Advantages of Incorporating New Businesses in Maryland

As many large and small business owners know, the decisions made early on in the life of the business can have significant implications down the road, as the business continues to succeed. One of the first decisions a future business owner must make is where the business should be incorporated. At times, people look only to the one or two states with the most business-friendly reputations, without considering the potential financial and logistical complications. Often, incorporating right at home in Maryland is the best option for future business owners.

When incorporating a new business, many steps must be taken involving important decisions about the structure and location of the business. Without the right type of expertise, it is easy to be confused and overwhelmed by the process. Knowledgeable business law attorneys are indispensable tools under such circumstances, and are able to advise future business owners regarding the best choices for their business.

Essential Steps for Incorporating a Maryland Business

For every potential business owner, the first -- and perhaps most important and complicated -- step is deciding which type of business structure is best for the business. A number of business formations are available, with the most popular being:
- Sole proprietorship
- Partnership
- Corporation
- Limited liability corporation

In most cases, a business lawyer will be best suited to discuss the characteristics of the proposed business plan and advise the future owner as to the best course of action. Certain business types must be registered with the state before proceeding.

After settling on the type of business structure, the potential owner must choose a name for the business. In addition to the business name, a so-called trade name may also be established. A trade name is the name by which the public knows the business. Some businesses also choose to use a logo to identify the business. To protect the logo, the business owner may choose to register for a trademark with the Maryland Secretary of State.

Most new businesses in Maryland are required to obtain a state business license, and should also contact the Internal Revenue Service to obtain an employer identification number and register for other required programs, such as social security.

Benefits of Incorporating in Maryland

For future business owners who reside in Maryland, choosing to incorporate the business in the same state has certain advantages. Maryland is considered one of the top 10 states in the country when it comes to:
- Access to capital
- Education
- Technology and innovation

In addition to these benefits, choosing to incorporate out of state can result in additional expenses and logistical hurdles for the business owner. When a Maryland business incorporates out of state, the owner will typically have to pay filing fees and file annual reports in both states. The business will also need a registered agent in both the state of incorporation and the state in which the business is physically located. In addition, even if the business is located in a state without state income taxes, if the business is physically located in another state, it may still be required to pay taxes in that state.

These are just some of the issues potential business owners must bear in mind when deciding where to incorporate their business. As there are many considerations that have significant, long-term consequences, obtaining the advice of an expert in the area is often advisable. A skilled Annapolis business law attorney will be able to provide advice on the best possible options for your business and help to successfully incorporate the business in Maryland.

Article provided by Schifanelli & Associates, LLC
Visit us at www.marcschifanelli.com

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