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Maryland LLC

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LLC Sample Operating Agreement

MD-00LLC-1

LLC SAMPLE OPERATING AGREEMENT

This agreement is a sample operating agreement and should be modified to meet your needs. It provides for the LLC to be operated by one or more managers OR by the members. You will have to decide how you want your LLC to operate.

Read carefully and make appropriate changes to suit your individual needs and purposes.

OPERATING AGREEMENT

OF

A MARYLAND LIMITED LIABILITY COMPANY

THIS OPERATING AGREEMENT ("Agreement") is entered into the day of 20 , by and between the following persons:

1.

2.

3.

4.

ARTICLE I

FORMATION OF LIMITED LIABILITY COMPANY

1. Formation of LLC. The Parties have formed a Maryland limited liability company named ("LLC").

2. Articles or Organization. The Members acting through one of its Members, filed Articles of Organization on , thereby creating the LLC.

3. Purpose. The purpose of the LLC is to engage in any and all lawful business activity in the State of Maryland and elsewhere.

4. Registered Office and Registered Agent. The registered office and place of business of the LLC shall be and the registered agent at such office shall be

5. Duration. The LLC will commence business as of the date the Members contribute their capital investment in the LLC and will continue in perpetuity.

6. Fiscal Year. The LLC's fiscal and tax year shall end December 31.

ARTICLE II

MEMBERS

7. Initial Members. The initial members of the LLC, their initial capital contributions, and their percentage interest in the LLC are:

Initial Members Percentage Interest in LLC Capital Contribution

8. New Members. New members may be admitted only upon the consent of a majority of the Members and upon compliance with the provisions of this agreement.

ARTICLE III

MANAGEMENT

9. Management. The Members have elected to manage the LLC as follows:

The management of the LLC shall be vested in the Members without an appointed manager.

The Members hereby delegate the management of the LLC to Manager(s), subject to the limitations set out in this agreement.

a) The Members shall elect and may remove the Manager(s) by majority vote.

b) A Manager shall serve until a successor is elected by the Members.

c) The Manager(s) shall have the authority to take all necessary and proper actions in order to conduct the business of the LLC.

d) Except for decisions concerning distributions, any Manager can take any appropriate action on behalf of the LLC.

e) In determining the timing and total amount of distributions to the Members, the action of the Manager shall be based on a majority vote of the Managers.

f) The compensation to the Manager(s) shall be in the discretion of the majority of the Members of the LLC.

g) There shall be initial Managers.

h) The initial Managers are:

10. Officers and Relating Provisions. In the event the Members elect to manage the LLC, rather than appointing a manager, the Members shall appoint officers for the LLC.

11. Member Only Powers. Only a majority of the Members may: (a) sell or encumber any real estate owned by the LLC, or (b) incur debt, expend funds, or otherwise obligate the LLC if the debt, expenditure, or other obligation exceeds .

ARTICLE IV

CONTRIBUTIONS, PROFITS, LOSSES, AND DISTRIBUTIONS

12. Interest of Members. Each Member shall own a percentage interest in the LLC.

13. Contributions. The initial contributions and initial percentage interest of the Members are as set out in this Agreement.

14. Additional Contributions. Only a majority of the Members of the LLC may call on the Members to make additional cash contributions.

15. Record of Contributions/Percentage Interests. This Agreement and all Resolutions of the Members shall constitute the record of the Members and their respective interests.

16. Profits and Losses. The profits and losses and all other tax attributes of the LLC shall be allocated among the Members on the basis of their percentage interests.

17. Distributions. Distributions of cash or other assets shall be made as determined by a majority of the Members.

18. Change in Interests. If during any year there is a change in a Member's percentage interest, the Member's share shall be determined accordingly.

ARTICLE V

VOTING; CONSENT TO ACTION

19. Voting by Members. Members shall be entitled to vote on all matters in accordance with each Member’s percentage interest.

