How to Start an LLC in Maryland in 2026: SDAT Filing, the $300 Annual Report and First-Year Cost

Maryland is cheap to enter and comparatively expensive to stay in. Filing articles of organization with the State Department of Assessments and Taxation (SDAT) costs $100, but from the following year every LLC pays a flat $300 annual report fee by April 15, even if it owns nothing and earned nothing. Miss that report for long enough and SDAT forfeits the company's right to do business. This guide walks a first-time founder through each step in order, explains how the annual report doubles as a property tax return, covers Maryland's 2025 income tax changes, and ends with a worked first-year budget. Every fee was checked against the Maryland Code and Comptroller guidance in October 2026.

Quick answer

To start an LLC in Maryland, file articles of organization with SDAT and pay $100 (plus $50 for expedited processing). List a principal office in Maryland and a resident agent. Then file the $300 annual report and personal property return by April 15 every year, starting the year after you form.

• The name must include "limited liability company", L.L.C., LLC, L.C. or LC

• The annual report is due even if the LLC owns no property and had no income

• Late reports cost $30–$500 plus 2% per 30 days; long-unfiled reports lead to forfeiture

• Retailers also need a trader's license from the circuit court clerk

• EIN and BOI: free EIN; no federal BOI report for US-formed LLCs

What a Maryland LLC is and who should form one

A Maryland limited liability company is formed under Title 4A of the Corporations and Associations Article of the Maryland Code. The LLC is a legal person separate from its owners, called members, so the company's debts, contracts and lawsuits stay with the company. A supplier with an unpaid invoice or a customer with an injury claim generally cannot reach your home or personal savings just because you own the business. That shield holds up best when the LLC behaves like a separate business, with its own bank account, contracts in its own name and proper records.

In Maryland, SDAT rather than the Secretary of State keeps the business register. That is not just a naming quirk: SDAT is also the agency that assesses business personal property for local tax, which is why the yearly filing is a combined annual report and personal property return. You file the articles, the annual report and later changes through Maryland Business Express, SDAT's online portal, or on paper.

For federal tax, a single-member LLC is a disregarded entity and a multi-member LLC is a partnership unless you elect corporate treatment, and Maryland follows the same classification. LLCs suit most small Maryland businesses: contractors, consultants, online sellers, restaurants, salons, landlords and government contractors. You do not need to live in Maryland or be a US citizen to own one, but the LLC needs a principal office and a resident agent in the state. Licensed professionals should check with their board, since some professions have their own entity rules.

If your business really runs in Virginia, Delaware or DC, a Maryland LLC does not avoid those rules; you would also register there as a foreign LLC. Our Virginia LLC guide covers the state next door.

Maryland LLC at a glance (2026)

$100

Articles of organization

Corps. & Assns. § 1-203

$50

Expedited processing

added to the filing fee

$300

Annual report

due April 15

$100

Reinstatement after forfeiture

plus missed reports and penalties

Step 1: Choose a name that meets the Maryland rules

Section 1-502 of the Corporations and Associations Article requires an LLC's name to include "limited liability company", "L.L.C.", "LLC", "L.C." or "LC". A benefit LLC, which commits to a public benefit alongside profit, uses "benefit limited liability company" or "Benefit LLC" instead. The name must also be distinguishable from names already on SDAT's records, so check SDAT's business entity search before committing to a logo, domain or sign.

You can reserve a name for $25 if you need time before filing. Most founders skip the reservation and file the articles directly, since an accepted filing secures the name. Use our LLC name checker to test variations quickly.

If you want to trade under a name that differs from the LLC's registered name, file a trade name application with SDAT. Banks often ask to see it before they accept payments in that name. Our DBA guide explains how trade names work across states.

Step 2: Set up the principal office and resident agent

Section 4A-210 requires every Maryland LLC to have a principal office in Maryland and a resident agent. The articles must give the principal office address and the resident agent's name and address. The resident agent receives lawsuits and official notices on the LLC's behalf, so the agent's address must be a real street address in Maryland where papers can be handed over.

The resident agent can be an individual Maryland resident, such as a member, or a Maryland corporation or other entity acting as agent. Many owners serve as their own agent at their shop or home address. Owners who live in Virginia, DC or further away, or who want to keep a home address off the public record, usually pay a commercial agent, typically somewhere around $50 to $300 a year (an estimate based on published prices of national agent services, not an official figure). The agent's address often doubles as the principal office for out-of-state owners.

You can change the resident agent or its address later by filing a statement with SDAT; the fee for a change of the agent's name or address is $25.

Step 3: File the articles of organization

The articles of organization bring the LLC into existence once SDAT accepts them for record. Under section 4A-204 they must state the LLC's name, the address of its principal office in Maryland, and the name and address of its resident agent. You can add other provisions, such as a statement limiting members' authority to act for the LLC just because they are members. The resident agent signs to consent, and an authorized person signs the articles.

