The Maryland Limited Liability Company Act is Title 4A of the Corporations and Associations Article, and it does two things for every LLC formed in the state: it treats the company as a legal person separate from its owners, and it supplies default rules that govern the company whenever your operating agreement is silent. The Act took effect in 1992 and controls how Maryland LLCs are formed, managed, kept in good standing, dissolved, and revived.
How the Act Treats Your LLC
Under Title 4A, an LLC can enter contracts, hold property, and sue or be sued in its own name. That separation is what makes limited liability possible: creditors of the company generally cannot reach a member’s personal assets so long as the distinction between owner and company is respected.1Maryland General Assembly. Maryland Code Corporations and Associations 4A-301
The rest of the Act works as gap-filler. If you and your co-owners write an operating agreement that spells out profit-sharing, voting, and management authority, those terms control. Where the agreement is silent or nonexistent, the Act steps in. That dual structure is why Maryland LLCs have a lot of flexibility and why a well-drafted operating agreement matters so much.
Forming the LLC
An LLC comes into existence when the State Department of Assessments and Taxation (SDAT) accepts your Articles of Organization. The document must include the company name, a physical Maryland street address for the principal office (no P.O. Boxes), a resident agent’s name and address, and a brief statement of business purpose. The name has to include “Limited Liability Company,” “LLC,” “L.L.C.,” or another approved abbreviation and cannot be misleadingly similar to any existing Maryland entity on file with SDAT.2Maryland State Department of Assessments and Taxation. Articles of Organization for a Limited Liability Company
The base filing fee is $100, with expedited and same-day options available for additional fees.3Maryland State Department of Assessments and Taxation. SDAT Corporate Charter Fee Schedule Filings go through the Maryland Business Express portal or by mail to SDAT. Once the articles are accepted, you receive an acknowledgment confirming the LLC’s legal existence; banks typically require this before opening a business account.
Resident Agent
Every Maryland LLC must maintain a resident agent at a physical Maryland address at all times. The agent is who receives legal papers if the company is sued. A P.O. Box will not satisfy the requirement.2Maryland State Department of Assessments and Taxation. Articles of Organization for a Limited Liability Company The agent must be either an adult citizen of Maryland or a Maryland-formed corporation, LLC, limited partnership, or limited liability limited partnership. The LLC cannot serve as its own resident agent.4Maryland Business Express. Register Your Business
Operating Agreement and Default Governance
The operating agreement is the private contract among members that can override most of the Act’s defaults on profit allocation, voting, management, and what happens when a member leaves.5Maryland General Assembly. Maryland Code Corporations and Associations 4A-402
One thing surprises people: Maryland does not require the operating agreement to be written. An oral agreement is enforceable unless the articles of organization specifically say otherwise.5Maryland General Assembly. Maryland Code Corporations and Associations 4A-402 Enforceable is not the same as provable. Put it in writing.
Member-Managed or Manager-Managed
The Act defaults to member-managed. Every owner acts as an agent of the company and can bind it in the ordinary course of business. If that is too broad, the articles of organization can include a statement limiting member authority. Once that statement is on file, no member has power to act for the LLC solely because they are a member, and third parties are presumed to know about the limitation.6Justia Law. Maryland Code Corporations and Associations 4A-401
In a manager-managed structure, designated individuals handle day-to-day operations. Managers do not need to be members. The operating agreement sets their authority, compensation, and removal procedures.
Member Rights and Fiduciary Duties
Members have the right to inspect the company’s books and records and to participate in management and voting. Those rights are classified as noneconomic interests under the statute, separate from a member’s economic stake in profits and distributions.7Maryland General Assembly. Maryland Code Corporations and Associations 4A-101 Anyone in control of the company owes fiduciary duties to the other members and to the entity itself. Those duties prevent self-dealing and misuse of company resources, and a breach can produce personal liability for the resulting damage.
