====== Start a business in Maryland (form a limited liability company) ====== **Maryland · How do I start a business?** · state model checked by Claude · quality 1.00 //Generated by [[https://github.com/alibama/lexflow|lexflow]] from the state statutes (open-us-law, government publisher text) and checked by Claude: every quoted phrase was matched word for word against the statute text, and the process passed the BPMN/DMN schemas, bpmnlint and a Petri-net soundness check. Information, not legal advice.// **Governing law:** [[https://mgaleg.maryland.gov/mgawebsite/Laws/StatuteText?article=gca§ion=4A-202&enactments=false|Md. Code, Corporations and Associations § 4A-202]] ===== Process map ===== Someone wants to start a business and form a limited liability company The filing path models the LLC; corporations follow the parallel procedure in §§ 1-201 and 1-202 (not printed here), and limited partnerships are formed, and partnerships qualify as LLPs, at filing of their certificates (§ 10-201(b), § 9A-1001(b)). Maryland does not issue a 'certificate of organization': the Department endorses its acceptance, records the articles and sends an acknowledgment (§ 4A-207(c)); the LLC exists from acceptance or a later time stated in the articles, if there has been substantial compliance (§ 4A-202(b)). Formation happens at the acceptance the Department endorses (endorse_acceptance) or a later time in the articles; the single 'LLC formed' end event sits after the acknowledgment (and after the trade name certificate is recorded, when one is needed) only because a BPMN end event cannot mark a midpoint without an unsound parallel split, and the acknowledgment states the acceptance date and time (§ 4A-207(c)(3)). The optional trade name branch rejoins the main path through an exclusive merge in front of that end event, so a company that trades under another name is still shown as formed. § 4A-207(a) and (b) are prohibitions (the Department may not accept nonconforming or unpaid documents); the review that applies them is implied, not stated. Under § 4A-207(a)(2) the Department may treat a document that purports to be acknowledged as properly acknowledged. The naming rules of Title 1, Subtitle 5 that § 4A-208 applies to the articles are not printed here; the 'name_complies' input stands for them. The stock-corporation organization and capitalization fee under § 1-204(c)(1) depends on the aggregate par value of the capital stock, so the stock and professional corporation fee cells say 'See 1-204'. The limited partnership rule fires before the LLC rule (the comparison table's fixed priority) whenever protection and passive co-owners are both wanted, although its general partner stays exposed (§ 10-403); the output points owners who all need protection to the LLC. § 5-102(a)(2) says a corporation eligible to be a professional corporation may not organize under any other corporate form (with the § 5-102(a)(3) exceptions); whether that bars choosing an LLC instead is not settled by the printed text, which speaks only of 'corporate form'. Maryland has no separate professional limited liability company statute; § 4A-203(10) lets any LLC render professional services, subject to the licensing board for the profession. Trader's licences under Business Regulation Title 17, Subtitle 18 are applied for with, and issued by, 'the clerk' (§ 17-1804, § 17-1805; not printed in full here); the printed sections do not name which clerk. Fees vary by county, with separate schedules for Baltimore City and Baltimore County (§ 17-1807). Growers, makers and manufacturers are exempt (§ 17-1803(d)). Local zoning, health and occupancy permits are outside the state statutes and attach in the local layer. The trade name certificate must be filed before the business starts operating (§ 1-406(a)); the schema has no 'before' deadline, so this stays in the step text. It must be in writing, affirmed or acknowledged under oath, and give the owner's names and addresses, the character and location of the business, the trade name, and the identification number the Department assigned to the business (§ 1-406(a)(1)-(3)), which is why it follows formation. The trade name certificate is effective for 5 years; the filer may renew it by applying within 6 months before the 5-year period ends, and each renewal extends it 5 years (fee $25 under § 1-406(e)(2), § 1-406(f)). The version of § 1-203 that takes effect October 1, 2026 (Chapters 198 and 199 