How to Dissolve an LLC in Maryland: Complete 2026 Guide

How to Form an LLC: Step-by-Step

1. 1

   Vote to Dissolve

   Your operating agreement is the controlling document for how a Maryland LLC decides to wind up. Read its dissolution clause first and follow whatever threshold it sets, whether that is a majority of membership interests or unanimous written consent. If the agreement is silent, or if you never adopted one, collect signed written consent from every member so that no one can dispute the decision later. Record the date of the vote, who participated, and the result in a short written resolution, and set the intended wind up date in the same document. Maryland does not ask you to send the resolution to the state, but the person who signs the cancellation filing is representing that the LLC actually authorised it.

   Pro tip: Decide the intended termination date at the vote, not later. Articles of Cancellation take effect on the filing date or on a stated future date no more than 30 days after filing, so a date chosen in advance is easy to honour and a date chosen after the fact usually is not.
2. 2

   File Articles of Cancellation with Maryland SDAT

   Business entity filings in Maryland go to the State Department of Assessments and Taxation (SDAT), not the Secretary of State. A domestic LLC is terminated by filing Articles of Cancellation, the SDAT form revised March 2025, with the SDAT Charter Legal Department at 700 East Pratt Street, 2nd Floor, Suite 2700, Baltimore, MD 21202. The state filing fee is $0. Standard non-expedited review is stated as 4 to 6 weeks, and SDAT does not publish that figure in business days. Expedited handling costs a separate $50 service fee and is stated as 7 to 10 business days, while same-day rush is $325 online if submitted by 2:30 p.m. or $425 by dropbox or in person. Online filing through Maryland Business Express at https://egov.maryland.gov/businessexpress adds a 3 percent portal convenience fee. The form must name a resident agent who will serve for one year after termination, and that agent has to sign it. Instructions and the form itself are at https://dat.maryland.gov/sdat%20forms/llc-cancel.pdf.

   Pro tip: The $0 fee applies to standard review only. If you pay $50 for expedited service you are buying speed, not a different filing, so treat that as a scheduling decision rather than a cost of dissolving.
3. 3

   Notify Creditors and Settle Debts

   Maryland's Articles of Cancellation force this question at the top of the form. You must check either that the LLC has no known creditors, or state the date on which notice of termination was sent to all creditors by registered mail. If you take the second path, that notice date must be at least 19 days before the date you file. This is a wait before you may file, not a deadline for creditors to submit claims. Notice goes out first, 19 days pass, and only then will SDAT accept the cancellation. Giving the notice is mandatory whenever the LLC has known creditors, so build the wait into your calendar rather than discovering it at the filing window. Use the wait productively by paying or settling supplier invoices, loans, leases and any employee wages, and keep the registered mail receipts, since the date on them is the date you will write on the form.

   Pro tip: Send every creditor notice on the same day. The 19 day clock is measured from the notice date you certify, so a straggler mailed a week later quietly pushes your earliest filing date a week out.
4. 4

   Close Maryland State Tax Accounts

   Maryland's state tax authority is the Comptroller of Maryland, and closing your accounts there is a separate exercise from the cancellation filing. File final Maryland returns for every tax type the LLC was registered for, including income tax, sales and use tax if you collected it, and withholding if you had employees, and mark each one as a final return. Pay any balance due rather than assuming it will be netted out later. Maryland does not require a tax clearance certificate to cancel an LLC. No tax clearance statement appears anywhere on the LLC Articles of Cancellation form, so do not treat a clearance letter as a precondition of filing and do not let a vendor sell you one. Filing your final returns and formally closing each account is still the right thing to do, because an open account keeps generating filing obligations after the entity is gone.

   Pro tip: Close the withholding account last, after the final W-2s are issued. Closing it early can leave you unable to file the very return that account exists to receive.
5. 5

   Deactivate Your EIN with the IRS

   The IRS cannot cancel an EIN, but it can deactivate it once any outstanding returns are filed and taxes owed are paid. See the FAQ below for the letter and mailing addresses. Before or alongside the deactivation letter, file your final federal return: Form 1065 for a multi member LLC, Form 1120-S if you elected S corporation treatment or Form 1120 if you elected C corporation treatment, each with the final return box checked, or the owner's return (Schedule C for most business activity) for a single member LLC that never made an election. If you had employees, file the final employment tax returns and issue W-2s for the year.

   Pro tip: Send the deactivation letter by certified mail and keep the receipt and your copy of the letter.
6. 6

   Distribute Remaining Assets to Members

   Assets come out in order, and members are last. Pay or make adequate provision for creditors first, including the ones you notified by registered mail, then return member capital contributions, then split anything left over according to the sharing ratios in your operating agreement. If the agreement does not address a final distribution, members typically take the remainder in proportion to their ownership percentages, but write down the method you used and have every member sign off on it. Distributing to yourself while a supplier invoice or a disputed claim is still outstanding is the single most common way an owner turns a clean wind up into a personal problem. If the LLC cannot cover everything it owes, stop and get advice before moving any money.

   Pro tip: Hold back a reserve for the final tax preparation bill and any late invoice. It is far easier to make one small extra distribution later than to ask three members to send money back.
7. 7

   Confirm Dissolution is Complete

   Cancellation is effective on the date SDAT accepts the filing, or on the future date you specified if it is no more than 30 days after filing. Confirm the outcome by checking your entity's status in Maryland's business entity records maintained by SDAT rather than assuming the mail went through, and save whatever acknowledgement SDAT returns. Keep a permanent file containing the accepted Articles of Cancellation, the dissolution resolution, the registered mail receipts and dates for your creditor notices, the final federal and Maryland returns, and the schedule showing what each member received. Note that the resident agent named on the form is committed to serve for one year after termination, so make sure that person knows the address where anything arriving in that year should be forwarded.

   Pro tip: Diary the one year resident agent window the day your cancellation is accepted. Service of process delivered to an agent who has stopped paying attention is still service.

Winding-Up Checklist

• Cancel all Maryland business licenses and permits

  Every license and local permit the LLC holds is issued by the agency that granted it, and cancelling the entity with SDAT does not touch any of them. Contact each issuer directly and get the cancellation in writing so renewal notices and fees stop.

• Close business bank accounts

  Close accounts only after the final distributions clear and the last cheque has settled, since a closed account cannot receive a refund. Ask the bank for closing statements and keep them with your dissolution file.

• Cancel business insurance policies

  Give your carriers the termination date in writing and ask about unearned premium refunds on general liability, property and workers' compensation cover. Consider keeping any claims made policy running or buying tail cover if the LLC did work that could generate a claim later.

• Notify vendors, suppliers, and customers in writing

  This is separate from the registered mail creditor notice that starts the 19 day clock, and it is about goodwill and clean books rather than compliance. Give a final transaction date, a settlement contact, and an address for anything that arrives after you close.

• File final payroll tax returns and W-2s (if you had employees)

  Issue final paycheques, file the closing federal employment tax returns, and send W-2s for the year, then file the final Maryland withholding returns with the Comptroller of Maryland. Do this before you close the withholding account, not after.

• Retain business records per Maryland retention requirements

  Our verified Maryland data does not set a retention period for a cancelled LLC's records, so default to your tax and claim exposure instead of a number someone quoted you. Keep the accepted Articles of Cancellation, creditor notice receipts, final returns and distribution schedules until every open tax year and claim window has run.