Maryland LLC Formation

Maryland LLC landscape

SDAT’s Business Express portal makes filing straightforward, but serious operators must plan for annual personal property returns, PTET/nonresident withholding, and county-level trader’s licenses. I treat Maryland entities as home-field operations: form locally, stay compliant, and only layer Delaware/holding companies when there is a financing or asset-protection reason.

Need a Maryland stock corporation instead? Read the Maryland corporation hub for parallel charter guidance.

Best-fit scenarios

Brick-and-mortar shops, contractors, and professionals whose licenses require Maryland good standing certificates.
Baltimore and Montgomery County real estate holding structures where lenders demand local control and SDAT filings.
Consultancies and medical/dental groups layering S-election + PTET to manage SALT caps.
Foreign investors who want a local forum clause and resident agent who can accept service instantly.

When to tread carefully

$300 per entity annual filings make multi-LLC real estate plans pricey—consider business trusts when appropriate.
Nonresident owners trigger 8%/8.25% withholding unless PTET is elected and funded.
No statutory series LLC option; separate charters or statutory trusts remain the cleanest asset partitions.
Local income taxes up to 3.2% stack on the 5.75% state rate for individuals.

Entity choice Confirm LLC vs professional LLC vs business trust vs corporation based on licensing, investors, and PTET goals.

Name & brand Run SDAT name search, check trademark conflicts, and queue trade name applications if storefront branding differs.

Resident agent Decide between individual RA (privacy tradeoff) or professional service. Secure written consent before filing.

Ownership stack Model cap table, contribution amounts, vesting, and whether equity pledges are needed for financing.

Tax treatment Choose default pass-through, S-election, or corporate election; map PTET timing and nonresident withholding procedures.

Local permits Identify county trader’s licenses, zoning clearances, professional board approvals, and BPOL filings before launch.

Formation workflow & first 90 days

Maryland sticks to basics: file Articles of Organization, appoint a consenting resident agent, and draft a robust operating agreement. The heavy lifting comes immediately afterward with bank covenants, personal property reporting, and tax registrations.

File-ready steps

1. Name clearanceSearch Business Express. Names must include “LLC/L.L.C.” and be distinguishable. Reserve for $25 if you need to hold it for up to 30 days.

2. Resident agentDesignate an individual Maryland resident or authorized service company at a street address. Obtain a signed consent; SDAT rejects unsigned filings.

3. Articles of OrganizationFile online or in person ($100). List LLC name, principal office, purpose (usually “any lawful business”), and resident agent/office. Same-day walk-in expedite is $425.

4. Operating agreement draftEven single-member LLCs should sign an OA covering capital accounts, tax allocations, transfers, and PTET obligations before revenue hits.

5. Maryland tax setupApply for EIN, then register for sales/use tax, employer withholding, unemployment, and local trader’s licenses via Maryland Business Express.

First 90-day checklist

Organizational meetingApprove OA, admit members, issue interests, authorize bank signers, and adopt intellectual property assignments.

Banking & accountingOpen dedicated accounts, set up bookkeeping (QuickBooks/Xero), and create document vaults for personal property support.

LicensingApply for county trader’s licenses, professional board registrations, and home-improvement or health department permits if required.

Payroll & benefitsEnroll with payroll provider, register for workers’ comp/unemployment, and calendar quarterly estimated taxes for members.

Calendar complianceLog April 15 report deadline, PTET election timing, contract renewal reminders, and CTA audit checks even though MD LLCs are currently exempt.

Operating agreement & ownership architecture

Title 4A defaults are blunt instruments. Sophisticated Maryland LLCs rely on detailed OA provisions to handle veto rights, nonresident withholding, drag/tag, and capital call mechanics.

Default vs tailored terms

Topic	Title 4A default	Attorney drafting focus
Governance	Member-managed equal voting.	Manager-managed boards with major decision vetoes (debt, new members, PTET funding).
Economics	Equal sharing absent agreement.	Capital accounts, waterfall mechanics, targeted allocations, catch-up preferences.
Transfers	Assignment allowed, admission needs unanimous consent.	Buy-sell triggers for death, disability, divorce, regulatory loss, or majority drag/tag.
Duties	Statutory duties can be limited but not eliminated.	Define conflict approval processes, non-compete carveouts, indemnities, and removal standards.
Tax elections	Silent on PTET/S-election logistics.	Embed PTET contribution rules, withholding obligations, and decision thresholds for elections.

Professional practices & regulated work

Maryland permits PLLCs, but each licensing board overlays ownership tests (e.g., 100% licensed members for law and medicine, 2/3 licensed for architecture/engineering). Professional malpractice remains personal; the LLC shields contract debts and leases. Many practices compare PLLC vs PC vs partnership for benefit plans—coordinate form with your licensing counsel.

Foreign owners & financing

Non-U.S. members typically need ITINs and may face FIRPTA withholding on real estate sales. Banks frequently demand personal guarantees plus membership interest pledges; draft OA language covering notice, cure rights, and collateral assignments before lenders ask.

Need series-style segregation?

Maryland lacks a series LLC statute. Common alternatives include statutory trusts with separate beneficial interest registers or multiple LLCs stacked under a holding company. I routinely structure “mini cell” portfolios with centralized accounting and intercompany services agreements to keep costs predictable while preserving liability separation.