of 2025) is now in force; it keeps every fee used here and adds the limited worker cooperative association (an LLC that elects that status under § 4A-12A-04, $100 articles of organization). The comparison table has no input that separates a worker cooperative from an ordinary LLC, so it is noted on the LLC row rather than given its own rule. State tax registration (Comptroller), employer registration and the annual report ($300, § 1-203(b)(3)(ii)) follow formation and are not modelled. Once the LLC is formed it is the person doing business, so the company files the trade name certificate (§ 1-406(a)), which must give the Department's identification number for the business (§ 1-406(a)(3)(iv)). § 1-406(a) also requires the certificate from anyone engaged in a mercantile, trading, or manufacturing business as an agent, even under its own name. start deliver_articles collect_fee review_articles endorse_acceptance record_articles send_acknowledgment file_trade_name collect_trade_name_fee record_trade_name llc_formed llc_formed_join review_articles_gw review_articles_not_endorse_acceptance send_acknowledgment_gw Md. Code, Corporations and Associations § 4A-202(a): “Any person may form a limited liability company by causing articles of organization to be executed and filed for record with the Department.” Any person may form a limited liability company by causing articles of organization to be executed and filed for record with the Department. sf2 Md. Code, Corporations and Associations § 4A-202(a): “causing articles of organization to be executed and filed for record with the Department” causing articles of organization to be executed and filed for record with the Department sf2 sf3 Md. Code, Corporations and Associations § 1-203(b)(4): “For each of the following documents recorded or filed the nonrefundable processing fee is $100” For each of the following documents recorded or filed the nonrefundable processing fee is $100 sf3 sf4 Md. Code, Corporations and Associations § 4A-207(a)(1): “The Department may not accept for record or filing any document of a limited liability company that does not conform with law.” The Department may not accept for record or filing any document of a limited liability company that does not conform with law. articles_comply sf4 sf6 Md. Code, Corporations and Associations § 4A-207(c)(1): “Endorse on the document its acceptance for record and the date and time of acceptance” Endorse on the document its acceptance for record and the date and time of acceptance sf7 sf8 Md. Code, Corporations and Associations § 4A-207(c)(2): “Record promptly the document” Record promptly the document sf8 sf9 Md. Code, Corporations and Associations § 4A-207(c)(3): “Send an acknowledgment to the limited liability company, its attorney, or its agent stating the date and time that the document was accepted for record” Send an acknowledgment to the limited liability company, its attorney, or its agent stating the date and time that the document was accepted for record sf9 sf10 Md. Code, Corporations and Associations § 1-406(a): “engaged in any mercantile, trading, or manufacturing business as an agent or doing business or trading under any designation, title, or name other than the person’s own name, prior to commencing operation of the business, shall file with the Department a certificate” engaged in any mercantile, trading, or manufacturing business as an agent or doing business or trading under any designation, title, or name other than the person’s own name, prior to commencing operation of the business, shall file with the Department a certificate sf11 sf13 Md. Code, Corporations and Associations § 1-406(e)(1): “$25 for recording the certificates under this section” $25 for recording the certificates under this section sf13 sf14 Md. Code, Corporations and Associations § 1-406(d)(2): “The agency record shall record all certificates filed in accordance with this section, and the certificates shall be properly indexed.” The agency record shall record all certificates filed in accordance with this section, and the certificates shall be properly indexed. sf14 sf15 Md. Code, Corporations and Associations § 4A-202(b): “A limited liability company is formed at the time when the Department accepts the articles of organization for record or at a later time specified in the articles, if in either case there has been substantial compliance with this title.” A limited liability company is