Here is How to Start A Profitable Business in Maryland
The Name Game
The Maryland Secretary of State’s office regulates that each corporation formed in the state contain the word Corporation, Incorporated or Limited. Abbreviations of the words may also be used. The name chosen must be noticeably different from other entities on record. Name availability may be checked on the business name database.
Once you have determined that your name is available, you can either proceed to filing the organizational paperwork, or file a Name Reservation form with the Secretary of States office. This form allows the name to be held for 120 days and must be filed by mail with a $25 filing fee.
Organizing the Corporation
The legal beginning of the corporation happens when the Articles of Incorporation are filed. The articles detail the name, address and purpose of the corporation, as well as a name and address of a registered agent, and information on shares that the corporation will be authorized to issue. There is a $120 filing fee, and the articles must be sent through the mail. If you would like to receive the document back after processing, there will be another $5 fee. If this is not paid, the document will be destroyed after processing.
Every year, each corporation doing business in Maryland must submit a Personal Property Return to the Department of Assessments and Taxation. Failure to do so will result in losing your right to conduct business in the state. The filing fee is $300 and the report is due by April 15.
Each corporation will need to obtain an Employer Identification number (EIN) from the IRS. This is issued for federal tax purposes and is free to file.
If you elect to be an S-Corp for tax purposes, you will also need to file Form 2553: Election by a Small Business Corporation. This form should be signed by each shareholder and filed within 2.5 months of the corporations’ first tax year.
Once your S-corp is set up, remember to get a business license in the city you are operating. Most cities pull data from newly-registered businesses in the state so they can track down who in their city should have a license. While you can wait for your city to come knocking if you are on a tight budget (and many will simply give you a deadline to get a license), some municipalities may not be so friendly about it.