Here are the major internal documents you need to organize for LLCs and corporations: Maryland LLC Operating Agreement Though these documents are internal, you’ll likely need to show them to third parties like the bank or-if you start a nonprofit-the IRS. These are the documents your business will keep on record within your company. Now, it’s time to organize your internal records. So far in this guide, we’ve dealt with public forms that you’ve had to file with the Maryland Department of Assessments and Taxation. This means that the names and addresses you provide will be included on Maryland’s online Business Entity Search, where anyone can find them. Note: The information you list on this form will become part of the public record. You can submit it online, by mail, or in person. Once the form is complete, you’ll need to send it to SDAT. You’ll need to list a Maryland registered agent on the forms who will handle your legal mail. To start a Maryland corporation, file Maryland Articles of Incorporation ($120.To form a Maryland LLC, file Maryland Articles of Organization ($100).This is the step that officially creates your business as a legal entity. When starting a Maryland LLC or corporation, however, you’ll definitely need to file paperwork with SDAT. You will, however, need to file an application to determine if your business requires an SDAT identification number and get a Maryland business license. If you’re a sole proprietor or part of a general partnership, you won’t need to file formation paperwork with the Maryland State Department of Assessments and Taxation, because you’re not creating a separate business entity. As with an LLC, you’ll need to file with SDAT to form a Maryland corporation, but corporations must also pay an additional $20 Organization & Capitalization fee on top of the $100 filing fee. The upside to these formal rules and structures is that investors and donors often consider corporations more accountable-and therefore, safer to invest in-than other business types. Shareholders appoint a board, and the board elects officers who run the corporation. While they provide liability protection like an LLC, corporations are much less flexible-they must follow strict record-keeping rules and have a standardized management structure. To start a Maryland LLC, you’ll need to file Articles of Organization and a $100 fee with Maryland’s State Department of Assessments and Taxation (SDAT). With their adaptability and strong liability protection, LLCs are a popular choice for small businesses. Owners (members) can decide between being taxed like a partnership or like a corporation, and whether the business will be directly member-managed or operated by appointed managers. Maryland Limited Liability Company (LLC)Īn LLC is a versatile business structure. The most common limited liability entities are LLCs and corporations. An entity is anything with independent legal status-and in the case of a business entity, its own liability. To get liability protection, you’ll need to create a separate entity from yourself. This means your personal assets-such as a car, house, or savings-may be at risk if your company gets into trouble. These types of businesses are not legally separate from their owners-owners pay personal income tax on profits and are responsible for any debts or judgments against the business. If ownership and management of a business is shared with one or more partners, that company is a general partnership by default. The structure you choose for your Maryland business determines many important aspects of how it will be taxed and managed, so make your decision carefully.īy default, single-person businesses that haven’t registered with the state (like freelance designers, self-employed real estate agents, or tutors) are sole proprietorships.
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