You did it. Your Maryland LLC is officially up and running, ready to take on challenges, roll in the profits, and change the world.
There’s no doubt that this is an exciting time in your business journey. After starting your LLC, it’s easy to get carried away in all the excitement and expectations. After all, as a new business owner, you’ve got a lot on your plate.
But the state does too. They need to keep updated records on thousands of businesses so that they can effectively reach out with any important tax or legal communications down the road. How do they do it? With your cooperation, of course.
In Maryland, an LLC’s Annual Report may consist of one or two parts. All LLCs need to file the Annual Report to keep the state’s business database up-to-date, and LLCs that own business property in the state will also need to file the Personal Property Tax Return. Unsure how to go about it? Never even heard of it? No worries at all. That’s why we’re here. Keep reading for everything you need to know.
For brevity’s sake, we’ll refer to these two combined filings as the “Annual Report” in this guide.
If you’d like to hand off this responsibility to save time and focus on running your business, affordable LLC services are a great solution. Not only will they form your business in the first place, but they’ll also manage ongoing requirements like ongoing report filing. Once you're ready to lock it down, have ZenBusiness file all the paperwork.
What Is the Maryland Annual Report? Why Is It Important?
Consider an Annual Report the state’s yearly checkup on your LLC. It’s similar to a census in that its purpose is to collect the necessary contact and structural information about each Maryland business.
Each state has its own annual reporting requirements, and some don’t even require them. But in most states, you’re required to submit one per year that includes your LLC name, principal office address, resident agent information, and member/manager names and addresses. Whether you run a domestic or foreign LLC, you should plan on submitting an annual report.
Don’t be intimidated, but it’s not something you want to take lightly. This is how the state updates your LLC’s record with the most recent information. They need to know how to reach you with important information about your business status, upcoming filings, taxes, and service of process.
For example, if you change your resident agent, or your current agent resigns, you’ll need to keep the state informed so they can update their contact information. Miss one of their communications and your LLC in Maryland might end up falling out of good standing or, even worse, being administratively dissolved.
Moreover, keeping your information current will help other businesses and potential customers find you. If the Department of Assessments and Taxation has the most updated data on record, anyone (including future patrons and partners) can find your business by performing a name search.
Note: Additionally, if your LLC owns, uses, or leases personal property in Maryland, it will need to submit a Personal Property Tax Return along with your Annual Report. You can find the official form here and detailed filing instructions here.
How Much Does the Maryland LLC Annual Report Fee Cost?
If you’re putting together a budget for all your LLC’s costs – like formation costs, name reservation fees, and initial operating expenses – it’s important to include annual filings like this one, just so that there are no surprises.
Costs vary from state to state. Some are free while others can be several hundred dollars. At $300, Maryland’s fee is fairly steep, so make sure you set aside this money each year to cover your Annual Report.
Due Date and Frequency for an Annual Report in Maryland
You will need to file an Annual Report with the Department of Assessments and Taxation (and Personal Property Tax Return, if applicable) every year your LLC is active. Both submissions are due by April 15th, the same as your federal and state taxes.
You don’t need to file an Annual Report in the same calendar year that you officially form your LLC. Instead, you’ll file by April 15 of the next calendar year. For example, if you file your Articles of Organization at any point during 2021, whether that’s on February 20 or December 1, you’ll file your first Annual Report by April 15, 2022.
What Happens if You Don’t File?
You might be thinking, “that sounds like a pain. How bad could it be if I just fly under the radar?” The short answer: don’t try it. Failing to file your Annual Report and/or Personal Property Tax Return can yield some serious consequences.
Late fees are calculated based on your county assessment and how late you submit your report, so the state will mail you a bill. However, according to these annual reporting instructions, it can be as high as $500. Plus, if you fail to file an Annual Report, the state can potentially dissolve your LLC.
Whether you’re researching for the future or April 15th is fast approaching, it’s wise to keep all of the Annual Report’s required information top of mind. Here’s what you’ll need to complete the form:
- LLC name
- Mailing address
- Department ID number
- Federal Employer Identification Number (EIN)
- Federal principal business code (if known)
- Nature of business
- Trading as name (if applicable)
- Email address
- The LLC organizer’s name, signature, address, email address, and phone number
You will also need to answer the following questions to determine whether you will need to submit a Personal Property Tax Return.
