Updated November 27, 2020:

Forming an LLC Overview 

Your Maryland LLC filing will help you form a limited liability company in this state. There are a variety of company types that you can choose when starting a business.

The four most common company structures are:

  • Sole proprietorships.
  • Partnerships.
  • Limited liability companies (LLCs).
  • Corporations.

When starting a company in Maryland, forming a limited liability company is your easiest and least expensive choice. In Maryland, as in most states, you must fulfill some unique requirements when forming your LLC. One of the steps you will need to complete to form your Maryland LLC is registering with the Department of Assessments and Taxation. You must also follow LLC formation and naming rules and pay the required fees. 

Limited Liability Company (LLC) in Maryland

You can find the specific requirements for forming an LLC in Maryland in the Maryland LLC Act. Limited liability companies are not allowed to act as insurers but can engage in any lawful business activities. In the Maryland LLC Act, certain rules cover LLC operations in this state. However, the law offers some flexibility in regard to the powers of an LLC.

While LLCs can exist forever in Maryland, they can also be formed for a set period. After this time their operations will cease. Limited liability companies are allowed to transact business under the direction of company members and can also agree to contracts. Generally, LLC members can structure their company in whatever way they see fit. 

Steps to Start an LLC in Maryland

To begin forming your Maryland LLC, name your company. You should do enough naming research to be sure your desired name is suitable for your LLC and can be quickly searched by your customers and clients.

Guidelines for naming your LLC in Maryland include:

  • Your name must include LLC, L.L.C., or limited liability company.
  • You must file paperwork if you wish to use restricted words such as Attorney, University, or Bank.
  • You cannot use words such as FBI and Treasury that are related to government agencies in your LLC name.

Check the search tool on the State of Maryland website to make sure your desired LLC name is available. It's also a good idea to see if the name you want for your LLC is available as a URL so that you can reserve a website for your company.

Step two of starting your LLC is to hire a Registered Agent, which is a requirement for LLCs in Maryland. Registered Agents will accept legal papers on your business's behalf and can either be individuals or other businesses. Residents of Maryland and corporations that are eligible to perform business in the state can serve as your Registered Agent. However, an LLC is not allowed to be its own Registered Agent, although individuals in the LLC can serve this role.

Third, file the Articles of Organization for your LLC. In Maryland, this document is known as a Certificate of Formation, and you can file in-person, online, or by mail. In your Certificate of Formation, you should include:

  • Your desired LLC name.
  • Your LLC's purpose, which is usually the type of business you intend to perform.
  • Your company's address, which is where daily operations will occur.
  • Contact information for your Registered Agent, including their name and address.
  • Your Resident Agent's signature.
  • Your return address.

Before filing your Certificate of Formation, you must choose whether your company will be managed by the members of your LLC or by a professional manager.

When your LLC is member-managed, it means your members play an active role in your company's day-to-day operations, including casting votes to make business decisions. This management structure is often known as decentralized management because the control over the company is spread among members.

If you choose a manager-managed LLC, you will hire one or more managers to run your business in your stead. This can be much more efficient than member management, as company decisions can be made without gathering members for a vote. Because control of the company is given to a single manager or management team, this management option is often called centralized management.

If you need help with your Maryland LLC filing, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.