Articles of Incorporation Maryland: What You Need to Know
Articles of Incorporation in Maryland are state documents required for a corporation's formation.3 min read
2. Factors to Consider When Forming an LLC
Articles of Incorporation in Maryland are state documents required for a corporation's formation. These documents outline basic information, such as a corporation's name and purpose. If you form an LLC, these documents are called Articles of Organization. This includes the same basics plus information about your Registered Agent.
Understanding the articles of incorporation in Maryland will help you manage your business's liability and ensure that you meet all important dates for things like filing taxes and annual reports. Below you will find highlighted several important facts about the Articles of Organization in the state. Read on to learn about forming a limited liability company (LLC) and what factors you should consider before establishing your LLC.
What Is an LLC?
An LLC protects business owners in the event of a person suing their company. To form an LLC, which combines elements of a corporation and of a partnership, you must file LLC Formation Documents. You also need to pay Maryland's filing fee.
To begin the process of completing your LLC Formation Documents, you must first select an approved LLC name. The second step is to nominate a Registered Agent. With this complete, you can send your documents off and wait for approval. Once you receive your approved files, you officially have an LLC and can do business in Maryland.
Forming an LLC in Maryland
The “Articles of Organization” are Maryland's LLC Formation Documents. These documents outline basic information, such as your LLC's name and purpose and information about your Registered Agent.
LLC owners have to follow some laws governing how they operate in the state but, in general, they can run things as they see fit. The State grants LLC owners lots of flexibility. Here are a few things they can do:
- Excluding acting as an insurer, an LLC may conduct activities related to any lawful business, purpose, investment, or activity. This includes for-profit and nonprofit ventures.
- A business owner can have their LLC run indefinitely or expire at a future date.
- If it's a partnership, the LLC can accept new contracts or take on business at the partners' discretion.
Factors to Consider When Forming an LLC
Though there are many benefits to running an LLC, it's not the only option. Consider these factors carefully before deciding:
- Limited Personal Liability. In the event that an LLC is sued, limited personal liability usually keeps members from being held personally accountable for the business's liability and debts. So if a person files a lawsuit against your LLC, your money and personal assets won't be at risk. That is, the plaintiff's claims won't affect those items. However, there are some exceptions to this. Cases involving fraud, for example, are more complex.
- Credibility. Many customers only do business with credible companies. Correctly filing with the State is one way to prove your legitimacy and give customers peace of mind. Forming an LLC and having that designation in your company's title provides a degree of credibility and professionalism that sole proprietorships and partnerships lack.
- Paying Taxes. Corporations pay taxes on their income, and the owners pay taxes on what the corporation pays or distributes to them. In an LLC, however, members are only taxed on their personal income filings. The tax benefit is a compelling reason to create an LLC, but to understand your unique circumstances, you should talk with a tax professional before deciding.
- Flexibility. LLC owners have great freedom to conduct business as they desire. Though written agreements about how partners run a company are helpful for some matters, the State does not require them for an LLC.
- Legal Requirements and Paperwork. A corporation must create a board of directors, but an LLC doesn't need this to conduct business. Corporations also have strict record-keeping requirements that LLCs do not. For example, corporations must record minutes at stockholder and board meetings. It might make sense to do these things as an LLC, but the State doesn't require it. However, LLC owners do have to file Articles of Organization and submit annual items. This includes filing the Personal Property Rent. You can find this form and the filing instructions online.
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