Maryland Foreign Registration / The penalty

What an unregistered foreign LLC faces in Maryland

Maryland imposes a $200 civil penalty on a foreign LLC that does business in the State without registering, bars it from suing in Maryland courts until it fixes the problem, and makes members and agents who transact the business guilty of a misdemeanor with a fine up to $1,000. The penalty is charged once, not by the day.

Consequences at a glance

Consequence	What the statute says
Civil penalty	$200, imposed by SDAT, which may be reduced or abated
Lawsuits	The LLC cannot maintain a suit until it pays and complies, or stops doing business
Contracts	Not invalidated by the failure to register
Defending a suit	Not prevented
Members and agents	Misdemeanor, fine up to $1,000
Attorney General	May bring an action to restrain the business
Service of process	The Department is the LLC's agent for claims from the business

The penalty is a one-time amount

The statute says that if a foreign LLC does intrastate, interstate or foreign business without registering, SDAT shall impose a penalty of $200. It is not described as running by the day or the month. It can be reduced or abated under the Tax-Property article's rule for late reports.

No suing until it is cured

While the LLC is doing or has done business without registering, neither it nor anyone claiming under it may maintain a suit in a Maryland court. The bar lifts when the LLC shows the court that it has paid the penalty and then either fixed its registration status or ended its Maryland business. For a landlord that wants to evict a tenant or a seller that wants to collect an unpaid invoice, the lock is the real cost of the delay.

What stays intact

The failure to register leaves the LLC's contracts and acts valid, and nothing stops the LLC from answering a case brought against it in a Maryland court. A customer cannot cancel a deal only because the seller was unregistered.

Members and agents

Each member of an unregistered foreign LLC that does business in Maryland, and each agent who transacts the business for it, is guilty of a misdemeanor and on conviction faces a fine of not more than $1,000. The statute puts the exposure on the people, not just the company. It is a criminal provision, so a lawyer should look at any case where it might be asserted.

The Attorney General's power

Maryland's Attorney General is also authorized to sue for an order restraining the business of a foreign LLC that breaks the title.

Service of process reaches you anyway

An LLC that does business here without registering is treated as naming SDAT to receive process on claims from that business. A plaintiff can serve the State, which passes the papers to the address on file, if there is one. An unregistered LLC therefore has less control over where a summons lands, not more.

After registering: the forfeiture risk

The penalty above concerns not registering. A registered LLC that stops filing reports faces a different one. SDAT may forfeit its right to do business if it fails to file a report or pay late filing penalties on time and again within 30 days after a written demand, and unless SDAT excuses a reasonable delay the forfeiture takes effect 15 days after written notice. Once forfeited, the LLC is treated as if it had never qualified, and so the penalty and the suit bar apply again.

What causes forfeiture

SDAT's business FAQ names the main causes: a foreign entity not filing its current-year Form 1, an outstanding late filing penalty that is not paid, and a dishonored check for a filing fee. The cure is to file the delinquent Form 1, pay the penalty or make good the check before the date in the Final Forfeiture Notice. Notices go to the address on file, so a stale address is a real risk.

The late annual report penalty

A late Form 1 draws its own penalty, calculated under the Tax-Property article. The initial penalty is capped at one tenth of one percent of the total county assessment, and may not exceed $500. Its floor is $30 if the report is 1 to 15 days late, $40 if 16 to 30 days late and $50 if more than 30 days late. The Department adds 2 percent of the initial penalty for each 30 days or part of 30 days that the report remains unfiled, and may abate or reduce it for good cause. The annual report page has the filing steps.

Getting back in

An LLC that lost its right to do business applies to regain it with a re-registration, which SDAT lists at $100, with the same speed options. The LLC should file any missed Form 1 first, since an unfiled report is the usual cause. A forfeited LLC that skipped two years of reports would owe $600 in report fees before any late penalty.

Registering late

An LLC that registers late pays the usual $100 and is subject to the $200 penalty. Register first, because the suit bar stays until the LLC complies. If you want help doing it quickly, an expedited or rush speed is available.

Penalty questions

Is the Maryland penalty charged every month?

No. The statute names a single $200 penalty.

Can I still be sued while unregistered?

Yes. The LLC can defend itself, and SDAT receives process for it.

Can the penalty be reduced?

The statute allows it to be reduced or abated under the Tax-Property rule.

Our fee and SDAT's

SDAT's $100 and any speed option you choose are listed on their own lines at checkout. $199 plus the state fee, including your first year of registered agent service; after that the agent service renews at $149 a year.

Register in Maryland

$199

+ $100 SDAT fee

The SDAT registration for a non-Maryland LLC, completed from your answers
Your home-state proof of existence checked before anything is sent
A Maryland resident agent, either ours or the one you name
Submission through Business Express and the SDAT acknowledgment returned to you
Renewal: after the first year, the agent service renews at $149 a year

Sources

Doing business in Maryland?

Give us the home-state details and we prepare the SDAT registration.