formed at the time when the Department accepts the articles of organization for record or at a later time specified in the articles, if in either case there has been substantial compliance with this title. sf1 sf12 sf15 sf1 sf6 sf7 sf5 sf5 sf10 sf11 sf12 articles_ok trades_under_other_name_or_as_agent ===== Steps and the words they come from ===== - **File articles of organization for record** — Founder (person forming the business) · //permission// (§ 4A-202(a)) \\ “//causing articles of organization to be executed and filed for record with the Department//” - **Collect the $100 processing fee** — State Department of Assessments and Taxation · //obligation// (§ 1-203(b)(4)) \\ “//For each of the following documents recorded or filed the nonrefundable processing fee is $100//” - **Accept no nonconforming or unpaid articles** — State Department of Assessments and Taxation · //prohibition// (§ 4A-207(a)(1)) \\ “//The Department may not accept for record or filing any document of a limited liability company that does not conform with law.//” - **Endorse acceptance with date and time** — State Department of Assessments and Taxation · //obligation// (§ 4A-207%%(c)%%(1)) \\ “//Endorse on the document its acceptance for record and the date and time of acceptance//” - **Record the articles promptly** — State Department of Assessments and Taxation · //obligation// (§ 4A-207%%(c)%%(2)) \\ “//Record promptly the document//” - **Send acknowledgment of acceptance** — State Department of Assessments and Taxation · //obligation// (§ 4A-207%%(c)%%(3)) \\ “//Send an acknowledgment to the limited liability company, its attorney, or its agent stating the date and time that the document was accepted for record//” - **File trade name certificate before trading** — The limited liability company, its attorney, or its agent · //obligation// (§ 1-406(a)) \\ “//engaged in any mercantile, trading, or manufacturing business as an agent or doing business or trading under any designation, title, or name other than the person’s own name, prior to commencing operation of the business, shall file with the Department a certificate//” - **Collect $25 trade name recording fee** — State Department of Assessments and Taxation · //obligation// (§ 1-406(e)(1)) \\ “//$25 for recording the certificates under this section//” - **Record certificate in agency record** — State Department of Assessments and Taxation · //obligation// (§ 1-406(d)(2)) \\ “//The agency record shall record all certificates filed in accordance with this section, and the certificates shall be properly indexed.//” ===== Can the Department accept the articles of organization for record? ===== Decision table (DMN), hit policy FIRST. ^ Articles state the company's name ^ Name meets the Title 1, Subtitle 5 naming rules ^ Principal office in Maryland given ^ Resident agent name and address given ^ Agent is a Maryland resident or Maryland corporation, LLC or LP ^ Executed by an individual authorized by the persons forming the LLC ^ All required fees paid ^ → Articles accepted for record ^ Source ^ | false | - | - | - | - | - | - | false | § 4A-204(a)(1) | | - | false | - | - | - | - | - | false | § 4A-208 | | - | - | false | - | - | - | - | false | § 4A-204(a)(2) | | - | - | - | false | - | - | - | false | § 4A-204(a)(2) | | - | - | - | - | false | - | - | false | § 1-101(x) | | - | - | - | - | - | false | - | false | § 4A-206(a)(1) | | - | - | - | - | - | - | false | false | § 4A-207(b) | | true | true | true | true | true | true | true | true | § 4A-207(a)(1) | ===== Which business structure fits, and what must be filed with the state? ===== Decision table (DMN), hit policy FIRST. ^ Organized for a nonprofit or charitable purpose ^ Owners render a licensed professional service ^ Number of owners ^ Owners want protection from the business's debts ^ Plans to sell shares to outside investors ^ Some co-owners will be passive investors only ^ → Business structure ^ → What is filed with the state, and where ^ → State filing fee ^ Source ^ | true | - | - | - | - | - | Nonstock (nonprofit) corporation | Articles of incorporation whose charter provides the corporation has no authority to issue capital stock, filed for record with the State Department of Assessments and Taxation | $100 + $20 organization and capitalization fee ($120), or $150 + $20 ($170) for a 501%%(c)%%(3), (4) or (6) nonprofit | § 5-202(a) | | - | true | - | true | - | - | Professional corporation (a limited liability company may also render professional services; Maryland has no separate professional LLC form; architects, professional engineers, real estate licensees and veterinarians may instead use an ordinary corporation, § 5-102(a)(3)) | Articles of incorporation stating that the corporation is a professional corporation and the professional services it renders, filed for record with the State Department of Assessments and Taxation | $100 plus the organization and capitalization fee (See 1-204) | § 5-112(a) | | - | - | - | true | true | - | Stock corporation | Articles of incorporation signed and acknowledged by one or more adult incorporators, filed for record with the State Department of Assessments and Taxation | $100 plus the organization and capitalization fee (See 1-204) | § 2-102(a) | | - | - | %%>%%= 2 | true | - | true | Limited partnership (limited partners who stay out of control of the business are not liable for its obligations; the general partner cannot limit its liability to outsiders, so if every owner needs protection choose a limited liability company) | Certificate of limited partnership executed by all general partners, filed with the State Department of Assessments and Taxation | $100 | § 10-201(a) | | - | - | - | true | - | - | Limited liability company (worker-owned businesses may elect in the articles to be a limited worker cooperative association) | Articles of organization filed for record with the State Department of Assessments and Taxation | $100 | § 4A-202(a) | | - | - | 1 | false | - | - | Sole proprietorship | No formation filing; before trading under any name other than the owner's own, file a trade name certificate ($25) with the State Department of Assessments and Taxation | None | § 1-406(a) | | - | - | %%>%%= 2 | false | - | - | General partnership | No formation filing (a partnership forms by association); the partners may register as a limited liability partnership by filing a certificate of limited liability partnership ($100) with the State Department of Assessments and Taxation | None | § 9A-202(a) | ===== What the text leaves open ===== * The filing path models the LLC; corporations follow the parallel procedure in §§ 1-201 and 1-202 (not printed here), and limited partnerships are formed, and partnerships qualify as LLPs, at filing of their certificates (§ 10-201(b), § 9A-1001(b)). * Maryland does not issue a 'certificate of organization': the Department endorses its acceptance, records the articles and sends an acknowledgment (§ 4A-207%%(c)%%); the LLC exists from acceptance or a later time stated in the articles, if there has been substantial compliance (§ 4A-202(b)). * Formation happens at the acceptance the Department endorses (endorse_acceptance) or a later time in the articles; the single 'LLC formed' end event sits after the acknowledgment (and after the trade name certificate is recorded, when one is needed) only because a BPMN end event cannot mark a midpoint without an unsound parallel split, and the acknowledgment states the acceptance date and time (§ 4A-207%%(c)%%(3)). The optional trade name branch rejoins the main path through an exclusive merge in front of that end event, so a company that trades under another name is still shown as formed. * § 4A-207(a) and (b) are prohibitions (the Department may not accept nonconforming or unpaid documents); the review that applies them is implied, not stated. Under § 4A-207(a)(2) the Department may treat a document that purports to be acknowledged as properly acknowledged. * The naming rules of Title 1, Subtitle 5 that § 4A-208 applies to the articles are not printed here; the 'name_complies' input stands for them. * The stock-corporation organization and capitalization fee under § 1-204%%(c)%%(1) depends on the aggregate par value of the capital stock, so the stock and professional corporation fee cells say 'See 1-204'. * The limited partnership rule fires before the LLC rule (the comparison table's fixed priority) whenever protection and passive co-owners are both wanted, although its general partner stays exposed (§ 10-403); the output points owners who all need protection to the LLC. * § 5-102(a)(2) says a corporation eligible to be a professional corporation may not organize under any other corporate form (with the § 5-102(a)(3) exceptions); whether that bars choosing an LLC instead is not settled by the printed text, which speaks only of 'corporate form'. * Maryland