Have you decided to stop transacting business with your Maryland limited liability company? The state of Maryland legally requires all business entities to go through a formal dissolution process.
What does this process entail, and how does it differ for domestic and foreign entities? In this guide, we’ll answer all the tough questions about dissolving an LLC in the state of Maryland.
What Does It Mean to Dissolve an LLC?
Dissolving a company is an official means of permanently closing your business. While filing the dissolution documentation with the state of Maryland is certainly an important part of the process, it’s not the only step. You should also liquidate your business assets, settle any liabilities, and send legal notifications to anyone that had an interest in your company.
Keep in mind that if you fail to complete these steps, you as a business owner could be held personally liable for any outstanding debts or liabilities of your limited liability company. Now that we’ve discussed what exactly dissolving an LLC is, let’s dive into the details of how this process is carried out in the state of Maryland.
How to Dissolve a Domestic Maryland LLC
In Maryland, you can dissolve a domestic LLC by filing the Articles of Cancellation with the Maryland State Department of Assessments & Taxation. If you prefer to draft your own Articles of Cancellation, rather than using the standard form provided by the state, you may do so. Either way, you must provide the following information:
- Name of LLC
- Principal office address
- Name of resident agent
- Address of resident agent
- Names and addresses of LLC members designated to wind up the affairs of the company OR names and addresses of all LLC members
- Affirmation that the LLC has no known creditors OR the date the Notice of Termination was sent to all known creditors
- Signature(s) of authorized representative(s)
- Signature of resident agent
- Return mailing address
You can choose to file online, in person, or by mail. If you file in person, you will be required to pay the expedited processing fee of $50, in addition to the base processing fee of $100. However, if you file by mail or online, you simply need to pay $100. If you choose to mail your filing, you should send the Articles of Cancellation and a check to the following address:
Department of Assessments and Taxation
Charter Legal Department
301 W. Preston Street, Rm 801
Baltimore, MD 21201-2392
If you file in person before 4:00 pm, the forms will be processed on the same day. Filing by mail generally takes about four weeks (during busy periods, the state says it could take up to six weeks), although you can also pay for expedited mail processing, which shortens the wait time to about 10 business days.
It is important to note that you will also need to notify your LLC’s creditors (if any) at least 19 days before filing for dissolution.
How to Dissolve a Foreign LLC in Maryland
Do you need to dissolve a limited liability company based outside of Maryland, but qualified to transact business within this state?
In order to dissolve a Foreign LLC in Maryland, you must file the Certificate of Cancellation of a Foreign Limited Liability Company Registration with the Maryland Department of Assessments and Taxation. This form is extremely simple and only requires the following information:
- Name of LLC
- State of organization
- Signature of authorized person
The filing process for foreign LLCs is virtually the same. You can file in person ($100 processing fee, plus $50 for expedited processing), or you can submit your document online or by mail ($100 processing fee, plus optional expedited processing). If you choose to file in person or by mail, all paperwork can be mailed or delivered to the same address:
Department of Assessments and Taxation
Charter Legal Department
301 W. Preston Street, Rm 801
Baltimore, MD 21201-2392
While in-person filings can be processed in a day (if you submit them before 4:00 pm), online or mail filings generally take four weeks, unless you pay for expedited processing, in which case mail or online filings take about 10 business days.
What Else Do I Need to Know About LLC Dissolutions in Maryland?
Domestic LLCs have a brief window to undo a dissolution. To undo a dissolution, you must file the Articles of Continuation before the SDAT has officially terminated your LLC.
In some cases, a foreign or domestic LLC can be administratively dissolved by the state of Maryland. This can happen if your business fails to file its Annual Personal Property Return. This document must be filed every year by April 15th in order to keep your business in good standing with the state. If a year passes and you still have not filed the necessary paperwork, the SDAT will send a Final Forfeiture Notice. Once this happens, you have a set amount of time to submit your documents and pay any penalty fees before the state of Maryland officially dissolves your business.
Once your domestic LLC has been administratively dissolved, you will need to file the Articles of Reinstatement and pay the $100 processing fee (plus any penalty fees) in order to reinstate your business in Maryland. Foreign LLCs must re-register as new businesses after an administrative dissolution.
Conclusion
Whether you’re dissolving a domestic or foreign limited liability company, the process isn’t complicated.
Dissolving an LLC in Maryland does not require a lot of paperwork, but it is relatively expensive compared to most states. Additionally, unless you pay for expedited service, you can expect to wait for up to four weeks (or even longer during busy periods) for the dissolution to be processed.
Our final note in this guide is that you should make certain each step of the process outlined in this guide is followed closely, to avoid any unforeseen snags with your dissolution. We hope this article helped you to better understand the dissolution process for a Maryland LLC!