Registering a New Business in Maryland
Starting a Business in Maryland? Here’s Everything You Need to Know.
Maryland is a bustling and scenic location to visit and settle down. The state offers urban hubs like Baltimore and Annapolis, collegiate towns such as Towson, and quick access to the nation’s capital. This landscape offers the perfect home base for all kinds of businesses. No matter where you choose, we have the resources to register a business in Maryland. So if you’re interested, read on for our clear and simple guide to Registering a Business in Maryland.
Ready to jump-start this process and skip all the reading? Reach out to one of our PRIME advisors for a free consultation!
Forming a Business in Maryland: Five Easy Steps
When it comes to helping you register a new company, this state is ready to help. The “Register Your Business in Maryland Guide” is a comprehensive, state-specific resource for forming your new entity. However, to speed up the process, we have narrowed down the main points into a simple five-step plan.
- Name the business
- Designate a business structure
- Register your business entity with the state
- Register your business for taxes
- Obtain necessary licenses and permits
Step 1: Name the Business
You must choose a name when creating a business entity. You can check to see if your desired name is available through the Maryland LLC name search tool. Additionally, you should complete a Google search to make sure your desired name does not get confused with another business.
Other important factors to consider before starting a business are finding a location and conducting market research. It is important to do research on these topics to make sure you are optimizing foot traffic physically and online. Some good research options are conducting surveys and doing SEO research.
*Note—although the business name is important, it’s ok to pick a name now and decide later that you want to expand to new markets or do business under another name. In that case, you will simply file for a DBA, which allows you to legally operate your business under multiple names. You can check out this article for more information about DBAs, or schedule a consultation with a PRIME advisor for more information.
Step 2: Designate a Business Structure
There are many advantages to registering your business as a legal entity with the state of Maryland. Two of these advantages include personal liability protection and increased credibility in the marketplace.
Some options for registering your business structure in Maryland include a sole proprietorship, a partnership, an LLC, or a corporation. These different setups come with various costs and filing requirements, so it is important to do some research.
If you’ve spent any time exploring the information on our site or had a free consultation with a PRIME advisor, you know we normally recommend registering as an LLC (Limited Liability Corporation). This option offers increased flexibility and asset protection. All Maryland LLCs must hire a registered agent, who must be a resident of the state or serve as a corporation that can conduct business in the state. The typical cost of a registered agent service is between $29 and $300. Additionally, LLCs require the filing of the Articles of Organization.
Maryland Sole Proprietorship
This plan is for people who prefer to operate their business alone. A sole proprietorship is not required to be filed with the state and does not protect personal assets. To operate under a trade name, also known as a DBA or “doing business as” name, you must register with the state for a $25 filing fee.
This business model works for teams of two or more. The business is able to operate under a DBA, there is no asset protection, and profits and losses would appear under your personal finances. Certain partnerships such as limited partnerships, limited liability partnerships, and limited liability limited partnerships are required to file with the state.
It is recommended that partnerships write an outline highlighting each partner’s responsibilities.
A business model of this design is for the purpose of having shareholders. Businesses that plan to “go public” should follow this model. This model requires a registered agent and to get a Certificate of Incorporation.
If you have questions about which business entity structure is right for your Maryland start-up, reach out to one of our advisors for a free consultation!
Step 3: Register Your Business Entity with the State of Maryland
Each business type has different business registration requirements. These guidelines are set by each state. The majority of the time, partnerships and sole proprietorships do not require registration with the state. That being said, it is important to check with your local governments to see if they require registration. In addition, these types of businesses are often not required to file for an EIN.
Although it is not required, there are many benefits of filing as an LLC including separation of personal and business assets, flexible profit distribution, and limited record-keeping requirements.
If you have questions about whether the business entity requires registration is right for your Maryland start-up, reach out to one of our advisors for a free consultation!
Step 4: Register your Business for Taxes
If your business has at least one employee, you are required to have an EIN. This is how entities distinguish themselves for tax reporting.
You must register the entity for employer withholding taxes. Additionally, for entities that sell tangible products, a trader’s license is required to obtain sales and use tax.
Reach out to a PRIME advisor and let us handle the entire process for you! Our experts know all the nuances and regulations involved in setting up businesses in Maryland, and we can make the entire process fast and painless.
Step 5: Obtain Necessary Licenses and Permits
To move forward with the legal entity process, you must comply with the federal, state, and local mandates. Oftentimes, this requires obtaining specific permits and licensing.
Depending on the type of business you are running, you will need to conduct a business license search.
Registering a Business in Maryland—More Resources: