You’ve done the hard work of filing your articles of organization and drafting an operating agreement. Your Maryland LLC is up and running—and you’re excited to move beyond all the preliminary paperwork. Unfortunately, your obligations aren’t quite over. In addition to tax filings, you face a yearly requirement known as the annual report.
This filing might not seem like a big deal, but the failure to submit could hold huge implications for your business. It’s simply not worth the risk, especially if you can get outside help.
Keep reading to learn why your Maryland LLC annual report is such a big deal—and what it takes to streamline this obligation, so you can continue to focus on the day-to-day challenges of running your business.
The state of Maryland requires all legal entities to provide regular updates on business status, contact information, and more. These filings are officially known as annual reports.
In Maryland, multiple approaches to annual reporting are available. Legal business entities (including corporations, limited liability companies, and limited liability partnerships) are required to file Form 1 every year. Credit unions and other financial institutions (such as banks or trust companies) file alternate forms.
Maryland’s version of the LLC annual report can be surprisingly easy to complete, although this varies from one business to the next. To be approved, this document should include these key details:
Many of these entries will remain consistent from one year to the next. This makes what could otherwise feel like a huge hassle a bit less of a burden. That being said, you may need to amend the report if your resident agent or business address change. If you make any adjustments in a given year, you will need to check a box indicating that you will be submitting an amended report.
Filing your Maryland annual report may seem like a hassle at times, but the process is surprisingly straightforward. Below, we dive into all the essential details, including the due date, fees, and methods (online, in person, and by mail) for submitting Maryland annual reports.
Traditionally, Maryland LLCs have had to fork over $300 every year for the privilege of filing annual reports. This fee is often accompanied by extra filing costs, such as charges for paying via credit card, PayPal, or e-check. There are no filing fees for sole proprietors or general partners, but remember: There’s a very noteworthy upside to paying extra for maintaining LLC status— aid in protection from personal liability.
Good news: Filing fees for Maryland annual reports may soon be a thing of the past. Governor Larry Hogan supports legislation that will get rid of the annual report fee for filing online. The obvious goal is to incentivize digital filing over traditional mail-based solutions. This legislation will make Maryland the first state to adopt a no-fee filing option for LLC annual reports.
Early April may feel overwhelming due to the burdens of tax season, but unfortunately, Maryland’s annual report timeline adds yet another obligation to an already busy time of year.
The official deadline for each Maryland annual report is April 15, unless that date falls on a weekend. If so, the annual report will be due the following Monday. If the annual report is postmarked by the close of business, you should be in the clear.
It’s possible to file a 60-day extension free of charge. These requests should be made on—or prior to—the annual report due date. If you suspect that you may need to file your annual report late, it’s worth your while to seek an extension.
Filing online is a convenient option available not only for annual reports, but also for many other documents that are required for opening or maintaining local LLCs. Visit the Maryland Business Express page and follow the prompts to create an account.
From there, the Maryland Business Express system will provide the guidance you need every step of the way. This process can be time-consuming but is otherwise straightforward. Keep in mind that if your annual report is submitted online, it will be posted the next day.
Filing by mail can be an excellent alternative to filing your report online, but this solution isn’t available or ideal for all types of businesses. Several Maryland entities are currently barred from filing annual reports online. These include:
If your organization falls into any of these categories, you may need to file your annual report by mail. The Maryland Business Express website offers a file that you can easily download, print and complete on your own.
Depending on your situation, you may choose to file Form 1 exclusively as an annual report—or together with your personal property tax return.
When submitting by mail, be sure to include a check or money order to cover the filing fee. Address to:
Maryland Dept. of Assessments and Taxation Annual Report
P.O. Box 17052
Baltimore, MD 21297-1052
If you complete an amended report, you’ll need to send the print version to a different address:
Maryland Dept. of Assessments and Taxation Business Services
Unit 301 W. Preston St., Room 808
Baltimore, MD 21201-2395
Depending on where you live, it may be convenient to file your Maryland LLC annual report in person. You’re welcome to stop by the SDAT headquarters. The address for this location is:
State of Maryland – State Center
301 W. Preston St., Room 8
Baltimore, MD 21201
Whether you complete the process online, by mail, or in person, filing on your own can be complicated even under the best of circumstances. Thankfully, there’s no need to go it alone. A compliance service can streamline this process, so you can focus on other matters.
This is a great option if you prefer to focus on the day-to-day concerns of running your business—or if you struggle to keep up with varying requirements for a multistate entity. Either way, a compliance service should save you a lot of time and stress.
No matter how you file or who you turn to for help, it’s critical that you fulfill this obligation on time. Your failure to do so could result in your business being officially declared “not in good standing.”
Not sure whether your business is currently in good standing with the state? Conduct a business entity search on the Maryland Business Express website. Check the General Information and Personal Property areas to determine whether your annual report has been received and accepted.
Typically, SDAT has enforced annual report requirements by assessing fees for late submission. The total for these fees depends largely on how late these reports are filed. It’s not uncommon for businesses to pay hundreds of dollars if their reports are several weeks or months late. The maximum is always $500.
On the other end of the spectrum, the minimums are as follows:
In many situations, the base penalty will be calculated at 1/10 of 1% of the county’s assessment. Beyond this, interest will accrue at a rate of 2% of the original penalty level. This applies for every 30-day period.
In some situations, penalties may be referred to the Central Collection Unit of Maryland. Once your case has reached this point, you will no longer be able to pay fines via the SDAT.
Easily the harshest consequence of failing to file, forfeiture is possible if you continue to ignore your obligations even after you’ve been contacted by the SDAT or the CCU. Forfeiture means that your LLC no longer has the right to conduct business in the state of Maryland, nor will you be allowed to use your entity’s selected name.
It takes a lot for the state to proceed with forfeiture. Typically, this solution is only pursued after a business has remained classified as “not in good standing” for a long time, although the state doesn’t strictly define how long this period lasts.
Given the harsh realities of forfeiture, it’s in your best interest to avoid it at all costs. This is simple: File your annual report on time or get a service to take over—and if you realize you’re late, respond quickly with the proper documentation and assessed fees.
The annual report is one of the most predictable and important parts of doing business in the state of Maryland. This document verifies the status of your LLC, including everything from your primary business address to the contact information for your resident agent.
If you’re thorough with your Maryland annual report and submit it on time, you shouldn’t run into trouble with the State Department of Assessments and Taxation. A little due diligence can go a long way but remember: Experts are happy to handle this process if you’re not up to the task.
This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness.
Shai Shmarel started his life as a corporate lawyer before switching to being an SEO and Content Manager at Tailor Brands. He has experience in managing companies, rankings SERPs and covering a content-driven approach for all things legal, business and marketing. When off work, you’ll usually find him chilling with a cup of coffee and a book in the desert.