There are several steps to starting up a business in Fredrick, Maryland. The primary goal is to make sure you go through all the proper steps and procedures to obtain a legal business within the state. Business laws and requirements are constantly changing, so it is critical to get an attorney that handles businesses within the state of Maryland.
Attorney Rebekah Lusk and her associates are lawyers needed to get the company kicked off on the right foot. They can handle all the legal paperwork required to file with the state and help with other areas within a person’s business, such as contracts, labor laws, and other legal aspects.
Usually, when finding an attorney for a start-up business, many business owners stick with the same attorney throughout their business operation. This is because the attorneys can guide the business owner through any hardships they may encounter, as most businesses will eventually face at some point.
Deciding on the Type Business
Before getting any paperwork started, the first thing is to decide what type of business will be conducted within the state of Maryland. Listed below are the options.
- Sole Proprietorship
- General Partnership
Once the type of business is determined, then the paperwork can begin with an attorney. Most people who do Sole Proprietorship or Doing Business As (DBA) decide to venture off independently and file directly with the courthouse within their county. It is strongly advised to have attorneys handle everything because legal issues may always arise as the attorneys know the legal statuses at the time of filing.
The name of the business is also something that takes heavy consideration. When a company starts up, it should have its distinguished name. It cannot be a name that is already in use. If a company chooses a name already in use, then the owners of the original name can sue for portions of the profits. All names must be registered through the state of Maryland and can be done through the Department of Assessments and Taxation. This is something that the attorneys can also assist the business owner.
Important Information About the Different Types of Businesses
This section covers the proper paperwork which needs to be filed with each type of business. The attorneys have a paralegal to handle the underwriting, and the Lawyer handles the legalities with their client. There is a fee to get this paperwork drawn up to each company, and the cost also covers the filing in which the law firm handles the filing through the courthouses of each county. The state also has some paperwork to consider, which is the Annual Reports.
LLC vs. LLP vs. LP
All of these three are part of the same entity with different stipulations. All must be certified by the Secretary of State. They are Limited Liability Companies, Limited Liability Partnerships, and Limited Partnerships. All have the Articles of Organization. There are other names for these articles, such as Certificate of Organization, Certificate of Formation, and Articles of Association. The name depends on the county. The differences between the different limited liabilities are as follows.
- LLC: Has flexibility with taxes and operational efficiency. Creditors can only go after the business assets, not the personal properties of the owner.
- LLP: Has the advantages of an LLC but combines them with a limited partnership. Creditors cannot go after the partners’ assets, only the business, if the company fails.
- LP: There are two or more owners within a business. This entity has silent business partners.
The paperwork within a corporation that needs to be filed is called the Articles of Incorporation. Other names are Corporate Charter or Certificate of Incorporation. These are documents that establish a corporation within the US or Canada. Like the Articles of Organization, they are filed through an attorney and sent to the Secretary of State. Once the Secretary of State approves the paperwork, the corporation becomes legal.
The information found in the Articles of Incorporation is as follows.
- The business’ name
- The business’ location
- If the corporation is profit or non-profit
- Name and address of all the parties involved
- The summary and purpose of the business
- How many shareholders invested in the stock of the corporation
The primary difference between a corporation and an LLC is the number of employees hired within the company. It is less expensive to file for LLC than a corporation. The size is what separates them. An LLC is primarily a small business with a few members, while a corporation is a significant business with more members that make up an administrative board.
A Sole proprietorship is usually a small business with one owner operating within the company. They may hire temporary workers or contract labor as needed. An attorney can also draw up the paperwork for these small business owners. A Certificate of Assumed Business is the paperwork drawn up for a small business that labels itself as a DBA. The attorney can act as the Notary Public and place the seal of approval on the certificate. From there, it is filed through the county courthouse, usually with the Clerk of Court office. The state determines the filing fees, and the information listed on the certificate is as follows.
- Name of business owner
- Name of business
- Address of business owner
- Address of business
- Signatures of the business owner, Notary Public, and Witnesses
The requirements are not as stressful as the LLC or the corporations. For example, there is no need for articles to be filed or any other paperwork for a sole proprietorship.
Within a general partnership, the exact requirements are necessary as the sole proprietorship. The only difference is, both partners own the business instead of one. Decisions, profits, expenses are split 50/50. Life insurance must be considered and utilized in some situations, and a living will keep things civil and legal between the partnership. An attorney can advise best on what is needed and assist with a legal contract of agreement between the partnership. This act will lessen any disputes that may arise with either or both parties involved in the partnership.
Summing Up the Requirements
Every business needs the proper paperwork to operate in the state of Maryland, whether a small business DBA or a corporation. The primary reason for all of this is to keep tabs on business personal property tax information. It helps with the filing, and for LLC and Corporations, it helps keep everything in check with the annual reports to show the businesses are still in operation.