August 29, 2024

How Much Does an LLC Cost in Maryland

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It costs at least $100 to form an LLC in Maryland. But these additional expenses could increase the total to over $3,000.

How much does it cost to start an LLC in Maryland?
Here are the following fees to consider:

Maryland's diverse business scene in healthcare and tech makes it an attractive location to form an LLC.

The question is, how much for an LLC in Maryland? Read on to see how much it will cost you.

How much do you expect to spend in total to form and maintain an LLC in Maryland for the first year?

Maryland Domestic LLC Formation Fee

Cost: $100[1]

To form an LLC in Maryland, you must submit the Articles of Organization to the Department of Assessments and Taxation. Once the documents are approved, your LLC will be recognized as legally separate from you.

A Maryland LLC's Articles of Organization contain the following information:[2]

You can submit the Articles of Organization online, by mail, or in person. Non-expedited filings typically take at least 4 weeks to be processed. You can get expedited services to form an LLC faster.

Convenience Fee
Maryland LLC forms filed online, including the Articles of Organization, incur a $3 eCheck fee or a 3% service/convenience fee for credit card and PayPal payments.[1]

Maryland Foreign LLC Formation Fee

Cost: $100[1]

If your LLC is already established in a different state and you want to expand your business to Maryland, you need to register it as a foreign LLC.

Foreign LLCs in Maryland must submit an LLC Registration Form to the Department of Assessments and Taxation and the filing fee.

If your foreign LLC's original name is unavailable in Maryland, you must register a trade name. This assumed name becomes your LLC's official business name only in Maryland.

Don't do business in Maryland without proper registration. Otherwise, you'll have to pay a $200 penalty.[3]

Maryland LLC Annual Report Fee

Cost: $300[1]

Annual reports are filed with the Department of Assessments and Taxation. It shows any changes to the LLC's business name, mailing address, and other details. Once submitted, your LLC is considered in good standing, allowing you to continue operating.

Annual reports in Maryland are due April 15th each year. You may request a 60-day deadline extension on or before April 15th. Any later, you will accrue a late filing penalty fee of up to $500.[4]You can file online, by mail, or in person.

Personal Property Tax Return
Businesses owning, leasing, or using personal property worth $20,000 or more in Maryland must file a Personal Property Tax Return.[5] This must be attached to the Annual Report each year. There is no additional cost.

Maryland LLC Permits and License Fees

Cost: At least $15[6]

Most businesses in Maryland need to have a trader's license. The fee is based on the wholesale value of your retail inventory:[6]

Inventory AmountFee
0 - 1,000$15
1,001 - 1,500$18
1,501 - 2,500$20
2,501 - 4,000$25
4,001 - 6,000$30
6,001 - 8,000$40
8,001 - 10,000$50
10,001 - 15,000$65
15,001 - 20,000$80
20,001 - 30,000$100
30,001 - 40,000$125
40,001 - 50,000$150
50,001 - 75,000$200
75,001 - 100,000$250
100,001 - 150,000$300
150,001 - 200,000$350
200,001 - 300,000$400
300,001 - 400,000$500
400,001 - 500,000$600
500,001 - 750,000$750
750,001 and Over$800

All counties except Baltimore City follow the schedule of fees shown in the table above. Traders' licenses must be renewed each year by April 30th.[6]

Additionally, your LLC may need to get local business permits. If your LLC does business in two cities, you may need to get a separate license for each city. The local business permit fees vary per city and could be renewable yearly.

Business License Requirements
Applications for a trader's license and other Maryland business licenses must provide the following information:[6]

Maryland Business Taxes

Cost: 2% to 5.75% of taxable income

Maryland imposes state and local income taxes. Self-employed LLC members must pay state taxes based on taxable income:[7]

Taxable Net IncomeMaryland Tax
$0 - $1,0002%
$1,000 - $2,000$20 plus 3% of the excess over $1,000
$2,000 - $3,000$50 plus 4% of the excess over $2,000
$3,000 - $100,000$90 plus 4.75% of the excess over $3,000
$100,000 - $125,000$4,697.50 plus 5% of the excess over $100,000
$125,000 - $150,000$5,947.50 plus 5.25% of the excess over $125,000
$150,000 - $250,000$7,260.00 plus 5.5% of the excess over $150,000
Over $250,000$12,760.00 plus 5.75% of the excess of $250,000

Then, self-employed LLC members must pay federal income taxes:[8]

Tax RateTaxable Income
10%$0 to $11,000
12%$11,001 to $44,725
22%$44,726 to $95,375
24%$95,376 to $182,100
32%$182,101 to $231,250
35%$231,251 to $578,125
37%$578,126 and up

Self-employed LLC members must also pay the 15.3% federal self-employment tax.[9] This tax covers Social Security and Medicare contributions.

