another Maryland LLC or corporation to act as your registered agent. In fact, you may serve as your own registered agent as long as you're a resident of Maryland and have a physical street address in the state.
What to Include in the Articles of Organization?
Maryland has made it easy to create your Articles of Organizing using this form. Every Articles of Organization should include:
- The LLC's name
- Its purpose
- Its business address
- The registered agent's name and physical address
Processing your Articles of Organization in Maryland costs $100 and typically takes four to six weeks.
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