How to Start a Business in Maryland Checklist

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How to Start a Business in Maryland:

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How to Start a Business in Maryland:

There are several ways to start a business in Maryland. You can either form a sole proprietorship or general partnership which are not legal entities but must still be reported to the state and comply with licensing and tax requirements, or you can opt to form a legal entity, such as a corporation or LLC, that provides you protection from liabilities. Most businesses can be conveniently registered online, including applications for licenses and tax accounts.

1. 

Form your business.

1.1 

Review Maryland formation options.

Review Maryland formation options.

Maryland offers 4 primary ways of forming your business. Review these closely and pick the one that fits your business best.

1.2 

Name your business.

Name your business.

Once you have decided on a business name, research the name to ensure that it is available for you to use and does not infringe on another business's name.

Once you have verified that the name is available, you can file a trademark application through the Maryland Business Express portal or apply for a corporate name reservation.

Visit the Maryland Department of Assessments and Taxation (SDAT) website and download the Corporate Name Reservation form.

Complete and sign the form.

Submit the application along with a $25.00 filing fee to the Maryland State Department of Assessments and Taxation.

The name reservation is valid for 30 days.

If you need help finding a business name, be sure to check out NameSnack's free business name generator.

1.3 

Register a trade name.

Register a trade name.

If you are forming a sole proprietorship or partnership and want to operate under a name that differs from the full legal name of the business owner(s), you must register a trade name. Legal business entities must register a trade name if they intend to operate under a name that differs from the business's legal name.

Create an account and log in.

Select “Start a New Filing” in the “Online Filings” tab and select "New Business Filings" in the drop-down menu.

Click “Register a New Trade Name” in the drop-down menu.

Read the instructions and click "Proceed to Register Trade Name" in the bottom right corner of the page.

Follow the prompts and complete the required information.

Submit the application and pay a $25.00 filing fee.

1.4 

Get an employer identification number.

Get an employer identification number.

Nearly all businesses will need to register for federal taxes by applying for an employer identification number.

1.5 

Register your business in Maryland.

Register your business in Maryland.

When you create your business structure in Maryland, you register your business name as well. You can download the relevant application forms from the SDAT website and file the completed application with the Maryland State Department of Assessments and Taxation, Charter Division either by mail or in-person, along with the applicable filing fee.

With the exception of articles of incorporation for nonstock corporations and certificate of limited liability partnership, you can file all business formation documents online through the Maryland Business Express portal.

To apply online, visit the Maryland Business Express website and create an account.

Log in and select the tab “Online Filings.”

Click on “Start A New Filing” and select “Register a Business” in the drop down menu.

Select the business type you wish to register.

Follow the prompts and complete the online application.

Verify that all the information you have entered is correct, submit the application and pay the applicable filing fee.

While there are no legal entry formalities for sole proprietorships and general partnerships, they must complete and submit an application for identification number upon which it will be determined whether the business needs an identification number.

1.6 

Obtain necessary licenses and permits.

Obtain necessary licenses and permits.

In Maryland, most businesses, including retailers and wholesalers, are required by law to have a business license. Your local clerk of the court can advise you on licensing requirements, and you can also get information from your county’s office on inspections, licenses, or permits.

If your business buys and resells goods, you are required to have a trader's license. Depending on the nature of your business, you and your employees may also need professional and occupational licenses.

Visit the Maryland OneStop website and select "Browse" in the "Organizational" box or select the relevant category under the heading "Browse by State Agencies."

Next, you will find a list of entries that display the title of the license or permit, a brief description, the application fee, and the estimated time for approval.

Browse the directory of licenses and permits or enter a keyword to find a relevant entry.

Select the license or permit you need and read the step-by-step instructions provided. Below the instruction, you will have the option to select "Apply Now" to start your online application.

Follow the application instructions, download and complete the required forms, submit the application and any required documentation, and pay the fee.

If you have any questions regarding the license or application process, you can reach out to the responsible agency using the contact information provided on the bottom of the page.

2. 

Register your business for taxes.

2.1 

Set up Maryland tax and insurance accounts.

Set up Maryland tax and insurance accounts.

To register for tax and insurance accounts with the comptroller of Maryland, visit the comptroller's local offices or the website to obtain a Combined Registration Application (CRA) form. When completing this application, select all the tax and insurance accounts you need to register, such as a sales and tax use license, an employer's withholding tax account, and an unemployment insurance account.

You can also complete this application online through the Maryland taxes interactive web services portal.

Sign in to your Maryland Business Express account and click "Start A New Filing" in the "Online Filings" tab.

Select "Register Tax Accounts with Comptroller" in the drop-down menu.

Select "New Business" as the reason for the application.

Follow the prompts and enter the required information about your business.

Select the licenses and tax accounts you want to register.

Enter you contact information and verify that all the information you provided is correct.

Complete and submit the application.

2.2 

Apply for a Maryland sales and use tax account.

Apply for a Maryland sales and use tax account.

If your business makes sales or provides taxable services in Maryland, you must have a sales and use license.

Obtain a Combined Registration Application (CRA) from the Comptroller of Maryland's local offices or website.

Complete section A and check the relevant box (a.) under point 8.

Answer all questions in all the other sections that pertain to your business.

Complete section F and sign the form.

Mail the completed application to the address provided on the form.

2.3 

Apply for an employer's withholding tax account.

Apply for an employer's withholding tax account.

