What Is a Maryland LLC Operating Agreement?
A Maryland LLC operating agreement defines the rules for your LLC, including the management structure. With an operating agreement, you can decide whether your LLC is member-managed or manager-managed. This helps other entities determine who can sign contracts and legally bind the LLC.
With a Maryland operating agreement, you can also outline unique voting rights and buy-sell provisions. Without one, your LLC becomes subject to Maryland’s default LLC rules. While this lets your entity function, it may not operate according to the exact terms you’d like.
Your Maryland LLC operating agreement, governed by MD Corporations and Associations Code § 4A-402, will also help guide member departures. State law has minimal coverage on this topic, so your contract will help fill in the gaps. You can implement custom rules for members’ exits based on death, disability, divorce, or voluntary departure. This helps prevent membership interests from transferring automatically to parties outside the LLC, such as through inheritance.
Does Maryland Require an Operating Agreement for an LLC?
An operating agreement is not required for your LLC in Maryland, but it is highly recommended. Not only does it override the state’s default laws, but it also reinforces limited liability protection. This is important for both single-member and multi-member LLCs, as it reduces the risk of you being sued for your personal assets if the business experiences legal trouble.
Forming an LLC in Maryland
An operating agreement is not required, nor is it filed with the Maryland State Department of Assessments and Taxation (SDAT). However, to officially form your Maryland LLC, you must file the articles of organization with the SDAT.
Sample LLC Operating Agreement for Maryland
View our sample LLC operating agreement for Maryland to better understand how to set your unique ownership percentages, quorums, and other LLC details. Then, customize your agreement with Legal Templates’s guided form. Download a final copy in PDF or Word format to store internally and distribute to your LLC’s members.