- Does your LLC own, lease, or use personal property in Maryland?
- Does your LLC maintain retail sales or other licenses with a local unit of government?
- Does your LLC have gross sales in Maryland? If yes, you must provide the amount.
- Did your LLC dispose of, sell, or transfer all of its personal property before January 1?
If you need to complete a Personal Property Tax Return along with your Annual Report, the form will include detailed information about the monetary value of your LLC’s property, inventory, vehicles, equipment, research/development, and more.
It’s finally time to file. You’ve gathered all the necessary information and now you’re wondering how you can put it to use. There are two options: online and by mail.
Online Filing: You can submit a few different business documents through the Maryland Business Express filing portal, including your Annual Report. You will need to create an account if you haven’t already. Log in, choose the Annual Report filing option, enter your information, pay your fee using a credit/debit card, and you’re good to go! The Department of Assessments and Taxation will process it in 3-5 business days.
Department of Assessments and Taxation, Charter Division
P.O. Box 17052
Baltimore, Maryland 21297-1052
Don’t forget to include your $300 filing fee! If you’re filing a Personal Property Tax Return, include a separate check with the appropriate payment. The state will process your Annual Report in 5-7 business days and your Personal Property Tax Return in 7-10.
Does the State Send Reminders?
Reminders are always nice. They help you stay on top of your business requirements and ensure that you won’t fall out of good standing.
The Department of Assessments and Taxation will mail you or your resident agent a reminder in February, so you’ll have advance notice. However, we recommend establishing your own system of reminders – notes in your planner, alarms on your phone, whatever helps you the most.
There you have it, everything you need to know about Maryland’s reporting requirements. Follow this guide to a T and your LLC will be prepared to operate smoothly and in good standing long into the future.
And remember, if at any point it seems overwhelming, you’re not alone. A good LLC service like ZenBusiness (or LegalZoom) can be a valuable resource, taking care of all the little details, so you can focus on growing your business.
Frequently Asked Questions
About Filing the Maryland LLC Annual Report
Should I use an Annual Report service, hire an attorney, or prepare and file my own reports?
This question largely comes down to personal preferences, but we do have some general insights. The DIY route can be quite a bit of work, as you’ll need to keep track of your due dates and complete the entire report on your own with no assistance. As for hiring an attorney, this can be prohibitively expensive for many businesses, as a lawyer can charge hundreds or even thousands of dollars to prepare and file your Annual Reports.
You can think of business services companies as a middle ground between these options. While most of these companies charge a fee to prepare and file your Annual Reports, that fee will be significantly less expensive than an attorney’s fee. At the same time, you still aren’t going it alone. Instead, you have an experienced professional guiding you through the entire process.
I’ve heard the most about LegalZoom. Are they the best Annual Report service?
LegalZoom is the most well-known of all business services companies, thanks to its long track record and extensive advertising campaigns. That said, all of that brand power comes at a cost, as LegalZoom’s pricing and features don’t always compare advantageously to its competitors. While we do appreciate LegalZoom’s Annual Report filing service, it isn’t our top choice.
When is my Annual Report due each year?
No matter when you formed your LLC, your Annual Report must be submitted to the state no later than April 15.
Does Maryland require LLCs to file initial reports?
In some states, LLCs are also required to file initial reports. These reports are typically quite similar to Annual Reports, with the difference being that an initial report either accompanies your formation documents or follows their filing within a couple of months.
However, Maryland does not require LLCs to submit an initial report. This state gathers all of the information it needs for your first year on your Articles of Organization.
What if I need more time to complete my Annual Report?
If you need some additional time to finish preparing your Annual Report, Maryland offers a two-month filing extension for any LLC that applies for it. You can submit your request for an extension right here.
Where can I find more official information about Maryland’s LLC annual reporting requirements?
The best resource for info straight from the state is the official instructions. This document goes into a surprising amount of depth on a wide variety of topics related to the Maryland Annual Report.