Start Your LLC in Maryland with Inc Authority for Free
With 30+ years of experience and 250K successful business formations under its belt, Inc Authority stands out with its LLC formation services. Utilize its free services and kick off your new business quickly and successfully.
1 Year Registered Agent Service Free
Free LLC formation service, including documentation, review, and application filing.
Complimentary registered agent services for the first year, no matter which plan you choose.
Assistance with changing your LLC’s tax status to the special federal tax status of an S-Corp.
Costs to Consider Before Forming an LLC in Maryland
Starting a new business involves various costs. There are many government filings that need to be done and each requires a filing fee.
Here, we’ll list some of the common costs involved in forming a Maryland LLC.
- The state of Maryland charges a $100 filing fee for processing the Articles of Organization for an LLC.
- The rush filing option (3-hour processing) costs $325 for online filing and $425 if documents are submitted in person
- The expedited processing costs an extra $50, which will get your application reviewed within 7-10 business days.
- Filing an annual report costs $300 for both domestic and foreign LLCs in the state of Maryland.
The costs of running an LLC in Maryland are higher than those in most states, primarily due to the high cost of filing annual reports. However, you can save time and money during registration by hiring Inc Authority to take care of the process.
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A Step-by-Step Guide to Forming an LLC in Maryland
To form an LLC in Maryland, you need to register your Articles of Organization with the Secretary of State. However, there are many steps involved before and after that to ensure you hit the ground running and start an LLC successfully.
Let’s discuss the step-by-step process of launching an LLC in Maryland.
Create a Solid Business Plan
Come up with a business idea and conduct sufficient market research to ensure that it’s a feasible and profitable idea. Use that research to create a solid business plan for how you will launch your business and win your first few clients.
Your business plan should have all the essential information about your business, such as its purpose, goal, target customers, and value proposition. You should also include your financial projections and marketing strategy in your plan.
Pick a Unique Name for Your Maryland LLC
To register your LLC in Maryland, you’ll need an official business name. This name should adequately represent your business and must be unique. This means that no existing business should be using your chosen name.
You must also follow Maryland’s LLC naming requirements, which require you to add “limited liability company” to your business name. Alternatively, you may also use one of its abbreviations, such as LLC or L.L.C.
Reserve Your LLC Name and Buy a Domain
If there’s a delay in registering your new LLC in Maryland, you should consider reserving your business name, so that no other business may use it. This requires filing an application to reserve it for 30 days for $25.
It’s important to have a website domain name that matches your LLC name or assumed business name. That’s why, you should not wait till LLC registration to get one, but should buy a matching domain name as early as possible.
Hire a Maryland Registered Agent
A resident agent or registered agent is an individual or organization responsible for receiving legal correspondence on behalf of a business. They receive legal documents and notify the business of any requirements or deadlines.
If you’re thinking of being your company’s registered agent, remember that you’ll need to be present at the registered address on all business days, during business hours. If you’re not up for it, hire a professional to do it for you.
Choose the Type of LLC You Want to Start
There are two common types of LLCs you can register—a foreign LLC and a domestic LLC. The former is applicable if you’re expanding an existing business to Maryland, while the latter is applicable if you’re starting a new LLC.
Another choice you need to make is to decide if you want a single-member LLC or a multi-member LLC. This will be determined by the number of owners. If you share the ownership with others, you’ll need a multi-member LLC.
Create an LLC Operating Agreement
Unlike corporations, which have strict rules they must follow, LLCs follow their own guidelines. LLC members brainstorm and create an LLC operating agreement that contains all information on how the LLC will be managed.
Though it’s not state-mandated, it’s always a great idea to have a well-defined operating agreement. This will streamline the company’s operations and decision-making process and will help you easily resolve conflicts among members.
File Your Articles of Organization
The most important step in the process is to register your business officially by filing an application and submitting your Articles of Organization with the Maryland Secretary of State. You may do so online, via mail, or in person.
You will need to provide essential information about your company, as required by the state, including registered agent information. You may opt for expedited review (7-8 business days) or rush filing (3-4 hours) by paying extra.
