How to Dissolve an LLC in Maryland: Articles of Cancellation

How to dissolve an LLC in Maryland, step by step

In Maryland the business registry is the State Department of Assessments and Taxation, SDAT, not the Secretary of State. An LLC ends with Articles of Cancellation, which SDAT accepts on paper or online through Maryland Business Express (Maryland SDAT). The Maryland Business Express closing checklist then sends you to the Comptroller, the IRS, local offices and licensing agencies (Maryland Business Express).

The steps common to every state are in how to dissolve an LLC. A Maryland LLC adds a creditor notice by registered mail and a resident agent who stays on for a year.

Filing Maryland Articles of Cancellation: fee, content and timing

The fee section of Maryland's Corporations and Associations Article is unusually clear: there is no processing fee for documents filed to dissolve, cancel, or terminate an entity (Md. Code, Corps. & Ass'ns 1-203). The same section sets a $50 fee for expedited processing.

By statute the Articles of Cancellation give the LLC's name and principal office, a resident agent who will serve for one year after termination, the members designated to wind up, the effective date (no later than 30 days after filing), and a statement that notice of the termination was sent by registered mail, postage prepaid, return receipt requested, to all known creditors, with the mailing date, or that the LLC has no known creditors (Md. Code, Corps. & Ass'ns 4A-909).

The LLC is terminated on the later of SDAT's acceptance and the effective date, but it continues to exist to pay debts, collect and distribute assets and wind up (Md. Code, Corps. & Ass'ns 4A-908). Plan for a wait: SDAT says the turnaround to receive confirmation can take 8 weeks or more (Maryland SDAT).

This guide is general information, not legal or tax advice. Fees and forms change: confirm them with the agency before you file, and ask an attorney or accountant about your situation.

Source: Maryland SDAT: Departmental forms and applications

Closing Maryland Comptroller and unemployment accounts

SDAT records the cancellation, but the Comptroller of Maryland and the Maryland Department of Labor keep their own accounts. Close each one.

• Withholding: complete and send the Maryland Employer Withholding Final Return, Form MW506FR, or call 410-260-7980 (1-800-638-2937 from elsewhere) with the account number, reason and closing date (Maryland Business Express).
• Sales and use tax: complete and send the Sales and Use Tax Final Return, Form 202FR, with the final return, or call the same numbers.
• Unemployment insurance: you can close your unemployment tax account by calling 410-949-0022 from Central Maryland, or 1-800-827-4839 from elsewhere (Comptroller of Maryland).
• Federal: file the final return for the year of closing, check the final K-1 box for a multi-member LLC, and close the EIN by letter (IRS).

Dissolving a Maryland corporation

A Maryland corporation files Articles of Dissolution with SDAT, also free under the fee statute and also available online (Maryland SDAT). Two conditions are stricter than for an LLC. The corporation must be in good standing, meaning all required reports are filed and all fees paid (Maryland Business Express). And if it has known creditors, it may file only after the 19th day following the mailing of notice to them (Md. Code, Corps. & Ass'ns 3-407).

The articles name a resident agent who will serve for one year after dissolution and until the affairs are wound up, and list every director and officer (Md. Code, Corps. & Ass'ns 3-406). Federal corporate steps are in how to dissolve a corporation.

Forfeiture: what happens to a Maryland LLC that stops filing

Maryland's version of administrative dissolution is forfeiture. Each year after September 30, SDAT certifies a list of LLCs that did not file the prior year's annual report, and the Comptroller certifies LLCs with taxes unpaid since the previous October 1 (Md. Code, Corps. & Ass'ns 4A-911). SDAT then proclaims the right to do business in Maryland and the right to use the name forfeited, without any court proceeding.

A forfeited LLC has not wound up, and its Comptroller accounts may still be open. To clean it up, file Articles or a Certificate of Reinstatement, which carries a $100 fee under the fee statute (Md. Code, Corps. & Ass'ns 1-203), then cancel it properly. Because cancellation itself costs nothing, forfeiture saves no money in Maryland.

Withdrawing an out-of-state LLC from Maryland

An LLC formed in another state formally ends its Maryland registration with a Certificate of Cancellation of a Foreign LLC (Maryland Business Express), which can be filed online (Maryland SDAT). A foreign corporation files an Application for Termination. SDAT's forms page does not print a fee for these; confirm before filing. Close the Comptroller and Department of Labor accounts too.

Records to keep after cancelling a Maryland LLC

Keep the creditor notices and their registered-mail receipts with the filed Articles of Cancellation: the articles certify the mailing date, so the receipts are your proof. The IRS asks employers to keep employment tax records for at least 4 years after the tax is due or paid (IRS).

Before cancelling accounting, payroll, CRM and help desk tools, export complete copies; see exporting company records before closing and business records after closing.

The data a Maryland company leaves behind

A Maryland LLC keeps existing after cancellation for one reason: to collect and distribute its assets. Its records can be one of them. AI developers license operating archives, such as support tickets, engineering notes, sales calls and project files, usually de-identified and under a written agreement that limits use. Selling company data after closing covers rights, privacy and timing.

Closing the company? Before you cancel software or delete files, find out whether its records are worth licensing: years of tickets, work orders, email and code can be. Get a free estimate of what your records could be worth.