has no separate professional limited liability company statute; § 4A-203(10) lets any LLC render professional services, subject to the licensing board for the profession. * Trader's licences under Business Regulation Title 17, Subtitle 18 are applied for with, and issued by, 'the clerk' (§ 17-1804, § 17-1805; not printed in full here); the printed sections do not name which clerk. Fees vary by county, with separate schedules for Baltimore City and Baltimore County (§ 17-1807). Growers, makers and manufacturers are exempt (§ 17-1803(d)). Local zoning, health and occupancy permits are outside the state statutes and attach in the local layer. * The trade name certificate must be filed before the business starts operating (§ 1-406(a)); the schema has no 'before' deadline, so this stays in the step text. It must be in writing, affirmed or acknowledged under oath, and give the owner's names and addresses, the character and location of the business, the trade name, and the identification number the Department assigned to the business (§ 1-406(a)(1)-(3)), which is why it follows formation. * The trade name certificate is effective for 5 years; the filer may renew it by applying within 6 months before the 5-year period ends, and each renewal extends it 5 years (fee $25 under § 1-406(e)(2), § 1-406(f)). * The version of § 1-203 that takes effect October 1, 2026 (Chapters 198 and 199 of 2025) is now in force; it keeps every fee used here and adds the limited worker cooperative association (an LLC that elects that status under § 4A-12A-04, $100 articles of organization). The comparison table has no input that separates a worker cooperative from an ordinary LLC, so it is noted on the LLC row rather than given its own rule. * State tax registration (Comptroller), employer registration and the annual report ($300, § 1-203(b)(3)(ii)) follow formation and are not modelled. * Once the LLC is formed it is the person doing business, so the company files the trade name certificate (§ 1-406(a)), which must give the Department's identification number for the business (§ 1-406(a)(3)(iv)). § 1-406(a) also requires the certificate from anyone engaged in a mercantile, trading, or manufacturing business as an agent, even under its own name. ===== Court decisions citing this law ===== //Found with [[https://www.courtlistener.com|CourtListener]] (Free Law Project): opinions in the state's appellate courts whose text cites these sections. Listed for research; not every citing case construes the section.// * [[https://www.courtlistener.com/opinion/7974191/hartford-accident-indemnity-co-v-scarlett-harbor-associates-ltd/|Hartford Accident & Indemnity Co. v. Scarlett Harbor Associates Ltd. Partnership]] (Court of Special Appeals of Maryland, 1996, 109 Md. App. 217; 674 A.2d 106; 1996 Md. App. LEXIS 56) — cites § Corporations and Associations § 1-203 * [[https://www.courtlistener.com/opinion/7974191/hartford-accident-indemnity-co-v-scarlett-harbor-associates-ltd/|Hartford Accident & Indemnity Co. v. Scarlett Harbor Associates Ltd. Partnership]] (Court of Special Appeals of Maryland, 1996, 109 Md. App. 217; 674 A.2d 106; 1996 Md. App. LEXIS 56) — cites § Corporations and Associations § 5-202 * [[https://www.courtlistener.com/opinion/1529634/hecht-v-resolution-trust-corp/|Hecht v. Resolution Trust Corp.]] (Court of Appeals of Maryland, 1994, 635 A.2d 394; 333 Md. 324; 1994 Md. LEXIS 9) — cites § Corporations and Associations § 5-102 * [[https://www.courtlistener.com/opinion/4523099/blackstone-v-sharma/|Blackstone v. Sharma]] (Court of Appeals of Maryland, 2018, 191 A.3d 1188; 461 Md. 87) — cites § Corporations and Associations § 1-101 * [[https://www.courtlistener.com/opinion/1922223/mayor-of-baltimore-v-chase/|Mayor of Baltimore v. Chase]] (Court of Appeals of Maryland, 2000, 756 A.2d 987; 360 Md. 121; 2000 Md. LEXIS 457) — cites § Corporations and Associations § 1-203 * [[https://www.courtlistener.com/opinion/10020970/plank-v-cherneski/|Plank v. Cherneski]] (Court of Appeals of Maryland, 2020, 231 A.3d 436; 469 Md. 548) — cites § Corporations and Associations § 4A-202 * [[https://www.courtlistener.com/opinion/1501692/klein-v-weiss/|Klein v. Weiss]] (Court of Appeals of Maryland, 1978, 395 A.2d 126; 284 Md. 36; 1978 Md. LEXIS 450) — cites § Corporations and Associations § 5-102 * [[https://www.courtlistener.com/opinion/2180448/renbaum-v-custom-holding-inc/|Renbaum v. Custom Holding, Inc.]] (Court of Appeals of