Obtain a Certificate of Organization
After you’ve filed your Articles of Organization, you need to wait. It takes 6-8 weeks for an application to get reviewed and processed. Expedited filing will reduce the time to 7-8 business days while rush filing will get it done in 3-4 hours.
Once your LLC application is approved by the state, you may request a Certificate of Organization. This will cost you $100 and if you want a certified copy of the document, you will need to pay an additional fee of $20 for the same.
Acquire an Employer Identification Number
An EIN, also known as a Tax ID, is like a social security number for your company. It helps the Internal Revenue Service identify your company and track its tax filings from year to year. This is a necessary ID that you must acquire.
Though it’s mainly required for tax reasons, an EIn has other benefits as well. When you go to open a bank account for your business, the bank may ask for an EIN. Having an EIN also makes it easier for you to secure loans and funding.
Open a Business Bank Account
Every business must have a bank account in its name, separate from the owners’ bank accounts. This helps keep a clear demarcation between the owner’s finances and business finances, thus reinforming the liability protection for LLC members.
You will find a plethora of options to choose from. We recommend going for a hybrid banking solution that allows you to conduct transactions on-the-go, without needing to visit the physical branch for every small banking need.
Get the Required Licenses and Permits
Your work is not done once you get a Certificate of Organization, you also need to ensure you have all the necessary permits to start business operations. These could be general business licenses or occupational licenses and permits.
The requirements differ from state to state and by the type of business you operate. As such, you should find out the specific requirements for your county, state, and business and then get all the permits you need to legally run your business.
Get Insurance
When starting a new business, you must always plan for contingencies. Getting your business insured helps you with that. Get started with general liability insurance that protects your company from various types of common liabilities.
You should also consider getting workers’ compensation insurance to pay employees if they incur any bodily harm while working for your company. Depending on the type of business, you may want to get a few other types of insurance as well.
Get a Website (Optional)
To stay relevant in today’s business world, you need an online presence for your business and a website is the first step toward that. Your website is the primary source of information for your business for prospective customers.
As such, you should invest in good website design and marketing services to create a site that organically drives traffic. It should also deliver a great user experience and keep prospects engaged enough to, eventually, drive conversions.
Stay Compliant
Running a business is no easy task and requires you to continually stay in compliance with various state and federal laws and regulations. That’s why you should be aware of all compliance requirements and ensure you meet all deadlines.
The two most important requirements are paying taxes and filing annual reports on time. Find out about all other ongoing requirements and keep up with the deadlines or hire someone who can alert you of all requirements ahead of time.
Why Should You Outsource LLC Formation Services?
LLC formation is a simple-enough process, but one that involves numerous forms and document filing requirements. If you’re doing it for the first time, seeking outside help is recommended. Here’s why.
It’s Convenient
Outsourcing the tedious process frees your time for more important work while experts take care of filing documents and getting your application approved. It makes things simple and convenient for you.
It’s Error-Free
Mistakes in your LLC filing can cost heavily as they may get your application rejected. That’s why it’s prudent to hire someone who knows what they’re doing and will ensure there are no mistakes.
It’s Quicker
If you do it yourself, as a first-time entrepreneur, you will need more time to prepare everything and file the documents confidently. Hiring experts to do this makes the process much quicker.
Benefits of Starting an LLC in Maryland
There’s a reason why LLCs are one of the most preferred business entities—they offer numerous benefits and few disadvantages. An LLC combines some of the best features of other entities like Sole Proprietorships and Corporations.
Let’s check out some of the main advantages of starting an LLC in Maryland.
Liability Protection
If you start a Sole Proprietorship or a Partnership, you and your company are inextricably related. As such, if the company is sued, you’re indirectly sued. If the company incurs debts, you’re personally liable to pay it off.
Limited liability companies overcome this challenge by protecting LLC members from being held liable for the company’s debts and lawsuits. The company needs to pay off its debts and its assets can be liquidated to achieve that.