Keeping the Liability Shield Intact
The Act’s core benefit is that no member is personally responsible for the company’s debts or obligations just by being a member.1Maryland General Assembly. Maryland Code Corporations and Associations 4A-301 The protection is not absolute. Courts can pierce the veil and hold members personally liable when they fail to treat the LLC as a genuinely separate entity. Commingling personal and business funds, ignoring basic recordkeeping, or using the LLC to commit fraud are the standard ways the shield is lost. A dedicated business bank account and written records of major decisions go a long way toward preserving it.
Staying in Good Standing
Every Maryland LLC must file an Annual Report (Form 1) with SDAT by April 15 each year. The first report is due the year after formation, even if the company never operated or earned a dollar.8Maryland Business Express. Maintain Good Standing Status The fee for domestic and foreign LLCs is $300.9Maryland State Department of Assessments and Taxation. Instructions for Business Entity Annual Report Form 1
The same form doubles as a Personal Property Tax Return. If your LLC owns tangible personal property in Maryland with an original cost of $20,000 or more, you report it on the form. If your total personal property statewide cost less than $20,000, you are exempt from the property-tax portion but still have to submit the report.9Maryland State Department of Assessments and Taxation. Instructions for Business Entity Annual Report Form 1
Missing the April 15 deadline triggers a late penalty that starts at $30 and grows the longer it sits. If the report stays unfiled, the LLC loses good standing and eventually faces forfeiture. A forfeited LLC cannot legally operate in Maryland, and the loss of good standing can expose members to personal liability for obligations the company takes on while it is out of compliance.8Maryland Business Express. Maintain Good Standing Status
Dissolving the LLC
Closing down under the Act follows a set sequence. Skipping steps can leave members exposed.
After the members agree to dissolve, the remaining members handle winding up the company’s affairs. If none remain, the successor to the last member does it.10Justia Law. Maryland Code Corporations and Associations 4A-904 During winding up, the company pays its debts, closes out contracts, and distributes what remains to the members according to the operating agreement.
If the LLC has known creditors, it must send notice of the planned termination by registered mail, return receipt requested. The Articles of Cancellation cannot be filed until at least 19 days after that notice is mailed. If there are no known creditors, cancellation can be filed immediately.11Justia Law. Maryland Code Corporations and Associations 4A-910 The Articles of Cancellation must state either that notice was sent along with the mailing date, or that the LLC has no known creditors.12Justia Law. Maryland Code Corporations and Associations 4A-909
Standard processing of the Articles of Cancellation has no filing fee. Expedited handling costs $50.13Maryland State Department of Assessments and Taxation. Instructions for Terminating a Maryland Limited Liability Company Once SDAT accepts the filing, the LLC is legally terminated.
Reinstating a Forfeited LLC
If your LLC was forfeited, reinstatement is possible but not fast. You must file all overdue Annual Reports and, if the LLC ever reported owning tangible personal property in Maryland, pay any outstanding personal property taxes to the county or city where the property was located and obtain a tax clearance certificate from that jurisdiction. SDAT will not accept a receipt in place of the certificate.14Maryland State Department of Assessments and Taxation. Guide for Reinstatement of Maryland LPs, LLCs, and LLPs
You then file Articles of Reinstatement with SDAT and a $100 filing fee. The form asks for the LLC’s name at the time of forfeiture, the name going forward, a physical Maryland principal office address, and the resident agent’s name and address.15Maryland State Department of Assessments and Taxation. Articles or Certificate of Reinstatement for an LLC, LLP, or LP Standard processing runs 6 to 8 weeks, with expedited and same-day service available for additional fees.14Maryland State Department of Assessments and Taxation. Guide for Reinstatement of Maryland LPs, LLCs, and LLPs If the forfeiture was for something beyond missed reports, that underlying issue has to be cleared before SDAT will process the reinstatement.
One Federal Rule That No Longer Applies
Beneficial Ownership Information (BOI) reporting used to require most LLCs to file with the Financial Crimes Enforcement Network. As of March 2025, all entities formed in the United States are exempt, and FinCEN is not enforcing penalties against domestic companies or their owners for failing to file. The requirement now applies only to entities formed under foreign law that have registered to do business in a U.S. state.16Financial Crimes Enforcement Network. Beneficial Ownership Information Reporting If your LLC was formed in Maryland, no BOI report is required.