Maryland LLC Formation

Maryland LLC Formation

Maryland LLC Formation Requirements

Articles of Organization: In any Maryland LLC formation, articles of organization must be signed and delivered, along with a copy, to the Maryland Secretary of State, Corporations Division for filing. State law requires that certain information be included in your articles of organization for your

Maryland LLC formation.

This information must include:
  • The LLC name

  • The purpose for which the limited liability company is formed

  • The address of its principal office in this State and the name and address of its resident agent

  • Any other provision, not inconsistent with law, which the members set out in the articles, which may include a statement that the authority of members to act on behalf of the LLC is limited.

Maryland LLC Formation - Filing

Filing: Your LLC is considered organized once the original executed articles of organization are delivered to the Corporations Division of the Secretary of State by one or more persons. The document must be executed, on behalf of the LLC, by the organizers.

A certificate of organization will be issued and delivered along with the conformed copy to the representative of the LLC. The original articles of organization will in turn be filed with the Secretary of State along with the month, day and year of filing.

Additionally, a Maryland LLC formation generally requires inclusion and/or considering of the following:

Maryland LLC Formation - Operating Agreement

Operating Agreement: Although not required, LLC members may adopt an operating agreement to regulate the internal affairs of the company, including the management of the LLC, which may also be amended and repealed as allowed by the agreement or applicable law.

Maryland LLC Formation - Membership

Membership: A LLC must have at least one or more members. Requirements:

Minimum Number of Members: A limited liability company must have one or more members

Maryland LLC - Eligibility Requirements

Procedure for Membership: A person may be admitted as a member of a LLC: (1) at the time the LLC is formed or at a later time specified in the operating agreement or (2) after formation, directly from the LLC in compliance with the operating agreement or upon the written consent of all members.

Unless otherwise provided in the articles or operating agreement, a person may be admitted as a member of the LLC or the sole member of a LLC without:

Making a contribution to the LLC or being obligated to make a contribution to the LLC

Acquiring an interest in the limited liability company.

Maryland LLC - Resignation of Membership

Resignation of Membership: Certain prohibitions exist surrounding the right of a member to resign from the company. A member may withdraw by giving not less than 6 months' prior written notice to the other members at their respective addresses as shown on the books of the limited liability company, unless:

The operating agreement provides that the member does not have the right or power to withdraw

The operating agreement specifies another time for or other conditions of withdrawal.

A member will be responsible for any damages resulting from a wrongful withdrawal.

Maryland LLC - Contribution

Contribution: The contributions of a member to the LLC may consist of cash, property, services rendered, or a promissory note or other binding obligation to contribute cash or property or to perform services.

Maryland's 2009 Business Tax Climate Ranks 45th

Maryland ranks 45th in the nation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: Delaware (10th), Pennsylvania (28th), West Virginia (36th) and Virginia (15th).

Maryland's Individual Income Tax System

Maryland's personal income tax system consists of eight separate brackets with a top rate of 6.25%, kicking in at an income level of $1,000,000. Among states levying an individual income tax, Maryland's top rate ranks 20th highest nationally. Maryland's 2006 individual income tax collections were $1,762 per person, which ranked 2nd highest nationally.

Maryland's Corporate Income Tax System

Maryland's corporate tax structure consists of a flat rate of 8.25% on all corporate income. Among states levying corporate income taxes, Maryland's rate ranks 15th highest nationally. In 2007, state-level corporate tax collections (excluding local taxes) were $139 per capita, which ranked the state 30th highest nationally.

Maryland Levies Sales Tax at National Median

Maryland levies a 6% general sales or use tax on consumers, at the national median. State and local governments combined collected approximately $605 per capita in sales taxes in 2006, which ranks 43rd highest nationally. Maryland's gasoline tax stands at 23.5 cents per gallon, which ranks 26th highest nationally. Maryland's cigarette tax stands at $2.00 per pack of twenty, ranking 9th highest nationally. The sales tax was adopted in 1947, the gasoline tax in 1922 and the cigarette tax in 1958.

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