Key Takeaways

  • To incorporate in Maryland, businesses must file Articles of Incorporation with the Maryland State Department of Assessments and Taxation (SDAT).
  • The Articles must include details such as the corporation’s name, purpose, stock structure, principal office, and resident agent.
  • Maryland allows both stock and nonstock corporations, each with unique requirements and fees.
  • Businesses must maintain a resident agent in Maryland to receive legal documents and annual report notices.
  • Once incorporated, corporations must file annual reports and personal property returns with SDAT to remain in good standing.
  • Maryland offers both online and mail filing options, and foreign entities must register before conducting business in the state.
  • Consulting a business attorney can ensure compliance with all Maryland incorporation laws and help structure your business properly.

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.

An LLC isn't like other enterprises that a person can form. To get started, follow the steps in the Maryland LLC Act. This will walk you through the requirements for setting up an LLC.

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.

What Are Articles of Incorporation in Maryland?

To incorporate in Maryland, businesses must file Articles of Incorporation with the Maryland State Department of Assessments and Taxation (SDAT). This legal document formally creates your corporation and provides the state with essential details about your business. The Articles serve as your company’s charter and establish its legal existence separate from its owners.

The Maryland Articles of Incorporation typically include:

  • Corporate Name: Must be unique and include a corporate designator such as “Inc.,” “Corporation,” or “Incorporated.”
  • Purpose: A general statement outlining the nature of the corporation’s business activities.
  • Principal Office: The street address of the corporation’s primary Maryland location.
  • Resident Agent: The individual or entity authorized to receive legal documents on behalf of the corporation.
  • Stock Information: For stock corporations, you must specify the number and par value of authorized shares.
  • Incorporators: The name and address of each person involved in forming the corporation.

Once filed and approved by SDAT, the corporation gains legal status, allowing it to issue stock, enter into contracts, and operate as a separate entity from its owners.

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.

Foreign Corporations Doing Business in Maryland

If your business was incorporated outside Maryland but intends to operate within the state, you must register as a foreign corporation with SDAT. To do this, file the Foreign Corporation Qualification Form, provide a certificate of good standing from your home state, and appoint a Maryland resident agent.

Foreign corporations must also file annual reports and maintain compliance with Maryland business laws. Failing to register properly can lead to penalties and an inability to enforce contracts within the state.

Maintaining Corporate Compliance in Maryland

After you incorporate in Maryland, staying compliant with state requirements is essential to maintain good standing. Corporations must:

  • File an Annual Report: Due each year by April 15. This report includes company information and, if applicable, a personal property return.
  • Pay Franchise Taxes: Maryland does not have a separate corporate franchise tax but assesses business personal property taxes based on county jurisdiction.
  • Maintain a Registered Agent: If your agent changes or resigns, you must promptly file an amendment with SDAT.
  • Report Changes: Update the Articles if you amend your business name, stock structure, or principal office address.
  • Keep Proper Records: Maintain meeting minutes, bylaws, and shareholder communications as part of corporate governance best practices.

Stock vs. Nonstock Corporations in Maryland

Maryland recognizes both stock and nonstock corporations:

  • Stock Corporations: These entities issue shares of stock and are owned by shareholders. They are typically for-profit businesses and must include share information in their Articles of Incorporation.
  • Nonstock Corporations: Commonly used for nonprofit organizations, these entities do not issue stock. They must still file Articles of Incorporation but are governed by members or directors instead of shareholders.

Each type has different filing requirements and fees. For instance, the base filing fee for a stock corporation is generally $120 plus $1 for every $1,000 of capital stock, while nonstock corporations pay a flat filing fee.

Steps to Incorporate in Maryland

If you decide to form a corporation rather than an LLC, you’ll need to follow Maryland’s incorporation process. The SDAT offers both online filing through Maryland Business Express and mail-in submission options.

Here are the primary steps to incorporate in Maryland:

  1. Choose a Corporate Name: Conduct a name search through the SDAT database to ensure availability. You can also reserve your chosen name for 30 days for a small fee.
  2. Appoint a Resident Agent: Your resident agent must be a Maryland resident or a business authorized to operate in Maryland with a physical street address (P.O. boxes aren’t accepted).
  3. Prepare and File the Articles of Incorporation: Include all required information and submit them online or by mail. Standard processing takes about 7–10 business days, though expedited options are available.
  4. Obtain an EIN: Apply for an Employer Identification Number (EIN) from the IRS to handle payroll and taxes.
  5. Create Corporate Bylaws: While not required to be filed with the state, bylaws outline internal management, voting rights, and decision-making processes.
  6. Hold an Organizational Meeting: Incorporators or initial directors should meet to adopt bylaws, issue stock, and elect officers.
  7. File Annual Reports and Pay Fees: Maryland corporations must file an Annual Report and Personal Property Return by April 15 each year to stay in good standing.

Frequently Asked Questions

  1. How long does it take to incorporate in Maryland?
    Online filings through Maryland Business Express are typically processed within 7–10 business days. Expedited service is available for an additional fee.
  2. What is the cost to incorporate in Maryland?
    The filing fee for stock corporations starts at $120 plus $1 for every $1,000 of authorized capital stock. Nonstock corporations pay a flat fee.
  3. Do I need a lawyer to incorporate in Maryland?
    While not required, consulting a business attorney can help ensure proper filing, structure selection, and compliance with Maryland corporate laws.
  4. What is a resident agent, and why do I need one?
    A resident agent (or registered agent) is a person or entity that receives legal documents and state correspondence on behalf of your corporation.
  5. Can a foreign corporation operate in Maryland?
    Yes, but it must first register with SDAT as a foreign corporation and appoint a Maryland resident agent before conducting business in the state.

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