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How to Start a Business in Maryland State?

Starting a business abroad can be a complex task, but if you have the guidance of an accredited professional then the task becomes much easier. Starting a business requires going through the complete process and in this article, we shall discuss the step by step process of starting a business in Maryland State. Maryland is the constituent state in the United States of America and lies at the centre of the eastern seaboard.

Why should you open a business in Maryland State?

You should start a business there considering the following factors:

• Maryland State offers pro-business tax incentives.
• Maryland has more than a dozen different grant and loan programs for businesses.
•  The cost of commercial space is also beneficial there. Commercial space in the state is less than the national average.

Step by step process to start a business in Maryland State

The steps to be followed are as follows:

• Choose a business idea

Having a good business idea is the first step to setting up a business there.

• Prepare a Business Plan

Just as builders don’t build without a blueprint, an entrepreneur should not build a business without having a business plan. Therefore when the business idea is in place, start working on the business plan.

• Select a business entity

Business entity means the business structure which specifies how a business is organised legally. There are various types of business entities like:

1. Sole proprietorship;
2. Partnership;
3. Corporation;
4. LLC.

A sole proprietorship means where an individual decides to do business. This is the simplest and less expensive of all business structure as there is no need for state filing. The ease of start-up is the biggest selling point however, in case of this business structure, the owner is responsible personally for all debts and actions of the company.

Partnership is where two or more people conduct a business together. There is no formal state filing required, and the partnership has unlimited liability. The partnership doesn’t pay tax from business income, but profit and losses are passed through the tax return of the owner.

Corporation is a business structure that provides personal asset protection to the owners. They are expensive and slightly tricky to form as compared to sole proprietorship and partnerships. It is a separate entity from the individual.

LLC or Limited Liability Company is a legal business entity choice that provides liability protection of a corporation with the ease of operation that of sole proprietorship. It doesn’t have burdens like corporation has and boasts of the most significant tax flexibility of all business structure.

• Register business name

Register your business name next. If you have a business structure of sole proprietorship or general partnership and doing business under your first and last name, there is no filing, but in case where the business operates under a fictitious name, then you will have to file a trade name application.

You should legally protect your business name with a trademark.

• Get an EIN

EIN or employer identification number is a 9 digit tax identification number issued by the Internal Revenue Service. This helps in identifying a business in the United States. Some businesses do not need to get an EIN.

• Open business bank account

You will have to open a separate business bank account to keep your business finances in separate bank. This way, you can track your business income and expenses.

• Apply for business licenses and permits

Your business in Maryland^[1] will require certain licenses and permits. It will vary based on the activities of the business and its location. Some of the licenses include business licenses, trader license, sales and use tax license, professional licensing etc. Regulatory licenses and permits cover areas such as health and safety, environment, building and construction and specific industries or services. 

• Obtain financing

After that you need to obtain funds to start a small business. Although this may be a challenging task especially for small businesses.

• Hire employees

Hiring employees is the next step for your business.

• Obtain business insurance

This may not be a priority for many who are starting their business however having business insurance can save your business during tough days. Some states will require professional liability insurance for businesses that provide certain services and commercial auto insurance.

• Set up an accounting system

Set up an accounting system for your business which can ensure long term success for your company. Staying on top of your finances will keep your business afloat and you can also maximise your profits.

Conclusion

Being a business owner is a rewarding choice but it will require hard work and dedication to be successful. Starting a business in Maryland State can be challenging, but if you have adequate funding, time and professional support, then you can move forward with your entrepreneurial dream. You are advised to follow the steps mentioned above to set up your business there with strongest possible foundation.

Read our article:Different Corporate Structures in the USA: A Complete Overview