How to Start a Business in Maryland

Introduction

Maryland is home to hundreds of thousands of businesses, from small start-ups to Fortune 500 corporations. The state’s business community is diverse and vibrant, with opportunities for entrepreneurs in every industry. If you’re thinking about starting a business in Maryland, there are some things you’ll want to know before taking the plunge. In this guide, we’ll cover the steps involved in starting a company in Maryland and help you understand what it takes to be successful in this state’s unique market.

Choose a Business Structure (LLC, corporation, sole proprietorship)

You have to choose a business structure, which is a classification for how your business will be taxed. The most common form of business in Maryland is the limited liability company (LLC). It’s relatively easy to set up and maintain, but it has some limitations on who can own an LLC—only people or entities may be members. An LLC can also choose between state income taxes and federal taxes if they operate under Subchapter S status.

If you’re willing to go through more complexity and expense, consider setting up as a corporation instead of an LLC. Corporations require more paperwork and filings than do other forms of business because they’re separate legal entities from their owners (shareholders). They also allow for professional management via boards of directors that keep track of shareholders’ interests; however, their stock cannot be traded publicly until they get certified as public companies with the State Department of Assessments & Taxation (SDAT).

Choose a Business Name

Next, you will need to choose a business name. Your name should be unique and distinctive so that it is not too similar to another business in your area. Make sure that your business name is available as a domain name (the website address) and as a trademark (the brand you are trying to protect).

Get a Federal Employer ID

The Federal Employer Identification Number (EIN) is a unique nine-digit number that the IRS assigns to businesses. It’s used for tax purposes and can be used to open bank accounts or file taxes for your business. You will need this number if you plan on hiring employees and paying payroll taxes, but it’s important to know that an EIN does not replace the need for a state tax ID in Maryland.

Get a State Tax ID

Before you can set up any kind of business, you need to obtain a state tax ID number. This is an identification number that all businesses must have when they operate in Maryland. The application process is done through the IRS, and it’s free of charge.

Obtain the Necessary Licenses and Permits

In Maryland, licenses and permits are required for most businesses. Licenses and permits can be obtained from the Maryland Department of Labor, Licensing and Regulation (DLLR). Some examples of licenses or permits you may need to include:

• Business tax ID number (you can get this online)
• Sales tax license (you can get this online)
• Alcoholic Beverage Control Board permit (you can get this online)

Set up your Accounting Systems

You’ll want to set up your accounting system as soon as possible. This is a very important part of running your business because without accurate records you won’t be able to make informed decisions about how well your business is doing or make any tax filings accurately. You can use basic programs like Excel or Google Sheets to keep track of sales, expenses, and profits. If you have larger or more complex systems in mind then consider hiring an accountant that specializes in small businesses and can help build out a custom solution for you.

Once you’ve got the basics down pat it’s important to keep everything up to date throughout the year so that when tax season rolls around there are no surprises waiting for you!

Takeaway

There are a few things that every business needs to get up and running. You’ll need the right infrastructure in place with reliable internet access, computers or tablets for your staff, and some software programs to manage your finances. Once you’ve got those basics down pat then it’s time to start building out a custom solution that works best for your business!

Conclusion

Starting a business is an exciting and rewarding process. But the first step is always to do your research. If you want to start a business in Maryland, be sure to check out all the resources available at sba.gov/tools/start-business-local-government and marylandbusiness.org (where you can also find more information on how to obtain licenses).