How to Form an LLC in Maryland (2026)

1. 1Choose a name for your LLC and verify availability by searching the Maryland SDAT business entity database. Your name must include "Limited Liability Company," "LLC," or "L.L.C."
2. 2Appoint a registered agent with a physical street address in Maryland.
3. 3File Articles of Organization with the Maryland State Department of Assessments and Taxation (SDAT). The filing fee is $100. File online through Maryland Business Express.
4. 4Obtain an EIN (Employer Identification Number) from the IRS at no cost.
5. 5Create an operating agreement. Not legally required in Maryland but strongly recommended.
6. 6Open a business bank account with your Articles of Organization, EIN, and operating agreement.
7. 7Obtain any required business licenses and permits.
8. 8File your first Annual Personal Property Return (annual report) by April 15. The fee is $300.

• ✓Obtain an EIN from the IRS (free, apply online at irs.gov)
• ✓Open a dedicated business bank account
• ✓Register for Maryland state taxes with the Comptroller of Maryland
• ✓Get business insurance (general liability at minimum)
• ✓Set up an accounting system to track income and expenses
• ✓Apply for any local business licenses or permits
• ✓File your first Annual Personal Property Return ($300) by April 15

Your Maryland LLC name must contain "Limited Liability Company," "LLC," or "L.L.C." Restricted words like "Bank," "Insurance," or "Trust" require additional licensing. The name must be distinguishable from existing business entities registered with SDAT.

Maryland LLCs are pass-through entities by default. Members pay Maryland individual income tax on their share of profits (rates from 2% to 5.75%, plus county taxes of 2.25% to 3.2%). Maryland does not impose a franchise tax on LLCs, but the $300 annual report (Annual Personal Property Return) is one of the highest in the country.

LLC vs. other structures in Maryland

Maryland is one of the most expensive states for ongoing LLC maintenance due to the $300 annual report. Combined with state and county income taxes (effective rate up to 8.95%), Maryland is a high-cost state for LLCs. For profitable businesses, an S-Corp election can help reduce self-employment taxes.

• •File the Annual Personal Property Return by April 15 each year — $300 fee
• •Maintain a registered agent with a physical address in Maryland at all times
• •Keep your operating agreement current and update it when membership changes
• •File Maryland state income tax returns for all members receiving pass-through income
• •Renew any local business licenses or permits as required

Maryland offers a reasonable cost structure for LLCs. The $100 filing fee is competitive, and ongoing costs are manageable. If you operate in Maryland, forming your LLC here makes the most sense.

In general, you should form your LLC in the state where you physically live and conduct business. Forming in a "tax-friendly" state like Wyoming, Delaware, or Nevada sounds appealing, but if you operate in Maryland, you will still need to register as a foreign LLC there — paying fees in both states.

An LLC is almost always a better choice than operating as a sole proprietorship because of the personal liability protection it provides. However, if your LLC is highly profitable, you should talk to a CPA about electing S-Corp tax treatment to potentially reduce your self-employment tax burden.

What Maryland LLC Owners Need to Know

• •Maryland's annual report is technically called the Annual Personal Property Return and costs $300
• •Maryland is one of the most expensive states for annual LLC maintenance
• •Business filings go through SDAT, not the Secretary of State
• •Expedited 2-hour processing is available for $425

Official Maryland Resources

• Maryland SDAT — Business Services
• Maryland Business Express