Flexibility in Taxation
Limited liability companies follow pass-through taxation in general. A single-member LLC in Maryland is treated as a Sole Proprietorship for tax purposes. A multi-member LLC, on the other hand, is treated as a Partnership for tax purposes.
However, a Limited Liability Company has the option to be taxed as a Corporation, if it so wishes. In fact, it can also file Form 2553 of the Internal Revenue Service to get the special tax status of an S-Corp and maximize its tax advantages.
Cheaper to Form and Run
A Limited Liability Company is typically cheaper to run than a Corporation because of fewer regulations and management guidelines. They don’t need to comply with strict guidelines or maintain detailed records of every meeting of members.
As mentioned earlier, LLCs have flexibility in tax treatment. This allows them to save money by paying less in taxes by choosing the best tax structure. Also, forming an LLC in Maryland costs $100 while forming a Maryland Corporation costs $120.
LLCs Require Minimal Paperwork
Corporations are required by law to maintain minutes of meetings for all board and shareholder meetings. Every decision is put to a vote and detailed records are kept of each round of voting and the decisions made during the meetings.
LLCs have no such requirements and very few paperwork and record-keeping requirements. This saves considerable time and makes managing LLCs easier. The only legal requirement is to file an annual report, which is doable.
Ease of Management
Unlike a Corporation, LLCs don’t need to hold regular board meetings, conduct a formal voting process to make decisions, and maintain records. This makes managing limited liability companies a lot easier than it is to manage a Corporation.
What’s more, the members of an LLC in Maryland can decide how it will be run. They typically hold an initial meeting where they discuss ideas and create standard operating procedures, which are documented in an LLC operating agreement.
Flexibility in Ownership
Many business entities, such as an S-Corporation, are subject to strict regulations on who can be an owner or shareholder in the company. S-corps, for example, can only have 100 shareholders and they must not be non-residents of the US.
As you probably know, LLCs don’t have such limitations. You can start a Maryland LLC with one member or as many members as you need. There are very few limitations on who these LLC members can be and even non-residents can be one.
The Right to Hold Assets
An LLC is considered a pass-through entity for taxation. However, it still is an entity separate from its owners, unlike a Sole Proprietorship. This separate entity status gives LLCs in Maryland or any other state, certain rights and privileges.
This gives an LLC in Maryland the right to buy property, equipment, and other assets in its name, instead of having the owners buy these in their names. This has the added benefit of keeping your personal assets separate from business assets.
The Right to Enter into Contracts
Adding to the previous point, LLCs in Maryland also have the privilege of signing business contracts in the company’s name. As such, LLC members do not necessarily need to sign business contracts in their own names.
This allows LLCs to take business loans, enter into vendor contracts, and seek investments in their names. This, again, separates the members from the company and protects them in case the business fails to meet its obligations.
Inc Authority LLC Formation Services in Maryland: Pricing
With over three decades of experience, Inc Authority has established itself as a trusted LLC formation service provider in the US. Though known mostly for its free LLC plan, it offers paid services as well.
Let’s check out the various pricing bundles and plans you can choose from.
Free
Here’s what you can expect, over and above what you get with the Starter plan:
- Customer success advisor: If you choose the top-tier plan, Inc Authority will assign a designated business success specialist to oversee your account. They will act as your main point of contact for all your business requirements, ensuring operations run smoothly. Any questions you have will be answered promptly.
- Private banking expert: Managing your business finances successfully requires a business bank account. Inc Authority will connect you with a private banking expert, who will guide you in identifying top-tier business banking alternatives and selecting one that complements your business needs.
- Personalized business advice: Inc Authority is not just a provider of business formation services, despite what many may think. It not only assists in starting a business but also teams up with you to aid in its expansion. Its business advisory services guarantee that you kick off your business successfully.
- Expedited application filing: This plan offers expedited preparation and filing services, with applications submitted on the same day. Unlike clients on the free plan, who may experience delays, clients on the Fasttrack plan receive priority treatment and have their applications processed within 24 hours.