20. Majority Required. Except as otherwise required, a majority of the Members is required for any action.

21. Meetings - Written Consent. Action of the Members may be accomplished with or without a meeting.

22. Meetings. Meetings of the Members may be called by any Member owning 10% or more of the LLC.

23. Majority Defined. The term “Majority” shall mean a majority of the ownership interest of the LLC.

ARTICLE VI

DUTIES AND LIMITATION OF LIABILITY MEMBERS, OFFICERS AND PERSONS SERVING ON ADVISORY COMMITTEES; INDEMNIFICATION

24. Duties of Members: Limitation of Liability. The Members, Managers and officers shall perform their duties in good faith.

25. Members Have No Exclusive Duty to LLC. The Members shall not be required to participate in the LLC as their sole and exclusive business.

26. Protection of Members and Officers.

(a) As used herein, the term “Protected Party” refers to the Members and officers of the Company.

(b) To the extent that a Protected Party has duties and liabilities, a Protected Party acting under this Agreement shall not be liable for good faith reliance on the provisions of this Agreement, the records of the LLC, or expert information.

(c) The provisions of this Agreement, to the extent they restrict duties and liabilities, replace such other duties and liabilities.

(d) Whenever this Agreement permits or requires a Protected Party to make a decision in its “discretion,” the Protected Party may consider only such interests and factors as it desires.

(e) Whenever this Agreement permits or requires a Protected Party to make a decision using a “good faith” standard, the Protected Party shall act under such express standard.

27. Indemnification and Insurance.

(a) Right to Indemnification.

(i) Any person who is or was a member or officer of the LLC and acted in good faith shall be indemnified and held harmless by the LLC.

(ii) Any person who is or was a member or officer and acted in good faith in a criminal action shall be indemnified and held harmless by the LLC.

(b) Advancement of Expenses.

(c) Non-Exclusivity of Rights.

(d) Insurance.

(e) Effect of Amendment.

28. Duties of Persons Serving on Advisory Committees; Limitation of Liability; Indemnification. The Members shall have the right to form advisory committees.

ARTICLE VII

MEMBERS INTEREST TERMINATED

29. Termination of Membership. A Member's interest in the LLC shall cease upon the occurrence of one or more of the following events:

(a) Notice of withdrawal to the LLC thirty (30) days in advance.

(b) Assignment of all interest to a third party.

(c) Death of a Member.

(d) Court order adjudicating the Member incompetent.

(e) Distribution by the fiduciary of the estate's entire interest in the LLC.

(f) Bankruptcy or other insolvency-related events.

(g) If within one hundred twenty (120) days after commencement of action the matter is not dismissed.

(h) If within ninety (90) days after appointment of a trustee, receiver, or liquidator, the appointment is not vacated.

30. Effect of Dissociation. Any dissociated Member shall not be entitled to receive the fair value of his LLC interest solely by virtue of dissociation.

ARTICLE VIII

RESTRICTIONS ON TRANSFERABILITY OF LLC INTEREST; SET PRICE FOR LLC INTEREST

31. LLC Interest. The LLC interest is personal property.

32. Encumbrance. A Member can encumber his LLC interest only with the consent of a majority of the other Members.

33. Sale of Interest. A Member can sell his LLC interest only as follows:

(a) Written notice to the LLC and first offer to the LLC. Purchase price exceeds if paid over installments.

(b) To the extent the LLC does not buy the offered interest, the other Members shall have the option to buy the offered interest at the Set Price on a pro rata basis.

(c) To the extent the LLC or the Members do not buy the offered interest, the selling Member can then assign the interest to a non-member.

(d) A non-member purchaser may not exercise rights of a Member unless a majority of the non-selling Members consent.

34. Set Price. The initial Set Price shall be adjusted no later than .

35. When a member dies or becomes disqualified, that member's interest may be transferred as set out above.

ARTICLE IX

OBLIGATION TO SELL ON A DISSOCIATION EVENT CONCERNING A MEMBER

36. Dissociation. Upon the occurrence of a dissociation event, the LLC and the remaining Members shall have the option to purchase the dissociated Member's interest at the Set Price.