Employers paying salaries, wages, or compensation to individuals are required to have an employer's withholding tax account.

Get a Combined Registration Application (CRA) form from the Comptroller of Maryland's local offices or download it from the website.

Complete section A and check the relevant box (e.) under point 8.

Answer all questions in all the other sections that pertain to your business.

Complete section F and sign the form.

Mail the completed application to the address provided on the form.

2.4 

Apply for an unemployment insurance account.

Apply for an unemployment insurance account.

In Maryland, industrial and commercial employers, as well as many nonprofit businesses, are subject to the state unemployment insurance law and must register an unemployment insurance account.

Obtain a Combined Registration Application (CRA) form available from the Comptroller of Maryland's local offices or from the Maryland taxes website.

Complete sections A and B.

Answer all questions in all the other sections that pertain to your business.

Complete section F and sign the form.

Mail the completed application to the address provided on the form.

3. 

Register employees with the state and get insurance.

3.1 

Report new employees to the state.

Report new employees to the state.

If you hire or re-hire employees for your business in Maryland, you are required by federal and state law to report them within 20 days to the Maryland State Directory of New Hires Reporting.

You can report new hires by completing a new hire report available on the employer services portal and mailing it to the Maryland State Directory of New Hires (the address is provided on the form) or by using an online form. To access the online resources you will have to create a user account.

Create a user account on the Maryland State Directory of New Hires website and log in.

Click "Report New Hires."

You will be directed to the new hire report online form.

Enter the required information.

Select "submit."

You can view the reports you have submitted in the "View Pending" section until they have been fully processed.

3.2 

Obtain mandatory insurance.

Obtain mandatory insurance.

In Maryland, workers' compensation insurance is mandatory. If your business fails to comply, you are subject to a fine of up to $10,000.

Maryland is also a mandatory vehicle insurance state. If your business uses vehicles, you are required by law to be covered with liability insurance through a vehicle insurance company licensed in Maryland.

Maryland Business Types:

1. Sole Proprietorship.

A Maryland sole proprietorship is the simplest business structure you can choose. The business is not a legal entity and there is no distinction between the business and its owner, which means its owner is liable for its debts and losses. In Maryland, sole proprietorships must submit an application for identification number with the SDAT.

2. General Partnership.

A general partnership is similar to a sole proprietorship but has more than one owner. It is not a separate legal entity and therefore owners are not protected from liability. They must also submit an application for identification number with SDAT for their need thereof to be determined.

3. Limited Liability Company.

Maryland limited liability companies are legal entities with a structure similar to a partnership and are taxed the same way as a partnership, but offer the same liability protection for its owners, referred to as members, as a corporation.

4. Corporation.

Maryland corporations are separate legal entities and are owned by shareholders who must elect at least three officers (a president, a secretary, and a treasurer) and one director to run the business. Corporations afford shareholders protection from liabilities but are subject to double taxation.

Fees for Starting a Business in Maryland:

Filing Type

Cost

Sole proprietorship

$0.00

General partnership

$0.00

Corporation articles of incorporation

$100.00 plus a $20.00 organization fee

LLC articles of organization

$100.00

Reservation of corporate or limited partnership name, LLC or LLP name

$25.00

Trade name filing

$25.00

Expedited service fee

$50.00

Registration of tax accounts

$0.00

FAQs:

How much does it cost to register a business in Maryland?

Costs vary depending on your business structure. If you start a corporation in Maryland, the cost is $100.00 plus a $20.00 organization fee. If you start an LLC, the cost is $100.00.

What permits do I need to start a business in Maryland?

While there is no general permit every business in Maryland must have, most businesses require a license. For example, if your business buys and resells goods, you will require a trader's license. Professional service businesses may require occupational and professional licenses. Visit the Maryland Licensing OneStop portal to search for licenses and permits you may need.

Is Maryland a good place to start a business?

In Maryland, businesses are provided plenty of online resources to help them get started, manage, and grow their business. The state boasts one of the highest business survival rates in the U.S., making it an attractive place to start a business.

How do I set up an LLC in Maryland?

  • Name your Maryland LLC.
  • Choose a resident agent.
  • File the Articles of Organization.
  • Create an operating agreement.
  • Get an EIN.

Do I need to register my business in Maryland?

Yes. You can register your business in Maryland with SDAT online. You also need to register your business for taxation in Maryland with the Comptroller of Maryland.

What are the most common business entities in Maryland?

  • Sole proprietorships.
  • Partnerships.
  • Corporations.
  • LLCs.

What are the best banks for small businesses in Maryland?

  • Azlo.
  • Wells Fargo.
  • Citibank.
  • Chase Bank.
  • Capital One.
  • M&T Bank.
  • PNC.

How do I start a small business in Maryland?

  1. Create a business entity.
  2. Register your business name.
  3. Apply for an EIN.
  4. Open a business bank account.
  5. Apply for licenses and permits.
  6. Purchase insurance.
  7. Report your employees to the state.

Where can I get a business licenses on State of Maryland?

  • Department of Agriculture.
  • Department of Human Resources.
  • Department of Natural Resources.
  • Department of the Environment.
  • Department of Transportation.
  • Department of Education.
  • Department of Health and Mental Hygiene.
  • Department of Labor, Licensing and Regulation.
  • Howard County Inspections Department.
  • Department of State Police.
  • Maryland Insurance Administration.

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