This plan is best suited for clients who prefer personalized services and priority treatment. If you don’t mind paying a little extra to get quicker and better services, then go for this plan.
Price: Custom
Starter
Here are the extra services you’ll get with the Starter plan:
- LLC operating agreement: Every LLC should have an operating agreement that outlines the guidelines for how it will be run. Inc Authority will help you create a comprehensive agreement by providing a template that you can use to create one and offering expert assistance to make it as detailed as possible.
- Employer Identification Number: If your LLC employs any staff, an EIN is required to identify your company and deduct taxes from their salaries. Inc Authority provides help with the application process via the Starter plan and can aid you in securing your federal Employer Identification Number easily.
- Corporate forms and documents package: Inc Authority offers multiple expert-designed templates for crucial legal and business documents, allowing you to save time and energy. Additionally, it assists in drafting these business documents, ensuring they are accurate and detailed.
- Compliance notifications: You will be sent alerts and notifications of impending deadlines to help you keep on top of key business filings and other obligations vital for upholding your business’s legal status. This will help you adhere to state and federal regulations and stay in good standing with them.
- Detailed tax consultation: Inc Authority, with its premium plans, provides access to a comprehensive tax planning consultation with a specialist. The tax expert will offer you thorough guidance on tax due dates, tax write-offs associated with typical business costs, and other tax concerns.
- Web domain + 5 business email addresses: Inc Authority offers a bundled deal to jumpstart your online presence and establish an engaging and optimized website for your new business. This comprises a website domain for your LLC and 5 corporate email addresses using your domain name.
This plan is perfect for people who want multiple services, not just business formation. You get a bundled package with crucial services you’ll need for successfully starting a new business.
Price: Custom
Fasttrack
Here’s what you can expect, over and above what you get with the Starter plan:
- Customer success advisor: If you choose the top-tier plan, Inc Authority will assign a designated business success specialist to oversee your account. They will act as your main point of contact for all your business requirements, ensuring operations run smoothly. Any questions you have will be answered promptly.
- Private banking expert: Managing your business finances successfully requires a business bank account. Inc Authority will connect you with a private banking expert, who will guide you in identifying top-tier business banking alternatives and selecting one that complements your business needs.
- Personalized business advice: Inc Authority is not just a provider of business formation services, despite what many may think. It not only assists in starting a business but also teams up with you to aid in its expansion. Its business advisory services guarantee that you kick off your business successfully.
- Expedited application filing: This plan offers expedited preparation and filing services, with applications submitted on the same day. Unlike clients on the free plan, who may experience delays, clients on the Fasttrack plan receive priority treatment and have their applications processed within 24 hours.
This plan is best suited for clients who prefer personalized services and priority treatment. If you don’t mind paying a little extra to get quicker and better services, then go for this plan.
Price: Custom
Why Should You Hire Inc Authority to Form an LLC in Maryland?
Inc Authority is a loved and trusted company that has helped launch hundreds of thousands of businesses. If that’s not enough to convince you, here are some more reasons why you should choose it.
Free
While many business formation services cost hundreds of dollars, Inc Authority offers completely free services. There are no hidden costs or service charges. You only need to pay the state’s filing fees.
Trustworthy
Inc Authority has a team of experienced professionals who do this day in and day out. They specialize in these services, so you can rest assured that the process will go perfectly, without any mistakes.
Convenient
Preparing and filing government documents and forms is not a pleasant experience. You can avoid the tedious and, possibly overwhelming, process by outsourcing it to Inc Authority.
FAQ
The cost of filling the Articles of Organization for forming an LLC in Maryland is merely $100. However, there are other costs associated with starting a new business, which you should account for when making an estimate.
If you hire a third-party business formation service provider, for instance, you may need to pay their service charges. However, if you opt for Inc Authority, you can avoid this expense as it offers free Maryland LLC formation services.
Follow these steps to form an LLC in Maryland the right way.
- Create a Solid Business Plan: Make a business plan that details exactly how you intend to launch and grow your new business.
