Form a Maryland Corporation
Easily create your Maryland (MD) corporation online now. Forming a Maryland corporation has never been easier. Incorporate in Maryland with the Maryland incorporation experts. We will assist you with forming your Maryland corporation, the right way. To get started, simply click on â€śOrder Now.â€ť Please feel free to call us, anytime, with any questions.
Incorporating in Maryland
Incorporating in Maryland can be vital to businesses based of Maryland. At LawInc, we prepare your Maryland corporation Articles of Incorporation, bylaws, stock certificates, stock ledger and more. We can even obtain your Maryland corporation Tax ID number and file your Maryland S corporation election with the IRS.
Maryland Incorporation Information
The following Maryland incorporation information will likely be helpful when deciding to incorporate in Maryland.
Maryland Corporation Name
The first step in forming a Maryland corporation is selecting the business name. Maryland corporation names:
- Must contain “Company,” “Corporation,” “Incorporated,” “Limited,” or abbreviations of these words.
An available Maryland corporation name may be reserved for a 30 day period.
LawInc.com permits you to choose up to three names and will conduct a name search for your Maryland corporation, prior to filing.
Maryland Corporation Formation
Maryland Filing Procedure: To incorporate in Maryland, you must file Maryland Articles of Incorporation with the Maryland State Department of Assessments and Taxation.
The Maryland Articles of incorporation should include:
- Maryland incorporatorâ€™s name.
- Maryland incorporatorâ€™s address.
- Name of the Maryland corporation.
- Purpose of the Maryland corporation.
- The street office of the principal office of the corporation in Maryland (cannot be a PO box).
- Name and address of the registered agent in Maryland.
- The Number of shares authorized and the par value of the shares.
- The name and number of the Maryland corporationâ€™s directors.
- Signature of the Maryland incorporator(s).
- Signature of the Maryland registered agent.
Maryland Corporation Stock: The maximum authorized shares for the minimum organizational fee is $100,000 of par value shares or 5000 no-par shares.
Maryland Incorporator: A Maryland corporation may have one or more incorporators. Maryland incorporator must be at least 18 years old. There is no requirement that the incorporator be a resident of Maryland.
Maryland Corporate Directors: The minimum number of directors is 1. A Maryland corporation director must be a natural person at least 18 years old. Directors need not be listed in the articles.
Maryland Corporation Purpose: It is acceptable to state either alone or with a specific purpose clause, â€ś The purposes for which the corporation is organized shall be to transact any and all lawful business for which corporations may be incorporated pursuant to the provisions of the Maryland Business Corporation Law.â€ť
Maryland Corporation 1244 Stock: Election to have stock classified as IRC Section 1244 stock allows for a substantially larger application of the deduction from business losses to ordinary income than regular stock. With regular stock, you can only offset $3,000 against ordinary income. With the issuance of Section 1244 Stock, the corporation can claim an ordinary loss deduction of as much $100,000.
Maryland Registered Agent: A Maryland corporation must maintain a registered agent and office to receive service of process in Maryland. The Maryland registered agent should be available, at a Maryland physical address, during normal business hours to accept important legal and tax documents on behalf of the Maryland corporation. The registered agent can either be (1) an adult citizen of Maryland or (2) another existing Maryland corporation. A Maryland corporation cannot act as its own resident agent.
Maryland Corporation Post-Filing Requirements
Maryland Corporation Annual Report: In Maryland, annual reports are part of the Personal Property Return [PPR] for an entity. The due date is April 15 for both corporations and LLCs. The annual report fee itself is $300 for either a LLC or a corporation. This does not include any taxes due in connection with the personal property return.
Maryland Corporate Minutes: Maryland corporations are required to hold and document annual shareholder and director meetings.
Maryland Corporation Taxes
Maryland Corporation Taxes: For information on the Maryland state income tax rate, visit: http://www.marylandtaxes.com/default.asp
Maryland C Corporation: All Maryland corporations formed by default are “C” corporations. A Maryland C corporation is a Maryland corporation that has not made an election to be an “S” corporation. The term C corporation is specifically used because the entity is taxed under subsection C of the IRS code. Maryland C corporations are taxed at two levels (“double taxation”). This means that the corporation itself pays its own tax when it makes money (the first tax). The owners or shareholders are then taxed again when they are paid a salary or dividend by the corporation (the second tax). Despite double taxation, Maryland C corporations offer many planning and benefit opportunities.
Maryland S Corporation: A Maryland S corporation is a corporation that has made an election with the IRS to be treated for tax purposes as a “pass-through entity.” This means that corporate profits and losses are passed through to the shareholders (owners) who report them on their own personal tax returns and pay the tax at the individual level. The corporation pays no federal income tax at the corporate level. Maryland S corporations are not subject to the double taxation C corporations encounter. The State of Maryland recognizes S corporation status.
These are the 3 main advantages of forming a Maryland S corporation:
- No double taxation: One of the main advantages of Maryland S corporation status is that it avoids the double taxation that occurs with a regular Maryland C corporation. In a Maryland C corporation, the corporation pays income tax on its profits and, if those profits are distributed to shareholders, the shareholders pay income tax on the distribution.
- Loss deductions: The availability of losses. Shareholders of a Maryland S corporation generally may deduct their share of the corporation’s net operating loss on their individual tax returns in the year the loss occurs. Losses of a Maryland C corporation, however, may offset only the corporation’s earnings.
- Self-employment tax savings: By electing S corporation status, only the earnings actually paid out to you as salary are subject to payroll taxes; money left in the business is not subject to payroll taxes or self-employment tax. All income passes through, but its tax status depends on whether it is classified as salary or ordinary income.
Federal Tax Identification Number/Employer Identification Number (EIN): The Federal Tax Identification Number, also known as the Employer Identification Number (EIN) is a number that is assigned to a business by the Internal Revenue Service. An EIN is like a Social Security Number for a business. It is a requisite for certain business functions such as opening bank accounts or hiring employees. All Maryland corporations should obtain an EIN.
Maryland Corporation Dissolution
Maryland Corporation State Dissolution Requirements: A Maryland corporation can be voluntarily dissolved by filing Articles of Dissolution with the Maryland State Department of Assessments and Taxation.
Maryland Corporation Federal/IRS Dissolution Requirements: Corporations are required to file IRS Form 966, Corporate Dissolution or Liquidation. A final tax return should be filed with the IRS. Form 966 should be filed along with the final tax return. Final state tax returns may also need to be filed. Follow up with an accountant regarding all tax related requirements.