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Written by : Elijah Hitchingham
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creating an llc in maryland is pretty straightforward but when you finally get around to fleshing out your operating agreement there are important decisions to make that set the tone of exactly how you will do business and get paid operating agreements are the lifeblood of your business and they may be the most important document that you will create throughout the life of your company with that let's go over a few important things to know before creating your agreement in this video we'll cover a quick overview of llc's and operating agreements laws specific to the state of maryland what to include in your operating agreement and where to find an official template first what is an llc in the united states you can classify your business in a number of ways depending on its characteristics an llc or limited liability company is a form of business with special regulations which include shielding members from certain liabilities which is impossible if the business is a partnership or a sole proprietorship llcs are relatively simple to create and manage and unlike types of corporations taxes pass through the business directly to members which avoids instances of double taxation next let's cover the basis behind operating agreements what is an operating agreement operating agreements layout all of the rules for a business's financial and functional decisions which among many things include work related responsibilities for members as well as how profits are divided the document essentially governs the internal operations of the business and isn't one size fits all so it can be tailored to a company's specific needs once the document is signed it legally binds members to the terms stated in the agreement but why do you need an operating agreement operating agreements are a necessity because other than organizing and defining certain processes they also help solidify and protect a business's limited liability positioning without a formal agreement businesses may seem akin to partnerships or sole proprietorships requirements in maryland in maryland llc operating agreements aren't required to be filed however if members elect to not complete this document they are essentially risking their personal and financial assets in the event that claims against the company result in debts what to include in an operating agreement operating agreements are sometimes 20 pages long and you will want to make sure that every matter concerning your businesses finances and operations are written out and regulated important matters to clearly outline in an operating agreement are division of ownership member authorities labor and responsibilities voting rights and clauses transfer of interest and buyout rules meeting frequency and rules terms for adding new members profit and loss allocations methods and frequency of disbursement and anything else pertaining to the llc's operations after you've finished your operating agreement it is recommended to have an attorney review it to be extra sure that you didn't leave out any critical information mori forms the biggest online database of legal documents access your legally binding templates for llc operating agreements specific to maryland at the link below and don't forget to subscribe for more weekly videos
Thanks for your comment Huey Fedorko, have a nice day.
- Elijah Hitchingham, Staff Member
in today's video we'll be talking about how to start an llc in maryland my name is eric and in this video what i'm going to do is walk you through three methods on how to start an llc the first is going to be using your state website the second is using free tools that you can find online and the third if you need to go this route is hiring an attorney but one of the important things i'll be showing in this video is how you can get a free consultation with an attorney to start just to save yourself some money if you decide to go down that route so some of the things that will be covering this video besides just kind of the basics of setting up an llc are some really important terms and if you're not familiar with these terms it's really important that you watch this video to make sure that you have a legit llc the first term is piercing the corporate veil and the second term is understanding exactly what a registered agent is and now if you're not familiar with these two terms definitely watch the rest of this video because i'm going to get into that in a lot of detail coming up so the first thing i want to talk about is registering with your state website so this link right here this is really important to mention any of the links or resources i mentioned in this video are going to be in the description below so this link will be there as well so the first thing you want to do is actually see if the name you have in mind is available so you can click search for a business so what i did is i kind of searched in maryland here for some different restaurant names and this one i'm not even sure how you say it maybe ekabin but what you can do is i can copy this i can go back here and if i search for this so what you'll find here is that if there is a llc already set up for this you'll see the business name showing up and it'll look something like this so now if you were to search i don't know i'm just going to put in a bunch of letters like this it's impossible that this is actually taken as an llc but you'll see that the business name you entered was not found try searching again so what you'd want to do is once you have your business name actually set up what you'll do is go over here and you can create a count on the right hand side and it's going to walk you through the order process registering your new business managing and filing and any questions that you have going through the state website now this is a really helpful tool i found that their particular website is laid out much better than other states but still there are issues that i find with the service and the main issue i have is as you're going through you know your articles of organization this is for the maryland limited liability company this is the issue i have with a lot of state websites is they kind of gloss over important details and one in particular is number four the registered agent a lot limited liability company in maryland is and their address is now if you go to the second page it'll give you a little bit more information here in section four and it says here the registered agent can be any maryland citizen who is over 18 a maryland corporation or maryland llc this person must also sign the document now the issue i have with this is a lot of people will see that and they'll say cool i'll use my you know sister susie or you know my buddy down the street jim he can sign the document for me and he'll be my registered agent now the problem with that is in the unfortunate case if you're actually sued what's going to happen is the attorney suing you is going to try to find cracks in your llc and i think sometimes it's important to understand exactly what an llc is what it does and what it doesn't do and at this particular point of the video i want to explain that so some people think that an llc has some sort of tax advantage to setting up it does not it's a common misnomer really what an llc does is it limits your liability and what you want to do is you have your business assets you know so that might be your business bank account if you have an office or a restaurant location in the particular example you're using earlier and then you have your personal assets your personal bank account your car your home those things the llc creates a division between these two assets so that in the unfortunate case that you are sued that they can't come after your personal assets as well in addition to your business assets but like i mentioned earlier that attorney what they're trying to do is find a crack in your llc and what the term is called is piercing the corporate veil one way they might do that is if you haven't really dotted all your eyes and crossed your t's and there's a few different ways that they're going to try to find those cracks in your llc one of them might be that maybe you haven't renewed with the state and this is a good example of a registered agent or a resident agent as it's called the maryland so let's say your friend susie down the street she doesn't actually let you know that they've received documentation that you need to renew with the state in maryland and you don't go through that process then what happens is when you're sued that attorney is going to find out that you didn't renew with the state because you didn't have a really legit registered agent on file and they're going to come after you and potentially be able to take your personal assets as well so sometimes people just kind of fill in section 4 here on the resident agent and they kind of just gloss over that but it's really important that that person is doing what they're supposed to be doing for you so this service over here called ink file they have a learning center here and it talks about registered agents and if you go down here and it'll tell you exactly what a registered agent does official letters and correspondence from your secretary of state service of process notices so this is if you're being sued and need to appear in court like i mentioned earlier official federal government correspondence information and notifications tax forms and requests for payment so that could be renewing with the state uh and then request to complete permits company filings or reports so if you're not doing these things and your registered agent isn't letting you know or notifying you that you need to do these things in a timely manner then there might be a crack in your llc and you're really creating a lot of liability for yourself so what i'd like to talk about now is uh free online tools that you can use such as legal zoom or ink file which we were just looking at legalzoom really isn't free because what you'll see here is i've highlighted that they have a 79 plus your filing fee so in every state there's a filing fee and you can't get around it it doesn't matter if you're going through the state website through a tool like legalzoom or through an attorney there's going to be a filing fee so again going back to ink file this is all your state filing fees i got here from clicking this link right here but you'll see in maryland it's 197 so you're going to have to pay 197 dollars to the state
Thanks Cordelia your participation is very much appreciated
- Elijah Hitchingham
About the author
I've studied natural language processing at Shenandoah University in Winchester and I am an expert in nuclear physics. I usually feel happy. My previous job was insurance policy processing clerk I held this position for 17 years, I love talking about flower arranging and harpastum. Huge fan of Marion Cotillard I practice balance beam and collect jersey cards.
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