Lastly, don't forget your Business Personal Property Tax Return. If your business has $100,000 of assessed personal property and the local tax in your city is 2%, your tax would be $2,000.

Write off expenses.
The fees that you'll incur when forming an LLC can be claimed as tax deductions. You can write off the following expenses:

Maryland LLC Optional Fees

While the Maryland LLC fees below are optional, some are unavoidable depending on your business needs. For example, obtaining a Certificate of Good Standing is often necessary when opening a business bank account.

Maryland LLC Optional FeesCost
Expedited/Rush Processing Services$20 to $325
Resident Agent ServicesUp to $400+
Statement of Change$25
Operating AgreementUp to $500+
Employer Identification NumberFree
LLC Name Reservation$25
LLC Trade Name$25
Certificate of Correction$25
Articles of Amendment$100
Certified Copy of Documents$20
Certificate of Status$20
Website Domain$20 to $30
Business Insurance PremiumsVaries

Maryland LLC Expedited Service Fees

Cost: $20 to $325[1]

Maryland offers expedited services to process your LLC application faster:[1]

Service TypeDurationCost
Expedited7 to 10 business days$20 to $50
RushWithin 3 hours (file by 2:30 PM)$325

How long does it take to get an LLC in Maryland?
It takes at least 4 weeks to get an LLC in Maryland. Non-expedited filings are typically processed during the second month after the month you file documents.[10]

Maryland LLC Resident Agent Fees

Cost: $0 to $400

A resident agent is responsible for receiving business and legal documents on behalf of your LLC. This includes government notices, tax forms, and annual reporting forms.

You can be the LLC's resident agent if you're at least 18 and have a physical street address in Maryland. You must be available to receive documents during regular business hours.

Alternatively, you could hire a registered agent service to avoid putting personal details on the public record.

Get your resident agent's consent.
You'll need to get a person's consent before appointing them as a resident agent. Their signature is required for the Articles of Organization form.

Have you ever consulted a lawyer or accountant for LLC formation?

Maryland LLC Statement of Change Fee

Cost: $25[1]

An LLC can change its resident agent's details anytime. If this happens, you must submit a statement of change to the Department of Assessments and Taxation as soon as possible. Changes include the resident agent's name and address.

What is your top priority when choosing a registered agent service?

Statement of Change vs. Articles of Amendment
In Maryland, the Articles of Amendment are used to change the business name, address, and other details. The statement of change is focused solely on changes regarding the registered agent.

Maryland LLC Operating Agreement Fee

Cost: Up to $500+

LLCs in Maryland are not required to have an operating agreement. However, it's recommended because it defines important rules and regulations that all members and managers must follow.

An LLC operating agreement contains the following:

  • The roles and responsibilities of each member
  • How new or departing members will be treated
  • How business profits and losses will be divided

Ideally, you must already have a signed Operating Agreement before forming an LLC in Maryland. But if your LLC is already formed, you can always make one.

An LLC attorney might charge you a $500 flat fee for a standard operating agreement, or higher for more complex details.

Save money with a free operating agreement template.
Startup businesses can use free operating agreement templates online. Some registered agent services offer this as a part of their annual packages.

Employer Identification Number

Cost: Free

An Employer Identification Number (EIN) is a unique nine-digit number assigned by the Internal Revenue Service. This number is used to identify a business entity for tax-related purposes.

You're not required to get an EIN if you're operating a single-member LLC in Maryland. However, you might still need it down the line if you want to hire employees or open a business bank account.

Does my LLC need a bank account?
Yes. Separating your LLC's finances from personal assets is a requirement of liability shielding. Use a separate bank account to accept payments and pay business expenses to prevent corporate veil piercing.

Maryland LLC Name Reservation Fee

Cost: $25[11]

If you've already got a business name but are not yet ready to form an LLC, you can reserve your desired name first. Paying the name reservation fee will prevent others from using that name for 30 days.[11]

You can renew the name reservation for another 30 days for the same price. Just with a different form.[12]

Remember to review Maryland's detailed list of naming regulations to prevent your reservation from being rejected. An LLC name must include LLC, Ltd., or a similar abbreviation.

Websites for growing businesses.
Check online to see if your business name is available as a web domain. Even if you don't plan to make a business website today, you may want to buy the URL to prevent others from acquiring it.

Maryland LLC Trade Name Fee

Cost: $25[1]

A trade name (also known as "Doing Business As" or DBA) allows your LLC to operate under a name different from its legal name registered with the state.

Some LLCs use a DBA for branding purposes. It's also ideal if you want to use a name that doesn't have an "LLC" at the end. Regardless, trade names must be renewed every five years for the same price.

An Assumed Name Registration is not the same as a Trademark Registration.
An assumed name registration allows a business to operate under a name different from its legal name. Meanwhile, a trademark is an intellectual property protection that legally protects your brand name, logo, or slogan at the national level.

