A Maryland limited liability company (LLC) has characteristics of a partnership as well as a corporation. Owners of a Maryland LLC are referred to as members. Members of a Maryland LLC have the ability to pass their share of profits and losses to their individual or joint tax returns. Furthermore, members of a Maryland LLC enjoy limited liability protection from business debts, and other obligations incurred during the course of business.
Choose a name for the LLC. According to the Legalzoom website, Maryland law requires an LLC to contain the words "limited liability company," or an appropriate abbreviation in the business name. A Maryland LLC must select a business name that isn't on reserve, or currently registered with the Maryland Department of Assessments and Taxation. Call the Maryland Department of Assessments and Taxation at 410-767-1340 to check business name availability.
File articles of organization with the Maryland Department of Assessments and Taxation. Articles of organization in Maryland must contain the name and address of the business, and indicate the purpose for forming the LLC. Maryland articles of organization must indicate the name and address of a person (18 or older), LLC or corporation that will act as a resident agent for the LLC. A Maryland resident agent has the responsibility of receiving legal documents on behalf of the LLC. The Maryland Department of Assessments and Taxation website indicates, as of 2010, it costs $100 to file articles of organization.
Create an operating agreement. Maryland law doesn't require LLCs to file an operating agreement, but its creation should be strongly considered. A written operating agreement outlines the rules and regulations that will govern the Maryland LLC. Furthermore, the operating agreement can address issues such as dispute resolution, voting rights of members, distribution of profits and ownership interests.
Obtain an employer identification number (EIN) from the IRS. The IRS allows businesses to obtain an EIN via fax, phone, mail or online submission. Online and phone correspondence allows the IRS to issue an EIN for immediate use. Mail inquiries may take up to 4 weeks before the IRS issues an EIN, while fax inquiries may take up to 4 business days.
Apply for a Maryland state tax ID. This can be accomplished by contacting the Maryland Comptroller of the Treasury at 410-767-1313. A state tax ID registers the LLC for business tax purposes. Furthermore, some vendors and suppliers may elect not to do business with companies that don't have a tax ID number.
Obtain the proper permits and licenses necessary to operate the LLC. At the very least, a Maryland LLC must obtain a business license. A business license can be obtained at the Maryland city or county clerk's office. Inquiries regarding Maryland licensing and permit requirements are fielded on the Maryland Department of Business and Economic Development's Business Licensing and Information System website. Permit and license requirements for a Maryland LLC will depend upon the nature of the business. For example, a Maryland LLC that sells retail clothing will have to obtain a seller's permit and sales tax license. A home-based Maryland LLC engaged in tax preparation services won't have the same licensing requirements.