ARTICLE X

DISSOLUTION

37. Termination of LLC. The LLC will be dissolved only upon the written consent of a majority of the Members.

38. Final Distributions. Upon winding up, assets must be distributed to creditors, then to Members in satisfaction of liabilities, then according to LLC interests.

ARTICLE XI

TAX MATTERS

39. Capital Accounts. Capital accounts shall be maintained consistent with Internal Revenue Code § 704.

40. Tax Matters Partner. The Members hereby designate as the "tax matters partner".

41. Partnership Election. The Members elect that the LLC be taxed as a partnership and not as an association taxable as a corporation.

ARTICLE XII

RECORDS AND INFORMATION

42. Records and Inspection. The LLC shall maintain its records at its place of business and allow inspection by any Member.

43. Obtaining Additional Information. Each Member may obtain information regarding the affairs of the LLC as reasonable.

ARTICLE XIII

MISCELLANEOUS PROVISIONS

44. Amendment. Except as otherwise provided, any amendment to this Agreement may be proposed by a Member.

45. Applicable Law. This Agreement shall be governed by the laws of the State of Maryland.

46. Pronouns, Etc. References to a Member or Manager shall include masculine, feminine, singular, plural, individuals, partnerships or corporations.

47. Counterparts. This instrument may be executed in any number of counterparts.

48. Specific Performance. The nonbreaching Members shall be entitled to injunctive relief to prevent breaches of this Agreement.

49. Further Action. Each Member agrees to perform all further acts and execute documents necessary to carry out the provisions of this Agreement.

50. Method of Notices. All written notices required or permitted by this Agreement shall be hand delivered or sent by registered or certified mail.

51. Facsimiles. Any copy, facsimile or other reliable reproduction may be used in lieu of the original writing or signature.

52. Computation of Time. In computing any period of time, the day of the act, event or default shall not be included.

WHEREFORE, the Parties have executed this Agreement on the dates stated below their signatures on the attached signature page for each individual Party.

NOTICE: EACH MEMBER HEREBY CERTIFIES THAT HE OR SHE HAS RECEIVED A COPY OF THIS OPERATING AGREEMENT AND FORMATION DOCUMENT OF , A MARYLAND LIMITED LIABILITY COMPANY.

Members:

Name:

Print Name of Member:

Address:

City, State, Zip:

Phone:

Name:

Print Name of Member:

Address:

City, State, Zip:

Phone:

Name:

Print Name of Member:

Address:

City, State, Zip:

Phone:

Name:

Print Name of Member:

Address:

City, State, Zip:

Phone:

INDIVIDUAL ACCEPTANCE AND SIGNATURE PAGE

I, , hereby certify that I have received a copy of the Limited Liability Company Agreement and Articles of Organization of , a Maryland limited liability company.

Member:

Address:

Date:

I, , hereby certify that I have received a copy of the Limited Liability Company Agreement and Articles of Organization of , a Maryland limited liability company.

Member:

Address:

Date:

I, , hereby certify that I have received a copy of the Limited Liability Company Agreement and Articles of Organization of , a Maryland limited liability company.

Member:

Address:

Date:

I, , hereby certify that I have received a copy of the Limited Liability Company Agreement and Articles of Organization of , a Maryland limited liability company.

Member:

Address:

Date:

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What a Maryland LLC Is and how it’s created

Maryland LLC defines a limited liability company formed under Maryland law to separate business liabilities from owners. Forming a Maryland LLC requires filing Articles of Organization with the Maryland Department of Assessments and Taxation, designating a resident agent, and complying with state registration rules and tax registrations. An operating agreement governs internal management and member rights though it is not filed with the state. Electronic signatures and online filing are commonly used for formation documents and can be valid under federal ESIGN and state electronic records laws when the transaction meets legal requirements.

Why entrepreneurs choose a Maryland LLC

Forming a Maryland LLC separates personal liability from business debts, offers flexible tax classification, and creates a formal structure for members. It also provides state-level recognition for contracts and permits, while permitting electronic execution of formation documents when ESIGN and state rules are satisfied.

