A Maryland LLC operating agreement is a document that outlines company goals, regulations, and structure, distribution of profits and ownership, LLC member obligations, and decision-making processes. Operating agreements are especially critical for multi-member LLCs. In the event of any legal proceedings, they provide a framework for handling various issues.
Is an LLC Operating Agreement Required in Maryland?
NO, Maryland does not require businesses to have an LLC operating agreement. Even though you don’t legally need it, you should still create one for internal use.
By Type
Single-Member LLC Operating Agreement
Set the rules for running a single-person limited liability company.
Multi-Member LLC Operating Agreement
Establish a clear and concise operating plan for your LLC.
Laws
- LLCs are governed by the Limited Liability Company Act – Title 4A of the Code of Maryland.
- Operating agreements statutes: § 4A-402.
Costs and Fees
The cost of registering an LLC is low compared to other states. Here’s a breakdown of the filing costs:
- Articles of organization filing fee – $100 (plus $50 to expedite the filing time).
- Name reservation fee – $25.
- Annual report filing fee – $300.
How to Form an LLC in Maryland
If you need to know how to start an LLC in Maryland, just follow these six steps:
Step 1 – Name Your Company
The first step to creating a company is to select a name. Your company name is submitted along with the articles of organization. The name cannot resemble that of another business registered with the Maryland Department of Assessments and Taxation. Save yourself the hassle and check your name on the Maryland Business Name Database first.
Another option is to register a trade name. This is a good choice if you want to operate under a different name or change the name of your business. If you want to go this route, you’ll have to file a Trade Name Application with the Maryland Department of Assessments and Taxation.
Step 2 – Choose a Registered Agent
The next step is nominating a registered agent. An interesting thing to note is that any member of the LLC can also become a registered agent. Another option is using a professional registered agent service for a fee. An agent can also be a corporation or another LLC.
Registered agents, known as resident agents in Maryland, receive and process legal notices for your business.
Step 3 – Submit Articles of Organization
Submitting your articles of organization is the next crucial step in the process. If you choose to apply in person or by mail, you need to create the articles of organization. Submit the filled-out application to the Department of Assessments and Taxation, 301 West Preston Street, Baltimore, MD 21201.
Of course, applying online through the Maryland Business Express reduces the waiting time and hassle of applying in person. Head to the site, set up an account and file the digital form.
Step 4 – Create an Operating Agreement
The good news is you can draft a Maryland LLC operating agreement yourself. If you don’t know where to start, head to our Maryland LLC operating agreement template at the bottom of this page. It provides a comprehensive outline for your entire team to follow and sign.
Step 5 – Stay On Top of Taxes and Regulations
Once the state approves your articles of organization, you’ll need to apply for an Employer Identification Number (EIN). An EIN is mandatory for all companies with two or more employees and is obtained through the IRS website. You can also choose your LLC’s tax structure during the application.
Step 6 – File the Annual Report and Tax Return Form
Your report and tax return form is due every year in mid-April. You can easily file online or send the form and payment to the Maryland Dept. of Assessments and Taxation. The Government of Maryland website provides all the details for your submission. And be sure to file on time, as the late fees range from $50 to $500.
Some states require annual reports, and Maryland happens to be one of them. You can file the Annual Report and Personal Tax Form online through the Maryland Business Express portal. Alternatively, you can submit your documents by mail or in person.
Sample
Download our Maryland LLC operating agreement template below in PDF or Word format.
