Maryland Limited Partnership FAQ

Where do Maryland LP filings go?

To the State Department of Assessments and Taxation, SDAT, through the Maryland Business Express portal. Maryland has no Secretary of State business-filing function — SDAT handles the entire job of registering and maintaining business entities. This surprises almost every first-time filer, so it is the first thing to internalize.

What creates the limited partnership?

The Certificate of Limited Partnership, filed with and accepted by SDAT. This is the LP's formation document, analogous to an LLC's articles of organization or a corporation's articles of incorporation. Until SDAT accepts it, you do not have a limited partnership.

What must the certificate contain?

The partnership's name (with an LP designator), its Maryland principal office address, the name and Maryland street address of the resident agent, and the name and business address of each general partner. It is signed by a general partner. Limited partners are not named in the public certificate.

Can non-residents form a Maryland LP?

Yes. There is no residency requirement for general or limited partners. The only Maryland-presence requirement is the resident agent, who must have a physical Maryland street address. A commercial resident agent service handles this without any partner living in the state.

What is the difference between the two partner types?

A general partner manages the business and is personally liable for the partnership's debts. A limited partner invests capital, shares in profits and losses, and — as long as they stay passive — is liable only up to their investment. A Maryland LP requires at least one of each.

How does a limited partner keep the liability shield?

By staying out of management. A limited partner who takes control of the business can, in some circumstances, be treated as a general partner toward third parties who reasonably relied on their apparent authority. Maryland's statute lists "safe harbor" activities a limited partner can do without crossing the line — voting on fundamental matters, consulting with general partners, acting as a contractor or agent — but the cleanest posture is genuine passivity.

How do LPs limit the general partner's exposure?

A common structure makes the general partner an LLC or corporation rather than an individual, so the unlimited liability attaches to an entity instead of a person. This is a deliberate design choice, usually made with an attorney, and it is one reason LPs are popular for real estate and investment deals.

Are LPs and LLPs the same thing?

No. A limited partnership (LP) has general partners with unlimited liability and passive limited partners. A limited liability partnership (LLP) is a different structure — typically a general partnership where all partners get liability protection, often used by professional firms. The formation documents and rules differ. This page is about the LP.

How is a Maryland LP taxed federally?

By default, a limited partnership is a pass-through entity. The partnership itself does not pay federal income tax; instead it files an information return, Form 1065, and issues a Schedule K-1 to each partner reporting their share of income, deductions, and credits. Partners report those amounts on their own returns.

Does the LP need an EIN?

Yes, always. A limited partnership has at least two partners and files a partnership return, which requires an Employer Identification Number. The IRS issues an EIN for free, and you can get one online in about ten minutes. You also need it to open a partnership bank account.

What about Maryland state tax?

Maryland taxes the partners on their shares of partnership income through their individual returns, consistent with the pass-through model. The partnership may have Maryland filing obligations of its own, and if it has nonresident partners there can be withholding considerations. Tax specifics belong with a CPA — we do not provide tax advice.

What is the annual requirement?

Every Maryland LP files an Annual Report and Personal Property Return with SDAT, due April 15 each year. This is a fixed calendar deadline, not tied to your formation date. The filing keeps the partnership in good standing, and if the LP owns business personal property in Maryland, the return reports it for assessment.

What happens if I miss April 15?

Late or missed filings put the partnership at risk of losing good standing and, eventually, forfeiture of the right to do business in Maryland. Reinstating a forfeited entity is more disruptive and costly than filing on time. Treat April 15 as a hard date.

Do I have to keep my resident agent current?

Yes. If the resident agent moves, resigns, or you switch providers, file the change with SDAT promptly. An invalid resident agent leaves the partnership out of compliance even if the annual report is current — and it risks a missed lawsuit turning into a default judgment against the general partner personally.

How do I change the resident agent?

File a resident agent change with SDAT naming the new agent, their Maryland street address, and confirming their consent. It must be authorized by a general partner. Confirm the change through the SDAT entity search before assuming it took effect.

My LP was formed in another state — do I need to register?

If it transacts business in Maryland, yes. You register as a foreign LP with SDAT and appoint a Maryland resident agent. Operating first and registering later can trigger a statutory penalty, and an unregistered foreign LP generally cannot sue in Maryland courts until it qualifies.

How do I close a Maryland LP?

You wind up the partnership's affairs — settling debts, distributing remaining assets to partners per the agreement — and file a Certificate of Cancellation with SDAT to formally end the LP. Filing the annual report obligations should be current through the dissolution, and you should notify the IRS and close accounts.