File online through Maryland Business Express or on paper. The statutory filing fee is $100. Standard processing can be slow, so most founders add the $50 expedited fee. If you need a filing on a guaranteed same-day basis, section 1-203 sets a $425 fee for that faster service. SDAT's portal shows current processing times, and it is worth checking them before you sign a lease that depends on the LLC existing.

Filing Maryland articles of organization

1. 1

   Check the name

   Search SDAT's business entity records and confirm the name includes an LLC ending under § 1-502.

2. 2

   Confirm the principal office and resident agent

   Both need Maryland addresses. Get the agent's consent, since the agent signs the articles.

3. 3

   Decide what else goes in the articles

   Most small LLCs keep the articles short and put ownership and management rules in the operating agreement.

4. 4

   File on Maryland Business Express

   Pay $100, plus $50 for expedited processing if you need it soon.

   Tip: Save the acknowledgment and the SDAT department ID number; the Comptroller and the circuit court clerk ask for it.

5. 5

   Note your first annual report date

   The first $300 report is due by April 15 of the following year.

Why filings get rejected. The usual reasons are a name too close to an existing entity, a missing LLC ending, a resident agent without a Maryland street address, a missing agent signature, and the wrong fee. Fix the problem and refile; until SDAT accepts the articles for record, the LLC does not exist.

Step 4: EIN, operating agreement and bank account

EIN. Apply for an employer identification number from the IRS once SDAT accepts the articles. It costs Free ($0) and the online application gives you the number at the end of the session. You will need it to open a bank account, hire staff and register with the Comptroller. Our EIN application guide walks through each screen.

Operating agreement. Maryland does not require you to file an operating agreement, and the LLC Act gives maximum effect to the agreement the members sign. It should cover ownership percentages, profit shares, who can sign contracts and borrow, how a member leaves and what happens on death or divorce. Without one, the Act's default rules apply. A one-owner LLC still benefits from a short agreement, since banks ask for it and courts look at it.

Bank account. Open a business account in the LLC's exact name using the accepted articles, the EIN letter and the operating agreement. Keep business and personal money apart and pay yourself by transfer; our guide on how to pay yourself from an LLC explains draws and salary.

Beneficial ownership reporting. Since FinCEN's March 2025 interim final rule, companies formed in the United States do not file beneficial ownership information reports, so a new Maryland LLC has no BOI filing (current position: Not required for US-formed companies).

The $300 annual report, penalties and forfeiture

Every Maryland LLC files an annual report with SDAT by April 15 each year, beginning the year after it was formed. The report is combined with the business personal property return, on which you list furniture, fixtures, equipment and inventory located in Maryland as of January 1 so the county can assess personal property tax. An LLC with no property still files, still pays the $300 fee, and simply reports nothing. The fee has to accompany the report.

If you cannot finish by April 15, you can get an extension to June 15, provided you request it electronically by April 15 (or on paper by March 15, with a small processing fee). Many accountants request the extension routinely because the property schedule takes time.

A Maryland LLC's first two years

Day 1

Articles of organization accepted ($100, plus $50 if expedited)

Week 1

EIN, bank account, Comptroller registration and any trader's license

April 15 next year

First annual report and personal property return ($300)

After April 15 (no extension)

Penalty from $30 up to $500, plus 2% per 30 days

After September 30 of the following year

Forfeiture of the right to do business and use the name

Late penalties. Under section 14-704 of the Tax-Property Article, a late report brings an initial penalty of up to 0.1% of the LLC's total county assessment, but never less than $30 if 1 to 15 days late, $40 if 16 to 30 days late, or $50 if more than 30 days late, and never more than $500. On top of that, 2% of the initial penalty is added for each 30-day period the report stays unfiled. SDAT can reduce or waive the penalty if you show good cause.

Forfeiture. Immediately after September 30 each year, SDAT certifies every LLC that has not filed the prior year's annual report, and the Comptroller certifies LLCs with unpaid state taxes. SDAT then issues a proclamation forfeiting each listed LLC's right to do business in Maryland and to use its name. The forfeiture does not void contracts the LLC already made, and the LLC can still defend itself in court, but it cannot get a certificate of good standing, and another business can take its name.

Reinstatement. A forfeited LLC files articles of reinstatement with SDAT for $100 and must also file every missing annual report and pay the fees and penalties owed, along with clearing any taxes certified by the Comptroller. When a lender or buyer wants proof the LLC is active, order a certificate of status for $20; our certificate of good standing guide explains how certificates work.

Licences and tax registration after you form

SDAT's acceptance creates the LLC. It is not a license to trade, and other agencies need their own registrations.