- Pick a Unique Name for Your Maryland LLC: Do some brainstorming to come up with a relevant name for your business and check whether it’s available for use within the state.
- Reserve Your LLC Name and Buy a Domain: Reserve your LLC’s name if there are any delays in the business registration process. Also, secure a matching domain name that you can use for your business website.
- Hire a Maryland Registered Agent: Appoint a local resident agent to act as the point of contact for receiving any legal notice for your business.
- Choose the Type of LLC You Want to Start: Choose between a multi-member and a single-member LLC and a domestic or foreign entity. Also, decide if you want your LLC to be member-managed or manager-managed.
- Create an LLC Operating Agreement: Define the rules for how your business will operate and how any potential conflict will be resolved. Document these rules in a formal document called an operating agreement.
- File Your Articles of Organization: Register your LLC officially by submitting the Articles of Organization to the concerned Maryland department.
- Obtain a Certificate of Organization: Wait for your application to get processed and get a Certificate of Organization from the state, which officially declares your LLC as an official business entity.
- Acquire an Employer Identification Number: Apply for and secure a federal EIN, which you’ll need for various business purposes, such as opening a business bank account and paying employee salaries.
- Open a Business Bank Account: Open a bank account in the company’s name to streamline business finances and keep them distinct from your personal finances.
- Get the Required Licenses and Permits: Secure all the licenses and permits you need at the state, federal, and county levels.
- Get Insurance: Insure your new business to protect it against unexpected threats and risks, both internal and external.
- Get a Website (Optional): Hire a professional to design a website for your small business and ensure that it follows all SEO best practices.
- Stay Compliant: Fulfill all state and federal requirements for running an LLC in Maryland and stay in good standing with the state.
Choosing an LLC over any other type of business entity will help you realize the following benefits.
- Liability Protection: LLC members are protected from being held responsible for business debts and liabilities. If the company is sued, then the LLC members are protected in that case as well.
- Flexibility in Taxation: LLCs can choose to go with the default pass-through taxation structure or be taxed as a C-Corporation or an S-Corporation. This gives them the flexibility to choose a structure that maximizes tax benefits.
- Cheaper to Form and Run: Forming and operating an LLC is typically more affordable than running a Corporation. The ongoing operational costs are higher in corporations due to the strict operating procedures and guidelines.
- LLCs Require Minimal Paperwork: Unlike corporations, LLCs don’t need to maintain detailed records of meetings and require less paperwork.
- Ease of Management: LLC members can decide how they want to run their company and are not obliged to follow any standard operating procedures. These rules of governance are documents in an LLC operating agreement.
- Flexibility in Ownership: LLCs can be owned by individuals or organizations, with very few restrictions on the type and number of members they can have.
- The Right to Hold Assets: LLCs are allowed to buy assets in the company’s name and can own property, equipment, or any other type of physical or intellectual asset.
- The Right to Enter into Contracts: An LLC in Maryland is legally allowed to enter into business contracts with various stakeholders, without needing the members to co-sign agreements.
While LLCs offer many benefits, they do have some drawbacks as well. Also, in specific cases, other business entities may be a better choice, so do your research and then pick the right business structure.
Unlike corporations, Maryland LLCs do not pay corporate taxes at the state level. The business income passes to the LLC members, who pay personal income taxes on their incomes. However, LLC owners do need to pay an extra self-employment tax, which can be a financial burden for small businesses.
Maryland is among the states that are neither too lucrative nor too bad for forming an LLC. The Maryland LLC formation costs are in line with what most other states charge and there are no additional requirements. However, the filing fee of $300 for annual reports is higher than what most states charge.
Overall, though, LLCs make up for this by offering tons of other business benefits and tax advantages. So, yes, it is a good idea to form an LLC in Maryland, if you reside within the state and want to start a business.
Form an LLC in Maryland Quickly and Conveniently
Benefit from Inc Authority’s free LLC formation services to start your new business. You focus on business growth and let experts take care of the legalities and paperwork.
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