How to Start a Business in Maryland
Everything you need to form your Maryland LLC, corporation, or sole proprietorship, with exact fees, timelines, and step-by-step instructions.
Maryland offers an efficient way to start a business, with LLC formation costing $100 to file Articles of Organization with SDAT. For pass-through entities like LLCs, members benefit from graduated state income tax rates of 2% to 6.5% plus county rates of 2.25% to 3.30%, compared to the flat 8.25% rate for stock corporations. Maryland's economy ranks 18th nationally with notable sectors including cybersecurity, biotechnology, professional services, and federal government contracting.
This guide covers every step from choosing a business structure to obtaining licenses.
Choosing Your Maryland Business Structure
This is the first decision and it affects everything: taxes, liability, paperwork. If you are unsure, an LLC is the right default for most Maryland small businesses.
| Entity Type | Liability Protection | Taxation | Maryland Filing Fee | Annual Cost | Best For |
|---|---|---|---|---|---|
| LLC | Yes | Pass-through | $100 | $300 Annual Report and Business Personal... | Most small businesses |
| Corporation | Yes | Double (C-Corp) or pass-through (S-Corp) | $120 | $300 Annual Report and Business Personal... | Raising investment, stock options |
| Sole Proprietorship | No | Pass-through | $0 | $0 | Freelancers, side hustles |
| Partnership | No | Pass-through | $0 | $0 | 2+ owners (consider an LLC instead) |
8 Steps to Start Your Maryland Business
- 1
Choose your business structure
LLC, corporation, or sole proprietorship. Each has different costs, tax treatment, and liability protection.
- 2
Pick and reserve your business name
Search the Maryland State Department of Assessments and Taxation (SDAT), Charter Division database. Reserve for $25 (30 days).
- 3
Appoint a registered agent
Must have a physical Maryland street address. Can be yourself (free) or a service ($100 to $300 per year).
- 4
File your formation documents
Articles of Organization (filed with SDAT) ($100) or Articles of Incorporation (filed with SDAT) ($120) with the Maryland State Department of Assessments and Taxation (SDAT), Charter Division.
- 5
Get your EIN from the IRS
Free, online, takes about 5 minutes. Do not pay anyone for this.
- 6
Register for a sales tax permit if you sell goods
Through the Comptroller of Maryland. State sales tax rate: 6%.
- 7
Get required licenses and permits
There is no single general state business license.
- 8
Register for Maryland taxes
Personal income tax: Graduated state rate of 2% to 6.5%, plus a county or Baltimore City local income tax of 2.25% to 3.30% for 2026.
How Much Does It Cost to Start a Business in Maryland?
| Item | Cost | Notes |
|---|---|---|
| LLC filing fee (Maryland State Department of Assessments and Taxation (SDAT), Charter Division) Required | $100 | Non-expedited filings are reviewed during the second calendar month after submission (paper filings within about 8... |
| Corporation filing fee Required | $120 | If forming a corporation instead |
| Annual Report and Business Personal... Required | $300 | April 15 each year; extension requests are filed at pprextensions.dat.maryland.gov |
| Name reservation | $25 | 30 days |
| Registered agent service | $0 to $300/yr | Free if you serve as your own |
| EIN (IRS) Required | $0 | Always free |
| Business license | Varies | There is no single general state business license. |
| Operating agreement | $0 to $500+ | Free template or attorney-drafted |
| Realistic LLC total (year 1) | $100 to $700 |
Start a Specific Business in Maryland
Maryland Business Guides
- How to Start an LLC in Maryland
- How to Start a Corporation in Maryland
- Sole Proprietorship in Maryland: How to Start One
- Maryland Business License: What You Need and How to Get It
- Maryland Home-Based Business Laws: Zoning, Permits and Rules
- How to Get an EIN in Maryland
- Maryland Business Name Search: How to Check and Reserve a Name
- How to Get a Resale Certificate in Maryland
- Maryland Registered Agent: Requirements and How to Choose One
- Best LLC Services in Maryland
- Maryland Business Taxes Explained for New Owners
- How Much Does It Cost to Start a Business in Maryland
Why Start a Business in Maryland?
- Forming an LLC costs $100 to file Articles of Organization with SDAT, and a stock corporation costs $120.
- Online rush service reviews a filing within 3 hours for an extra $325, versus a standard non-expedited review that lands in the second calendar month after submission.
- Every LLC and stock corporation pays a $300 Annual Report and Business Personal Property Return each April 15.
- The state sales and use tax is a flat 6% statewide, and Maryland counties and cities add no local sales tax on top.
- Corporate income is taxed at a flat 8.25%, while pass-through owners pay 2% to 6.5% state income tax plus a county rate of 2.25% to 3.30%.
- Maryland's economy produced $542.8 billion in current-dollar GDP in 2024, ranking 18th among the 50 states, with a population of 6,263,220 as of July 1, 2024.
Maryland Business Resources
Frequently Asked Questions
- How long does it take to form an LLC in Maryland?
- Non-expedited filings are reviewed during the second calendar month after submission. Expedited filings are reviewed in 7 to 14 business days, while online rush service reviews within 3 hours.
- What does it cost to start an LLC in the first year in Maryland?
- The Articles of Organization filing fee is $100. The Annual Report and Business Personal Property Return ($300) is due each April 15, so the total first-year cost is $400.
- Can a non-resident form an LLC in Maryland?
- Yes, Maryland's LLC formation rules do not include a residency requirement. Anyone can form an LLC by filing Articles of Organization with SDAT.
- What is the cheapest way to start a business in Maryland?
- An LLC costs $100 to form, which is less than a stock corporation at $120.
- Is an operating agreement required to form an LLC in Maryland?
- An operating agreement is not listed as a required filing with SDAT. The required filings are the Articles of Organization and the Annual Report and Business Personal Property Return.