Why entrepreneurs choose a Maryland LLC

Who commonly forms or manages Maryland LLCs

Business owners, entrepreneurs, accountants, and attorneys use Maryland LLC formation documents to establish liability protection and manage governance remotely.

  • Small business owners who want limited liability and flexible tax options.
  • Real estate investors forming property-holding LLCs for asset protection and tax planning.
  • Professional service firms and startups seeking formal governance and investor clarity.

Use of electronic signatures can shorten execution time, but confirm consumer disclosure and authentication requirements for regulated matters.

Representative signers and administrators

Tim Martin, Founder

As founder of Martin Properties, Tim Martin manages formation and execution of entity documents, often handling signatures across devices. He relies on secure, auditable signing workflows to close property transactions and maintain clear records without requiring in-person signatures.

Brian Fitzgibbons, COO

As COO of Optica Ventures LLC, Brian Fitzgibbons oversees operational workflows including document execution. He prioritizes straightforward interfaces and reliable audit trails so investors and partners can sign formation and governance documents with confidence.

Core components included in Maryland LLC paperwork

A complete Maryland LLC filing package includes the Articles of Organization, registered agent details, operating agreement, tax registrations, and supporting signature and identity evidence.

Articles

Contain the LLC name, purpose (often general), principal office address, and organizer information; filed with Maryland SDAT to create the legal entity and provide the public record of formation.

Registered Agent

A resident agent with a Maryland street address accepts official service of process; the filing must include agent name and physical address, not solely a P.O. box.

Operating Agreement

Internal contract among members describing governance, capital contributions, profit allocation, voting rights, and procedures for admission or withdrawal of members; not filed but critical to enforce rights.

Member Details

Provide member names, ownership percentages, and contact information in internal records to support tax reporting, banking authorizations, and notice service; accuracy prevents transfer disputes.

Tax Filings

Obtain an EIN from the IRS, select federal tax classification (sole proprietorship, partnership, or corporation), and register with Maryland tax agencies for withholding and sales tax as applicable.

Signatures

All organizing parties or authorized representatives must sign formation documents; electronic signatures are allowed when they meet ESIGN/UETA requirements for intent, consent, attribution, and retention.

Step-by-step: forming a Maryland LLC

Follow these sequential steps to form a Maryland LLC, from name clearance to filing and tax registration.

  • 01
    Choose a name: Confirm availability with Maryland SDAT online.
  • 02
    Appoint registered agent: Record resident agent name and physical address.
  • 03
    File Articles: Submit Articles of Organization to Maryland SDAT.
  • 04
    Get EIN & register: Apply for EIN and register for Maryland taxes.

Configure an electronic workflow for formation documents

Configure an electronic workflow for Maryland LLC documents: authentication, field validation, reminders, and archiving for compliance.

Field Configuration
Authentication Method Email link plus optional SMS code or KBA
Signature Type Electronic signature with audit trail and timestamps
Field Validation Enforce address format, MM/DD/YYYY date checks
Retention Setting Export PDF/A with audit trail and secure storage

Digital filing and signing workflow overview

A typical e‑filing and signing workflow moves documents from upload through signer authentication and final archival with an audit trail.

  • Upload: Upload Articles and attachments as PDF or DOCX.
  • Prepare: Place signature, initials, and date fields for signers.
  • Send: Distribute via secure email link or direct invite.
  • Complete: Signer authenticates, signs, and receives final PDF copy.

Platform and format requirements for e‑signing

Use platforms that support PDF, DOCX, and audit trails, plus integrations for filings and secure storage.

