Single Member LLC Maryland: Everything You Need to Know
Forming a single member LLC Maryland requires naming your company, filing your formation documents, and paying the required fees.4 min read
2. People Within Your LLC
3. Duration, Purpose, and Operation of Your LLC
4. Filing Your Annual Report
5. Taxes Your LLC Must Pay
Forming a single member LLC Maryland requires naming your company, filing your formation documents, and paying the required fees. After completing these steps, your company will be formed, and you'll be able to transact business in Maryland.
Starting a Single-Member LLC in Maryland
Naming your company should be your first step if you want to set up a single-member LLC in Maryland. First, check the Secretary of State's records to make sure your name is distinguishable from other Maryland registered business names. Second, make sure your LLC name contains one of the following abbreviations or words:
- Limited Liability Company.
- Limited Company.
- LC, L.C., LLC, L.L.C.
In Maryland, you can reserve your LLC name for a 30-day period.
Next, you should draft and file your Articles of Organization. Once they are complete, you can submit your formation documents to the Department of Assessments and Taxation.
Your Articles must include the following information:
- Addresses and names of Maryland LLC organizers.
- The name of the company.
- Your Maryland registered agent's street address.
- The address of your principal business place in Maryland, which must not be a P.O. Box.
When filing your Articles, you will need to pay a $100 fee.
People Within Your LLC
The organizers of your LLC are the people who do the work necessary to form your company. In Maryland, there must be at least one organizer, and this person does not need to serve a role in the company after formation is complete. LLCs in Maryland also must have at least one member. The sole member of an LLC in Maryland doesn't have to meet any age requirements, and you do not have to name them in the Articles of Organization.
LLCs in Maryland must have a registered agent that will receive legal correspondence and state notifications mailed to the business. Registered agents should have a physical street address in Maryland where they can be reached during standard business hours.
When choosing your Maryland registered agent, you'll have several options. First, you could appoint a Maryland resident as your agent. Second, you can select a domestic or foreign business entity that can legally transact business in the state. Your LLC cannot serve as its own registered agent.
Duration, Purpose, and Operation of Your LLC
When forming your LLC, you need to consider how long you wish your company to endure. In Maryland, LLCs automatically have a perpetual duration. If you want your LLC to end on a set date, you should list this date in your formation documents.
You will need to list an LLC purpose in your Articles of Organization. Most LLCs choose to list their purpose as conducting lawful business, although you can be more detailed if you wish. Acting as an insurer cannot be your company's purpose.
After you have filed your Articles of Organization, consider writing an operating agreement. With this document, you can outline your company's internal operations, including how you will manage your LLC.
There are no specific rules for drafting your Maryland LLC operating agreement, although there is some information that you should be sure to include:
- How your company is managed.
- How losses and profits will be allocated.
- Capital contributions of company members.
The Operating Agreement is an internal document, meaning filing with the state isn't required.
Filing Your Annual Report
Every LLC in Maryland must file a Personal Property Return. This document is due every year, and you should submit it to the Department of Assessments and Taxation. You can find copies of this report on the website of the Departments of Assessments and Taxation. If you do not file this report, your company will no longer have permission to do business in Maryland.
Make sure to file your company's Personal Property Report by April 15 each year. The fee you must pay will depend on your LLC's revenue and assets. The minimum fee is $300.
Taxes Your LLC Must Pay
It's important to understand that the income tax rate in Maryland is progressive, meaning the taxes your company pays will depend on how much it earns:
- 2 percent rate: $0 to $1,000.
- 3 percent rate: $1,001 to $2,000.
- 4 percent rate: $2,001 to $3,000.
- 4.75 percent rate: $3,001 to $150,000.
- 5 percent rate: $150,001 to $300,000.
- 5.25 percent rate: $300,001 to $500,000.
- 5.5 percent rate: $500,001 to $1 million.
- 6.25 percent rate: Over $1 million.
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