Maryland LLC Certificate of Correction Fee

Cost: $25[1]

After your Maryland LLC application is approved, review all the details of the Articles of Organization carefully.

If there are errors, like a misspelled business name or incorrect address, correct them as soon as possible by filing a Certificate of Correction.

Maryland LLC Articles of Amendment Fee

Cost: $100[1]

Your Maryland LLC's Articles of Organization contains specific details about your business. Should these details change, you must submit the Articles of Amendment to the Department of Assessments and Taxation.

File the Articles of Amendment if you:

  • Change the LLC name
  • Update the business purpose
  • Move to a new address

Certificate of Correction vs. Articles of Amendment
A Certificate of Correction is for fixing mistakes in initial filings. Meanwhile, the Articles of Amendment update key details as the LLC evolves.

Maryland LLC Certified Copy Fee

Cost: $20[1]

Certified copies of documents verify that your LLC is legitimate and that its details are accurate.

You might need these for circumstances like opening a business bank account or expanding your LLC in another state.

Additionally, some LLCs keep certified copies of their initial Articles of Organization and Articles of Amendment (if any) for recordkeeping purposes.

If you only want copies of your business documents, you don't have to pay the $20 certification fee.

Maryland LLC Certificate of Status Fee

Cost: $20[1]

A Certificate of Status, also known as a Certificate of Good Standing, is an official document by the Department of Assessments and Taxation. It verifies that your LLC is updated with all state filings and has paid all its state fees and taxes.

You might need a Certificate of Status to:

What to do if your LLC is in bad standing
Contact the Department of Assessments and Taxation to ask why your LLC is in bad standing. The most common reasons include:

Pay any outstanding fees and penalties. Then, file a Certificate of Reinstatement with the $100 filing fee.[1]

Business Website Domain Fee

Cost: $20 to $30

A website domain and social media presence provide dedicated online spaces for your business. It's essential for marketing, customer engagement, and brand visibility in today's digital world.

Even if you're not planning to build a business website now, it's a good idea to at least buy the domain name. This prevents others from using your LLC's name as a web address.

Beware of website domain squatters.
Domain squatters often monitor newly registered LLC names. They purchase corresponding website domains and then resell them at significantly higher prices.

Business Insurance Premiums

Cost: Varies

Most businesses with one or more employees in Maryland must have workers' compensation insurance.[13]

Maryland does not have a state-funded workers' compensation, but you can purchase through Chesapeake Employers' Insurance Company, Maryland's guaranteed insurer.[13]

Alternatively, you can self-insure or get it from a private company. The cost depends on factors like the number of employees, the risk level of your industry, and your past insurance claims.

You might also be required to get other types of insurance:

Bottom Line

In summary, the Articles of Organization fee costs $100 in Maryland. Annual reports are filed yearly, with a $300 filing fee.

The total cost will increase depending on the additional services, documents, and licenses your LLC needs. Ultimately, it's never a bad idea to set aside an extra budget for unexpected fees.

What concerns you most about forming an LLC in Maryland?

References

  1. ^ Maryland.gov. Fee Schedule, Retrieved 06/26/2024
  2. ^ Maryland Department of Assessments & Taxation. Articles of Organization, Retrieved 06/26/2024
  3. ^ Maryland Department of Assessments & Taxation. Limited Liability Company Registration (For non-Maryland Limited Liability Company), Retrieved 06/26/2024
  4. ^ Maryland Department of Assessments and Taxation. Instructions for Form 1 The Annual Report & Business Personal Property Return, Retrieved 07/30/2024
  5. ^ Maryland.gov. Registrations & Filings, Retrieved 06/26/2024
  6. ^ Maryland Courts. Business Licenses, Retrieved 06/26/2024
  7. ^ Comptroller of Maryland. Tax Information for Individual Income Tax, Retrieved 06/26/2024
  8. ^ IRS. Federal Income Tax Rates and Brackets, Retrieved 06/26/2024
  9. ^ IRS. Self-Employment Tax (Social Security and Medicare Taxes), Retrieved 06/26/2024
  10. ^ Maryland.gov. Registrations & Filings, Retrieved 06/26/2024
  11. ^ Maryland Department of Assessments & Taxation. Corporate Name Reservation Application, Retrieved 06/26/2024
  12. ^ Maryland Department of Assessments & Taxation. Corporate Name Reservation Application for Re-Reservation, Retrieved 06/26/2024
  13. ^ Maryland Workers' Compensation Commission. Questions & Answers for Employers, Retrieved 06/26/2024

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How Much Does It Cost to Form an LLC?

Forming an LLC can be the next step for your business. But how much will it cost? Read on to learn about the different LLC formation fees.
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