Maryland Corporation and Partnership Law

Choose wisely when considering Maryland incorporation
By V.V. Beardsley, President Beardsley Consulting If you'd like to start a business in Maryland, you must understand the basics of Maryland corporation law. The structure of your Maryland corporation will be instrumental in the success of your business; it will affect your tax treatment, filing requirements, funding potential, and liability obligations.

The ownership plans for your business entity will help determine how to incorporate in Maryland. A traditional corporation is useful to raise money with investors, or to allow ownership to employees in the form of shares. However, Maryland corporate law requires complex ongoing paperwork, and will tax your business income on the corporate and the shareholder levels.

Registration under Maryland LLC laws, on the other hand, is less complicated. Taxation occurs only on one level, which may be an important benefit to your company. The structure is more simple, and can require only two people to incorporate. Under Maryland partnership law, a partnership is appropriate for business ventures that have a limited time frame, or a small number of people involved. Taxation benefits are similar to a Maryland LLC, in that there is no double taxation. The drawbacks include increased exposure to liability for the actions of the partnership.

The options available under Maryland corporate law are:

1. A business corporation (stock or non-stock).

2. Limited liability corporation (LLC).

3. Limited Liability Partnership (LLP).

Choose what works under Maryland corporate law

Corporation or Partnership? The decision depends on your long-term goals for the business. Ownership is easier to divide in a corporation, while partnerships are not well suited for growth or sale, and do not offer stocks. Taxation is different for both types of entities. And, finally, Maryland corporation registration, including Maryland partnership law, requires varying filing paperwork and fees.
Try:  FindLaw will guide you through picking the entity structure that works for you. If you need further advice, find a Maryland attorney.

Make your Maryland corporation a reality

Maryland corporate law requires filing certain forms, as well as submitting fees. The filing may include an Article of Incorporation, or, for Maryland LLC registration, Articles of Organization. Fees will vary depending on the structure. Unlike many states, filing documents for a Maryland corporation must be submitted via mail or fax. Processing time is generally 6-8 weeks.
Try:  Find the appropriate business entity form at the Department of Assessments and Taxation. Confirm the fee required by checking the fee schedule. Complete this checklist to make sure you've completed all necessary steps.

Know the details of Maryland corporate law

You are required to abide by all Maryland rules and regulations with regard to Maryland incorporation, so review the related statutes carefully.
Try:  Review the Corporation and Associations Article of Maryland corporation law to understand your obligations when incorporating in Maryland. Consult a Maryland business attorney for further advice, if you have questions.

• Conduct a Maryland corporation search before committing to your business name. Maryland corporate law does not allow 2 businesses to incorporate under the same name in Maryland.