The Maryland LLC operating agreement is a document that is designed to guide member-managed entities or sole proprietors through the process of establishing the various procedures and policies according to the type of business. The State of Maryland does not require any business operating within the State to complete and file this information. However, any decision to refuse the completion of this document, in the event of any form of litigation, bankruptcy, or any other liability, the members are risking their personal and financial assets to satisfy debts or claims against the company of which they are a member or owner. The owner/members must also consider that without placing this document into effect within the business, they would also deny the business the tax benefits that the business would have a right to if the document is implemented.
The owner/members should very carefully review the document prior to completion, in the event they feel they may need the services of an attorney for assistance or even simple, legal clarification. Prior to filing, members must be prepared to employ the services of a notary public to witness and acknowledge the signatures to the document.
Table of Contents
Multi-Member – For use by companies who will have more than one (1) contributing, managing member to properly and collectively establish the policies and procedures within the company. All members must be in unanimous agreement prior to application of signatures within the document.
Single-Member – For use by sole proprietors or single owners so that they may establish various procedures, policies etc. This agreement would be entered into between the owner of the business and the agreement itself.
Each applicant should of their business name before officially applying for registration in Maryland. The State Department of Assessments and Taxation has provided filers with the ability to search their records to view all entities currently registered. If the searched business is listed and operated under by an active entity, the name is unavailable.
Step 1 – Nominate a Registered Agent
The Registered Agent will handle service or process notices and other state filings on behalf of the LLC. In Maryland, the Registered Agent may be a resident of the State or a corporation currently operating in the State.
Step 2 – Entity Type
There are two fileable LLC types in the State; Domestic and Foreign. An entity formed within the State is considered a Domestic LLC while a Foreign LLC is an entity initially formed in an outside jurisdiction.
Choose your entity type and filing method from the following list:
*A Certificate of Existence (or like document) must be included with all Foreign LLC applications.
Step 3 – Filing Fee
A $100 fee is required to process all LLC filings (an additional $50 may be added if you’d like to expedite the filing time).
Those filing by mail should enclose a check made payable to the ‘State Department of Assessments and Taxation’ and send all articles to the following address:
State Department of Assessments and Taxation, Charter Division, 301 W. Preston Street; 8th Floor, Baltimore, MD 21201-2395
Step 4 – Operating Agreement
LLCs in the State of Maryland are not required to implement an operating agreement. However, it is recommended that one be drafted to provide legal evidence of the member(s) interest in the LLC, which is useful in the event of legal disputes between individuals of a multi-member LLC.
Step 5 – Employer Identification Number (EIN)
After filing your LLC in the State, you should immediately apply for an Employer Identification Number (EIN) from the Internal Revenue Service. This number is necessary to legally hire employees and perform financial transactions under the company name. Apply for an EIN by:
- Submitting Adobe PDF
- Completing the
Step 1 – Download the document, submit the company name in the first line at the top of the document.
Step 2 – Agreement – Submit a date in which the agreement shall be entered into (dd/mm/yy).
- Select the appropriate box
- Enter all required information
- Single-Member – Submit the company’s name and state where the company is located. Enter the owner’s full name and the business address
- Multi-Member – Submit names and addresses for each member
Step 3 – Name and Principal Place of Business –
- Provide the name of the company
- Submit the business address
- The city where the business is located
Review the remaining information in this section. Enter all required information:
- Enter the company’s formation date (dd/mm/yy)
- Read all information contained in the following titles:
Member Capitol Contributions –
- Check the box that best indicates the type of business
- Single-Members – Read the information provided
- Multi-Members – Submit each member’s name and contribution
Distributions – Members must read the information under this title (“distributions”).
- Check the box that applies
- Single-Members – Review all related information provided
- Multi-Members – Submit each member’s name and Percentage of Interest
- Members must continue by reviewing the remaining information
Step 4 – Books, Records and Tax Returns –
- Check the box that shall apply to the business type
- Review all provided information
Proceed by carefully reviewing the following titles:
- Bank Accounts
- Management of the Company
- Select and check the applicable box
- Single-Member – Review all of the information provided
- Multi-Members – Read all of the information contained
- Enter the maximums (agreed upon unanimously) into each line provided
Step 5 – Titled Sections – Members must check the box if applicable. Read the information provided, as follows:
- Meetings of Members – Submit an annual member meeting date
- Assignment of Interests
- Ownership of Company Property (Single-Member) – Check the box and read the information under the title
- Right of First Refusal
- Admission of New Members
- Withdrawal Events
- Dissolution and Liquidation – Select the applicable box and review all applicable information
- Representations of Members
- Certificates Evidencing Membership (Multi-Member) – Enter the name of the company. Submit the date that the document becomes effective, in dd/mm/yyyy format
- Indemnification (Sole Proprietors)
Step 6 – Signatures –
- Submit the date of execution of the agreement, in dd/mm/yy format
- Enter the company name
- A company representative my apply their signature (in witness)
- Each member must provide their signature, respectively
Once the document is complete, all members/owners must receive a copy of the document for personal record keeping.