  • File formats: PDF, DOCX, HTML supported
  • Integrations: NetSuite, Salesforce, Google Workspace
  • Authentication: Email, SMS code, SSO options

Typical eSignature vendor pricing and feature snapshot

Compare common pricing and features for eSignature vendors to assess cost and compliance needs for Maryland LLC workflows.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies by vendor and plan Varies by vendor and plan Varies by vendor and plan Varies by vendor and plan
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No cap 100 envelopes/user/year Varies by plan Varies by plan Varies by plan

Security and compliance features to verify

In transit: TLS 1.2/1.3 encryption
At rest: AES-256 encryption at rest
SOC 2: SOC 2 Type II certified
HIPAA: HIPAA compliant; BAA available
21 CFR: 21 CFR Part 11 compliance supported
ISO: ISO 27001 certified

Penalties and risks when formation or reporting is incorrect

Incorrect TIN: Triggers backup withholding 24%
Late 1099s: Penalties $60–$330 per form (IRC §6721)
Intentional Disregard: $660+ per form, no maximum
I-9 Violations: Penalties $281–$2,789 per violation
Publication Failure: May incur state fines or compliance issues
Missing Agent: Service defaults and potential default judgment

Common preparation mistakes to avoid

  • Choosing a name without checking Maryland SDAT availability can force re-filing and delay formation by weeks if the name is reserved or rejected.
  • Listing an out-of-state or P.O. box address for the registered agent instead of a Maryland physical address can invalidate service and cause compliance problems.
  • Failing to prepare an operating agreement leaves internal governance ambiguous, increasing the risk of disputes over capital contributions and member voting rights.
  • Using inconsistent member names or incorrect taxpayer identification on forms causes banking holds, backup withholding, or incorrect tax reporting to the IRS.

Practical tips for accurate and efficient formation

Follow these practices to reduce rework and ensure your Maryland LLC is ready for banking, contracting, and tax compliance.

Verify name and reserved words
Check name availability on Maryland SDAT before finalizing. Avoid restricted words that may require licensed individual or additional documentation, and reserve the name if formation will be delayed.
Use a reliable resident agent
Designate a registered agent with a physical Maryland address who reliably accepts service of process and official mail; consider a commercial agent if privacy or availability is a concern.
Document internal rules
Draft a clear operating agreement that addresses capital contributions, profit allocations, decision-making, transfer restrictions, and exit procedures to reduce future disputes and clarify tax treatment.
Standardize signatures and IDs
Collect government ID and matching printed names for organizers and members. Use consistent formats for dates and addresses to meet bank KYC and avoid notarization or re-signing needs.

Key federal and reporting deadlines to keep in mind

Timing matters for tax registrations and information returns; align entity formation with payroll, vendor payments, and reporting cycles.

EIN timing:

Obtain EIN before hiring employees or opening business bank accounts.

1099-NEC:

Issue to recipients and IRS by January 31 each year.

Form 1040:

Individual returns due April 15 (extensions to Oct 15 with Form 4868).

W-9 requests:

Provide W-9 when requested to avoid backup withholding.

Annual filings:

Check Maryland for any required annual reports or personal property returns.

Sequential milestones from filing to active operations

Track these milestones in order so filings, tax registrations, and bank onboarding proceed without avoidable delays.

01

Name reservation

Confirm and reserve the LLC name before filing if needed.

02

Articles filed

File Articles of Organization with Maryland SDAT to create the entity.

03

Tax registrations

Obtain EIN and register for state withholding or sales tax as applicable.

04

Operating agreement

Execute an operating agreement and retain signed originals for records.

Real-world examples of using eSign for entity documents

Organizations use digital signing to speed formation, reduce in-person steps, and maintain auditable records for compliance and banking.

Martin Properties

Martin Properties streamlined entity formation and lease signing by sending formation documents electronically to founders and partners.

  • Saved travel and in-person delays.
  • "I can process and execute all of these documents online with 100% compliance and built-in security. Whether on mobile or working offline, I can get forms back to their necessary parties efficiently."

Optica Ventures LLC

A venture operations team standardized execution of subscription and formation documents with online signing to improve turnaround.

  • Achieved faster customer completion rates.
  • "The interface is simple and easy-to-use for our team; more importantly, it is just as easy for our customers."

Frequently asked questions about Maryland LLC formation and eSign

Answers to common formation and eSignature questions when preparing Maryland LLC documents and using electronic workflows.


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