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Most people that form a Delaware LLC do not actually operate their company in Delaware. They simply form the business in Delaware in order to take advantage of the state's strong corporate law structure.
There are many advantages to forming a company in Delaware, even if you operate it in another state, such as Maryland.
Maryland, like many other states, has an application process and a state fee for Delaware companies that operate there. The process in which a Delaware LLC registers in Maryland is called Foreign Qualification.
If you want to your Delaware LLC to do business in Maryland, your LLC will be domestic to Delaware and foreign to Maryland, so Foreign Qualification is the process by which Maryland grants your company permission to operate in that state with a Delaware LLC.
In addition to the Maryland Foreign Limited Liability Company Registration form, Maryland also requires you to provide it with a Certificate of Good Standing from Delaware. The agency that accepts this registration is the Maryland State Department of Assessments and Taxation.
A Registered Agent is required to be listed on the registration form. Maryland will send all legal documents and correspondence to your Registered Agent. If you have a physical address in Maryland, you are welcome to act as your own Registered Agent, though you can also retain one in Maryland.
The state of Maryland does not have a requirement to publish your application unless it is specifically required by the county in which your Registered Agent resides.
Normal processing for a Maryland Foreign Qualification application can take eight weeks, plus time for mailing; many people choose to expedite the processing time for an additional fee so they have all the paperwork in hand as soon as possible.
Once your LLC is registered as a foreign entity in Maryland, the state of Maryland will require an annual report. This report is due April 15 of each year, along with a $300 fee, and it must be mailed to the state--it cannot be emailed. The annual report is similar to a tax return and many clients seek the help of a tax professional for assistance.
At your request, we can prepare the registration form for you, obtain the Certificate of Good Standing from Delaware, file everything with Maryland in a timely fashion and pay the state fee for you.
If you take advantage of our service, you will likely receive your approved documents in about 10 business days.
THE AUTHOR OF THIS BLOG ARTICLE IS NOT A LAWYER AND HARVARD BUSINESS SERVICES, INC. IS NOT A LAW FIRM. THE ARTICLE ABOVE IS NOT INTENDED AS LEGAL ADVICE AND SHOULD NOT BE TAKEN AS LEGAL ADVICE. THIS SHORT ARTICLE IS STRICTLY TO MENTION SOME ASPECTS OF DELAWARE’S CORPORATION LAWS AND/OR LAWS RELATING TO OTHER FORMS OF ENTITIES WHICH YOU MAY NOT BE FAMILIAR WITH. WE RECOMMEND THAT YOU CONSULT WITH A LAWYER BEFORE FORMULATING A STRATEGY WHICH WILL BE SUITABLE FOR YOUR SPECIFIC CASE.
There are 3 comments left for Doing Business in Maryland as a Delaware LLCC Kaplan said: Saturday, February 17, 2018
I am an Amazon seller who lives in Maryland but has an LLC in Delaware. Since my business is done online where should I obtain my resale license - MD or DE? I have no warehouse, no inventory in any state. Also, do I need a foreign qualification for MD?HBS Staff replied: Monday, February 19, 2018
Often clients obtain their resale certificate in the state in which they are running the business. For online businesses, this is often the state in which they pay income taxes, open their bank account, and it is typically where they physically are.
Foreign qualification is generally a prerequisite to the resale certificate. We often see our Maryland clients register as a foreign entity in Maryland before obtaining a resale certificate.
Carol Shifflett said: Friday, August 25, 2017
I would like to learn more information on how you can set up the organization for me, the cost for you doing that and what I need to do on my end. Thank you,HBS Staff replied: Monday, August 28, 2017
Here is information about our formation packages. You can find much more information on our website, or feel free to call 302-645-7400 during normal business hours.
Carol Shifflett said: Wednesday, August 23, 2017
I would like to learn more information on how you can set up the organization for me, the cost for you doing that and what I need to do on my end. Thank you,HBS Staff replied: Wednesday, August 23, 2017
Hello. If you are referring to a Delaware LLC, here is the information you've requested.
Feel free to call us during normal business hours or Live Chat with us from our homepage for more information.