The power for incorporating in Maryland lies with the Maryland Secretary of State, Charter Division. This Division also keeps up with all corporate filings of record. The main location is in Baltimore. The chief types of business organizations structures in Maryland are Sole Proprietorships, General Partnerships, Corporations, Limited Liability Companies, Limited Partnerships, and Limited Liability Partnerships. Each type has distinct advantages and disadvantages, depending on the needs of your business. Selecting the appropriate organizational structure for your company is one of the most important decisions you will make.
Five basic steps to incorporate in Maryland
Incorporation in Maryland begins with reserving an entity or corporate name. This fundamental step keeps name repetition from taking place. First, search to make sure your company name is vacant. You can use the free CorpNet company name search. The company name must use either “Corporation”, “Incorporated,” “Limited Liability Company,” or an abbreviation.
Except in the cases of an electric or transportation cooperative, an individual may not use the term “cooperative” as part of their corporate or business name unless they have met the terms with the requirements of this subtitle.
Register your corporation (or LLC) with the Secretary of State. Articles of Incorporation should be filed for corporate structures while Articles of Organization are filed for LLCs. The name and address of each person incorporating in Maryland must be listed in the articles, along with a declaration by each incorporator that he or she is at least 18 years of age and establishing a corporation under Maryland law. When you file, you will be given a business entity ID number. It is a number that can be used for all filings and communication with the office.
Find out if you need a license. A State of Maryland Business License is necessary for most businesses. A trader’s license is obligatory for buying and re-selling purposes. To find out whether your business activity needs licensing by the State, and must have any extra licenses and permits, contact the Clerk of the Circuit Court in the county in which your business will be positioned. More information can be obtained from the Maryland Department of Labor, Licensing, and Regulations website.
Have the first organizational meeting for the corporation or LLC and apply the Bylaws (corporations) or Operating Agreement (LLCs). This is an executive meeting and must be recorded correctly. (See section below about officers and documentation.)
Submit an application for a Federal Employer Identification Number (EIN) under the corporate name. This number is acquires through the IRS. You will also have to organize a bank account under this number. Your financial institution will want for a copy of the EIN plus a certificate of registration from the Secretary of State.
Foreign and Domestic Corporations
A Domestic Corporation is one that was incorporated in the state of Maryland. The Articles of Incorporation must be filed with the Secretary of State.
A Foreign Corporation is a business that was incorporated in another country, state or jurisdiction besides Maryland. When a non-Maryland corporation makes a preliminary filing with SDAT that creates an account, that filing must be joined by written proof of existence from the home state that it came from, which is usually the same as a Certificate of Status.
Officers and documents
Officers in the corporation must be listed in the bylaws. A corporation is required to have at least a president, a secretary and a treasurer. An officer should serve for one year and then a successor should be elected unless noted in the bylaws.
Every Maryland corporation is required to have a resident agent. This is the person or office that is chosen to collect official state correspondence. The resident agent has to be either a resident of Maryland or a Maryland corporation.
The president, or other officer that is singled out in the bylaws, has to report a statement of affairs to the shareholders. This declaration must be presented at each yearly stockholders’ meeting and filed at the main office within 120 days after the end of the fiscal year.
Articles of Incorporation – This is the articles of incorporation filed with the Division of Corporations. For foreign corporations, the filing is called: Foreign Corporation Qualification.
Application for Name Reservation – This form can be filed online. It results in a name search and reserves a business name for 120 days.
Notice of Change for Officers, Directors, Shareholders – This is one of several forms used to amend or change information about the corporation.
Corporation Change of Registered Agent – Since the registered agent is the point of contact between the corporation and the State of Maryland, any changes must be documented with the State.
Certificate of Election to Dissolve – Used to dissolve a corporation. There are other forms required for mergers and consolidation.
Forming a corporation online
Incorporation in Maryland can seem like a discouraging endeavor. Nevertheless, it is very possible to incorporate online by filing the right forms in the correct order and this can be carried out remotely through our services. We offer complete packages to establish your corporation or LLC without neglecting essential steps or documents. Mistakes can be costly.
Incorporating online can be as straightforward as providing some initial information and deciding which nature of corporation best fits your requirements. CorpNet is available to help you start a corporation in Maryland and one-year Registered Agent Services is normal in our packages. We also have unlimited customer support.