Taxes, filings & ongoing compliance

Plan for the $300 SDAT annual report/personal property return every April, PTET/nonresident withholding choices, and the possibility of corporate election when reinvesting profits. Missing a deadline quickly leads to forfeiture.

Pass-through taxation

Most LLCs stay pass-through. Members owe 2%–5.75% state income tax plus local piggyback (up to 3.2%). Nonresidents require 8% (individual) or 8.25% (entity) withholding unless PTET is elected and funded.

PTET election

Partnerships and S-corps make the election with Form 511/510D and pay tax at the member-specific rate. For tax years after 12/31/2025, Maryland-based owners must include all income, not merely Maryland-source. Coordinate with your CPA on estimated payments and owner credits.

C-corp election

LLCs can elect corporate status and pay the 8.25% Maryland corporate income tax (Form 500). Consider it for reinvestment-heavy ventures or QSBS planning, but budget for franchise tax equivalents in other jurisdictions if you foreign qualify.

Personal property reporting

Even property-light LLCs must file the annual report cover page + $300 fee. Owning equipment, furniture, or inventory requires full schedules and results in county personal property tax bills. Keep fixed-asset ledgers updated to match depreciation schedules.

Law-office reminder: SDAT combines the annual report, personal property return, and franchise-type fee into one filing. Missing it triggers forfeiture, blocks financing, and stops registered agent changes. File early if you expect to change RAs or merge entities—SDAT will not process other filings when you are forfeited.

Filing / Task	Deadline	Notes
Articles of Organization	Day 0	$100 filing fee; optional $50 online expedite or $425 same-day counter.
Operating Agreement execution	Immediately after formation	Keep signed copy with bank and investor records; reference PTET and buy-sell terms.
Annual report & personal property return	April 15 (or fiscal year equivalent)	$300 base fee + any county taxes. Use Form 1 schedules when property exists.
PTET election & payments	By original due date of return	Submit Form 511 and make quarterly estimated payments once elected.
Nonresident withholding	Quarterly estimates + annual return	Form 510/510C for pass-throughs without PTET election.
Licenses & trader’s taxes	County-specific (often July 1)	Renewal proof may be requested during annual report review.

Cost snapshot

Use the mini calculator to plan for formation and annual cash needs. Add local personal property taxes or CPA fees as needed.

Expedited service?

Formation estimate: $100

Estimated MD personal property tax

Annual estimate: $300

Calculator excludes legal, CPA, or licensing fees. Adjust for multiple entities or local surcharges.

CTA, foreign registration & pitfalls

Domestic Maryland LLCs are currently exempt from FinCEN’s BOI filings under the interim rule, but foreign-formed entities registering with SDAT remain reporting companies. Pair that with common practical mistakes, and you see why I keep this section in every engagement memo.

CTA / BOI status

Maryland-formed LLCs: no BOI report due unless FinCEN reverses course. Foreign entities (e.g., Canadian ULC registering with SDAT) are still “foreign reporting companies” and must file within 30 days of registration unless exempt. Keep ownership lists current so you can file quickly if the rule changes again.

Foreign qualification triggers

Owning a Maryland storefront, employees, or inventory is “doing business.” File the Registration Statement for Foreign LLC, attach a recent certificate of existence, and pay $100. Foreign LLCs owe the same $300 annual report and are subject to forfeiture if they miss it.

Checklist I use

Certificate of existence < 30 days old.
Maryland resident agent appointment and consent.
Foreign entity operating agreement ready for banks.
Personal property account numbers for each county location.

Common pitfalls from my desk: (1) Letting the resident agent resign without appointing a new one—SDAT will forfeit you within weeks. (2) Treating the personal property return as optional, then learning you cannot record deeds or get financing. (3) Using out-of-state holding companies without foreign qualification; contracts become unenforceable until you cure. (4) Mixing personal and business funds—Maryland judges pierce LLCs quickly when members commingle.

My services for Maryland LLC owners

I personally handle every Maryland engagement—no anonymous filing services. Expect direct access, tailored drafting, and coordination with your CPA, lender, and licensing boards.

Formation & OA package

$1,150 flat

Articles of Organization + resident agent consent filing (rush available).
Custom operating agreement with PTET and nonresident provisions.
Organizational resolutions, ownership ledger, EIN & MD-REG roadmap.

Compliance & PTET planning

$1,750+

PTET modeling with CPA, estimated payment schedule, member credit letters.
Personal property return prep review and filing support.
Nonresident withholding procedures + quarterly reminders.

Forfeiture revival

$1,600+

Catch-up reports, personal property schedules, and fee negotiation.
Articles of reinstatement and resident agent updates.
Compliance calendar rebuild + lender readiness packet.

Review-only engagement

$620 flat

Redline of client-prepared documents with Title 4A memo.
30-minute Zoom consult plus one follow-up review.
Action list covering PTET, withholding, and licensing gaps.

Talk through your Maryland plan

Use Calendly for a 30-minute Zoom or email me directly. I take on a limited number of new LLC matters each month so I can stay hands-on.

Schedule via Calendly Email owner@terms.law