Comptroller of Maryland. If you sell taxable goods or services, or hire employees, register with the Comptroller for a sales and use tax license and withholding account. Maryland's sales tax rate is 6%, and since July 1, 2025 certain data, information technology and software services are taxed at 3%.

Trader's license. Anyone who runs a place of business selling goods needs a trader's license from the clerk of the circuit court in their county. Outside Baltimore City and Baltimore County, the fee scales from $15 to $800 depending on the value of your stock-in-trade, and Baltimore City's scale reaches $2,125. The clerk checks that your SDAT filings are current before issuing or renewing it, which is one more reason to keep the annual report up to date. Our Maryland business license guide covers trader's licenses, renewal and the other clerk-issued licenses.

Employees. Hiring means registering for withholding with the Comptroller, for unemployment insurance with the Maryland Department of Labor, and carrying workers' compensation insurance. Our guide to hiring your first employee covers the federal steps.

How Maryland LLC owners are taxed

A single-member LLC owned by a person is ignored for income tax. The profit goes on the owner's federal Schedule C and Maryland Form 502. Maryland has two layers of income tax: a graduated state tax, and a county or Baltimore City local tax collected on the same return. The 2025 legislative session added two new top state brackets, 6.25% and 6.50%, for single filers with taxable income over $500,000 and $1 million (higher thresholds for joint filers), and capped the 5.75% bracket below them. It also raised the maximum local rate counties may set to 3.30%, effective for tax years after 2025, and added a 2% surtax on net capital gains for high earners.

A multi-member LLC taxed as a partnership files Maryland Form 510. Resident members pay tax on their shares on their own returns, but the LLC itself must pay Maryland tax on the shares of nonresident members, at 8.75% for nonresident individuals under the 2025 changes. Maryland also lets partnerships and S corporations elect to pay tax at entity level for all members, which can help owners who itemise federal deductions; ask an accountant before electing.

An LLC can elect S corporation treatment to split a working owner's income between a reasonable salary and distributions, which can lower federal self-employment tax once profits are steady. The cost is payroll and a Form 510 filing each year. Read LLC vs S corp before you elect.

What it costs: a worked first-year budget

The table shows three realistic Maryland LLCs. SDAT and trader's license fees are statutory; the registered agent line is a market estimate. The trader's license fee depends on inventory, so the figure for the shop assumes a modest stock and should be checked with the clerk.

What the table leaves out. Insurance, an accountant, local permits, food licences and professional licences sit on top, and the gift shop's personal property tax depends on what its county assesses.

Year two onwards. The fixed state charge is the $300 report. Over five years a Maryland LLC therefore pays $100 plus four reports, $1,300 in SDAT fees, which is far more than Minnesota, where the renewal is free, and less than Massachusetts, where the annual report alone is $500.

Worked examples

A Silver Spring IT consultant. Ade files his articles on Maryland Business Express for $100 in March 2026, naming himself as resident agent at his home office. He gets an EIN the same day. His data and IT services may fall under Maryland's 3% tax on technology services, so he checks the Comptroller's guidance and registers if his services are covered. His first annual report is due by April 15 next year; even though he owns only a laptop, he files it and pays the $300.

A Baltimore gift shop owned by two sisters. Keisha and Monique form "Harborside Goods LLC" with expedited processing so the LLC exists before their lease signing. They register with the Comptroller for a sales and use tax license, apply for a Baltimore City trader's license based on their opening inventory, and list their shelving, register and stock on the personal property return each April. As a two-member LLC with Maryland-resident members, they file Form 510 and report their shares on their own Form 502 returns.

A Virginia landlord buying a Maryland rental. Sam lives in Arlington and buys a townhouse in Hyattsville. He forms a Maryland LLC with a commercial resident agent, whose address also serves as the principal office. As a single-member LLC owned by an individual, it is disregarded for income tax, so Sam reports the rental income on a Maryland nonresident return rather than through the pass-through entity tax. He diarises April 15 for the $300 report so the LLC never approaches forfeiture.

Maryland LLC launch checklist

0/8

• Name checked on SDAT's records with an LLC ending
• Principal office and resident agent with Maryland addresses
• Articles of organization accepted and SDAT ID saved
• EIN issued and operating agreement signed
• Business bank account opened in the LLC's name
• Comptroller sales and use tax license if you sell taxable goods or services
• Trader's license from the circuit court clerk if you sell goods
• April 15 annual report date in your calendar every year

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Common mistakes and how to fix them

Thinking a dormant LLC can skip the report. The $300 report is due every year the LLC exists, whether or not it traded. If you no longer need the LLC, file articles of cancellation rather than letting it drift into forfeiture with penalties piling up.