Maryland, 2005, 871 A.2d 554; 386 Md. 28; 2005 Md. LEXIS 170) — cites § Corporations and Associations § 1-203 * [[https://www.courtlistener.com/opinion/2323867/ramlall-v-mobilepro-corp/|Ramlall v. Mobilepro Corp.]] (Court of Special Appeals of Maryland, 2011, 30 A.3d 1003; 202 Md. App. 20; 2011 Md. App. LEXIS 153) — cites § Corporations and Associations § 1-101 * [[https://www.courtlistener.com/opinion/2077252/price-v-upper-chesapeake-health-ventures/|Price v. Upper Chesapeake Health Ventures]] (Court of Special Appeals of Maryland, 2010, 995 A.2d 1054; 192 Md. App. 695; 2010 Md. App. LEXIS 86) — cites § Corporations and Associations § 1-101 * [[https://www.courtlistener.com/opinion/2310622/danielewicz-v-arnold/|Danielewicz v. Arnold]] (Court of Special Appeals of Maryland, 2001, 769 A.2d 274; 137 Md. App. 601; 2001 Md. App. LEXIS 64) — cites § Corporations and Associations § 1-101 * [[https://www.courtlistener.com/opinion/2160497/toner-v-baltimore-envelope-co/|Toner v. Baltimore Envelope Co.]] (Court of Appeals of Maryland, 1985, 498 A.2d 642; 304 Md. 256; 1985 Md. LEXIS 878) — cites § Corporations and Associations § 1-204 * [[https://www.courtlistener.com/opinion/1511364/shah-v-healthplus-inc/|Shah v. HealthPlus, Inc.]] (Court of Special Appeals of Maryland, 1997, 696 A.2d 473; 116 Md. App. 327; 1997 Md. App. LEXIS 111) — cites § Corporations and Associations § 1-101 * [[https://www.courtlistener.com/opinion/1951824/williams-v-anne-arundel-county/|Williams v. Anne Arundel County]] (Court of Appeals of Maryland, 1994, 638 A.2d 74; 334 Md. 109; 1994 Md. LEXIS 60) — cites § Corporations and Associations § 5-202 * [[https://www.courtlistener.com/opinion/10048658/mas-associates-v-korotki/|MAS Associates v. Korotki]] (Court of Appeals of Maryland, 2019, 465 Md. 457) — cites § Corporations and Associations § 4A-202 * [[https://www.courtlistener.com/opinion/1467603/koontz-v-association-of-classified-employees/|Koontz v. Association of Classified Employees]] (Court of Appeals of Maryland, 1983, 467 A.2d 753; 297 Md. 521; 1983 Md. LEXIS 319; 118 L.R.R.M. (BNA) 3415) — cites § Corporations and Associations § 5-202 * [[https://www.courtlistener.com/opinion/2404215/mountain-manor-realty-inc-v-buccheri/|Mountain Manor Realty, Inc. v. Buccheri]] (Court of Special Appeals of Maryland, 1983, 461 A.2d 45; 55 Md. App. 185; 1983 Md. App. LEXIS 312) — cites § Corporations and Associations § 1-204 * [[https://www.courtlistener.com/opinion/1500806/utica-mutual-insurance-v-gaithersburg-washington-grove-fire-department/|Utica Mutual Insurance v. Gaithersburg-Washington Grove Fire Department, Inc.]] (Court of Special Appeals of Maryland, 1983, 455 A.2d 987; 53 Md. App. 589; 1983 Md. App. LEXIS 224) — cites § Corporations and Associations § 1-203 * [[https://www.courtlistener.com/opinion/2681083/prince-georges-co-v-zimmer-development/|Prince George's Co. v. Zimmer Development]] (Court of Special Appeals of Maryland, 2014, 217 Md. App. 310; 92 A.3d 601; 2014 Md. App. LEXIS 50) — cites § Corporations and Associations § 1-101 * [[https://www.courtlistener.com/opinion/1518440/atlantic-golf-ltd-partnership-v-maryland-economic-development-corp/|Atlantic Golf, Ltd. Partnership v. Maryland Economic Development Corp.]] (Court of Appeals of Maryland, 2003, 832 A.2d 207; 377 Md. 115; 2003 Md. LEXIS 615) — cites § Corporations and Associations § 1-101 ===== Checks ===== * Quotes checked word for word: 26 (0 not exact) * BPMN / DMN schema errors: 0 / 0; bpmnlint errors: 0 * Petri nets sound: 1 of 1 * Sections used: Corporations and Associations § 4A-202, Corporations and Associations § 4A-204, Corporations and Associations § 4A-206, Corporations and Associations § 4A-207, Corporations and Associations § 4A-208, Corporations and Associations § 1-101, Corporations and Associations § 1-203, Corporations and Associations § 1-204, Corporations and Associations § 1-406, Corporations and Associations § 5-202, Corporations and Associations § 5-112, Corporations and Associations § 5-102, Corporations and Associations § 4A-203, Corporations and Associations § 2-102, Corporations and Associations § 10-201, Corporations and Associations § 10-303, Corporations and Associations § 10-403, Corporations and Associations § 9A-202, Corporations and Associations § 9A-1001, Business Regulation § 17-1803 ===== Local answers ===== * [[lexflow:md:baltimore:business|City of Baltimore]] ← [[lexflow:md|Maryland]] · [[lexflow:start|lexflow models]]