Become Incorporated in Maryland
Personal-asset protection motivates many Maryland business owners to incorporate. In Maryland, corporations appear as separate legal entities from the shareholders (owners) of the business. This allows Maryland corporations to enter into contracts, to initiate lawsuits or be sued, and to accumulate debts and assets. Incorporated businesses in Maryland have lives of their own and don't dissolve upon death or withdrawal of a shareholder, as explained at Residual-Rewards.com.
Instructions
1. Select a business name for the Maryland corporation. All corporate business names in Maryland must be unique and distinguishable from other businesses registered in that state. The corporate business name must be different from a business name held on reserve with the Maryland State Department of Assessment and Taxation.
A Maryland corporate name must end with or contain the words "corporation," "limited," or "incorporation," according to the American Incorporators website. Maryland corporate name availability can be searched on the state's Department of Assessments and Taxation website.
2. File articles of incorporation with the Maryland State Department of Assessments and Taxation. This department has fill-in-the-blank articles of incorporation that can be completed and printed out. Maryland articles of incorporation must include the principal address and business name of the corporation.
The articles of incorporation must include the name of a person, 18 or older, or business that will act as the corporation's registered agent. Maryland registered agents must maintain a physical address in that state, and must agree to accept legal process on behalf of the new corporation.
State law requires the directors of a Maryland corporation to list their names and addresses in the articles of incorporation. The corporation must have a minimum of three directors, unless there are fewer than three shareholders, according to the American Incorporators website. In that case, the number of directors must equal the number of shareholders in the Maryland corporation.
The number of shares and price per share must be included in the Maryland articles of incorporation. A corporation must submit articles of incorporation via fax, or by mail. As of 2010, it cost $100 to file articles of incorporation in Maryland.
3. Create written corporate bylaws for the Maryland corporation. State law doesn't require corporations to file their bylaws with the Maryland State Department of Assessment and Taxation. However, such corporations should keep written corporate bylaws at their business locations.
Corporate bylaws act as the rules and regulations that may govern a Maryland corporation. Provisions such as the time and place of shareholder meetings, process for holding elections, and the duties of corporate officers may be contained in the bylaws.
4. Request a federal employer identification number, or EIN, from the IRS. Maryland corporations may obtain an EIN on the IRS website or by phone. This allows them to receive a number for immediate use.
Other methods for obtaining an EIN include mailing or faxing Form SS-4 to the IRS. Mailing the form might mean a wait of up to four weeks to receive an EIN. Faxing the form allows the IRS to send an EIN within four business days.
5. Apply for licenses and permits to legally operate the Maryland corporation. The permits and licenses needed can vary depending on the nature of the business. For example, corporations involved in retail clothing sales might need a general business license, a sales-and-use tax permit, and zoning permits based on the location.
All Maryland corporations need a business license to operate in the state. Contact the circuit clerk or county clerk's office in the county where the corporation operates.
6. Issue stock certificates to initial members of the Maryland corporation. This should occur at the first meeting held by the new corporation. The Maryland corporation's board of directors must set the per-share price of the company's stock. Shareholders of a Maryland corporation may exchange services rendered, cash and property in exchange for shares of a Maryland corporation.