Missing the electronic extension deadline. The extension to June 15 is only available if you ask by April 15 online (March 15 on paper). After that, penalties start.

Forgetting the principal office rule. Maryland expects a principal office in the state. Out-of-state owners often meet this with the commercial agent's address, but check that the agent's service covers it.

Assuming the LLC is a licence. SDAT does not tell the Comptroller or the circuit court clerk about you. Selling goods without a trader's license or sales tax license brings penalties.

Ignoring forfeiture notices. Once forfeited, your LLC cannot get a certificate of status and its name is up for grabs. Reinstate promptly by filing the missing reports and articles of reinstatement.

Official links

• Maryland Business Express (SDAT)File articles of organization and annual reports
• Corps. & Assns. § 1-203 — SDAT fees$100 articles, $300 annual report
• Tax-Property § 14-704 — late report penaltyPenalty and June 15 extension
• Corps. & Assns. § 4A-911 — forfeitureSeptember 30 certification
• Comptroller of Maryland — 2025 income tax changesNew brackets and local rates
• IRS — Apply for an EINFree

What to do next

Check your name with our LLC name checker, file on Maryland Business Express and get your EIN the same day. Before you open, register with the Comptroller and the circuit court clerk if you sell goods, using our Maryland business license guide, and put April 15 in your calendar. If you are still comparing structures, our LLC registration guide and LLC vs sole proprietorship explainer cover the options.

This is general information, not legal or tax advice — confirm on the official source or with a professional.

Frequently asked questions

How much does it cost to start an LLC in Maryland?

The State Department of Assessments and Taxation (SDAT) charges $100 to file articles of organization, plus $50 if you want expedited processing. From the year after you form, every LLC pays a $300 annual report fee by April 15. A retailer also needs a trader's license from the circuit court clerk, from $15 depending on inventory.

When is the Maryland LLC annual report due?

The annual report and business personal property return is due to SDAT by April 15 each year, starting the year after the LLC is formed. The fee is $300 whether or not the LLC owns property or did any business. You can get an extension to June 15 if you request it electronically by April 15.

What happens if a Maryland LLC doesn't file its annual report?

SDAT charges a late penalty of at least $30 and up to $500, plus 2% of that penalty for each further 30 days. If the report is still missing after September 30 of the following year, SDAT forfeits the LLC's right to do business in Maryland and to use its name. Reinstatement costs $100 plus every missed report, fee and penalty.

Does a Maryland LLC need a resident agent?

Yes. Section 4A-210 of the Corporations and Associations Article requires every Maryland LLC to keep a principal office in Maryland and a resident agent. The agent is usually a Maryland resident or a Maryland business entity with a street address in the state. A member can serve, and so can a commercial agent. Changing the agent's name or address later costs $25.

How long does it take to form an LLC in Maryland?

Standard processing at SDAT can take several weeks, which is why most founders pay the $50 expedited fee. For a same-day or guaranteed turnaround, Maryland law sets a higher $425 fee for preclearance-style processing. Check current times on SDAT's website or Maryland Business Express before planning around a date.

Do Maryland LLCs pay state income tax?

A single-member LLC pays no entity-level tax; the owner pays Maryland income tax at rates up to 6.50% plus a county tax of up to 3.30%. A multi-member LLC taxed as a partnership pays Maryland tax on nonresident members' shares, at 8.75% for individuals, while resident members pay on their own returns.

Sources & verification

Figures on this page were checked against the sources below when it was last reviewed on 11 October 2026. Each rate and limit is stored once with its own official source and review date, and official update channels are monitored daily so changes are picked up. How we verify

1. 1.Corporations and Associations § 1-203 — Fees — Maryland General Assembly · accessed 11 October 2026
2. 2.Corporations and Associations § 1-502 — Required name endings — Maryland General Assembly · accessed 11 October 2026
3. 3.Corporations and Associations §§ 4A-204 and 4A-210 — Maryland General Assembly · accessed 11 October 2026
4. 4.Corporations and Associations §§ 4A-911 and 4A-920 — Forfeiture — Maryland General Assembly · accessed 11 October 2026
5. 5.Tax-Property § 14-704 — Late annual report penalty — Maryland General Assembly · accessed 11 October 2026
6. 6.Tax-Property § 11-101 — Annual report due date — Maryland General Assembly · accessed 11 October 2026
7. 7.Tax Alert: Changes to standard and itemized deductions and to state and local income tax rates from the 2025 legislative session — Comptroller of Maryland · accessed 11 October 2026
8. 8.Business Regulation § 17-1807 — Trader's license fees — Maryland General Assembly · accessed 11 October 2026
9. 9.Get an employer identification number — IRS · accessed 11 October 2026
10. 10.Beneficial Ownership Information — FinCEN · accessed 11 October 2026