How to Start a Corporation in Maryland
To start a Maryland corporation, you must file Articles of Incorporation with the State Department of Assessments and Taxation (SDAT) and pay a $120 minimum filing fee. While this filing creates your business, it’s really just the first step to launching your Maryland corporation. The complete steps to incorporating in Maryland are as follows:
- File Maryland Articles of Incorporation
- Pay Maryland’s SDAT a minimum of $120
- Wait to receive an approved copy of your Articles
- Get a federal tax ID (EIN) for the corporation
- Create Maryland corporate bylaws
- Take these documents to the bank and get a Maryland corporate bank account
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Maryland Articles of Incorporation free download. When you're done filling out the form, submit it to your state.
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3 Day Maryland Corporation For $380 Total
How to File Maryland Articles of IncorporationTo form a Maryland corporation, you file the Articles of Incorporation in the following steps:
What is the Cost of a Maryland Corporation?
At least $120. The filing fee is $100, but there’s also an “organization and capitalization fee” of $20. This fee increases if you have over $100K in combined par value (or over 5K shares with no par value).
Need your approval fast? For most filing methods, expediting is an extra $50. Online filing is quick and only $150 total plus a 3% convenience fee.
Hire Northwest to form your Maryland corporation and your total, out-the-door cost is $380 for 3-day filing time.Get Started
How Much Does a Corporation in Maryland Cost Each Year?
The mandatory Maryland Annual Report comes with a hefty $300 filing fee.
Other yearly costs are more variable, but one that often comes as a surprise to new business owners is Maryland’s Personal Property Tax. This return is filed together with the Maryland Annual Report, separate from other Maryland taxes.Get Started
What are the Taxes for a Maryland Corporation?
The Maryland corporate net income tax rate is a flat 8.25%. Have an S corporation? You may still have to pay some entity-level income tax.
Maryland has a special tax rule for pass-through entities with nonresident members. Nonresident members file their personal returns in their home states—not Maryland. To recoup these lost taxes, Maryland requires pass-through entities with nonresident members to file Form 510C and pay taxes on any nonresident taxable income.
The Maryland sales tax rate is 6% across the state. Cities and counties can’t tack on extra local sales taxes, so you’ll pay the same at the counter, no matter whether you’re in Annapolis or Cumberland. There are, however, a few special rates for specific items and services—for example, alcohol is taxed at 9%.
Is a Registered Agent Required for a Maryland Corporation?
Your Maryland corporation will need a Maryland registered agent (also called a “resident agent”). A resident or registered agent accepts legal notifications on behalf of your business. You don’t necessarily have to hire anyone. You can appoint yourself as registered agent. While it sounds like a pretty straightforward job, being your own agent has some downsides. You’d have to list the address where you’ll be in your Articles—a public document and a prime target for data sellers. Goodbye privacy, hello junk mail. Registered agents also have to be available at the address listed during business hours. This can be tough when business doesn’t always take place in the office.
Not too keen on giving up your privacy or being tied to your desk? Consider hiring a commercial registered agent like Northwest. When you sign up for our services, you can use our address and information throughout your Articles of Incorporation. No need to worry about junk mail or unwanted visitors on your doorstep. We’ll also accept, scan and send you any service of process the same day, so you can stay on top of your business—whether you’re running errands, sitting in meetings or ducking out to the Eastern Shore.Get Started
Maryland Corporation Versus Maryland LLC:
Maryland corporations and LLCs have similar filing fees. For example, Articles are $100 and Annual Reports are $300. Corporations do have one extra upfront fee: the organization and capitalization fee (typically $20), but costs are otherwise pretty close. Even taxes can be similar—depending on tax election, LLCs and corporations may have the same tax obligations. For instance, both entities can choose the S election.
When it comes to operations, corporations and LLCs tend to appeal to different kinds of businesses. Corporations are popular for large businesses or those that hope to scale quickly. Their familiar, formal structure can make it easier to manage lots of people and divisions. The flexibility of stock can also make it easier to attract investors and raise capital. LLCs are more common for small businesses that value simplicity. Leaning towards an LLC? Here’s information on starting an LLC in Maryland.
Do I Need a Tax ID Number (EIN) for a Maryland Corporation?
Absolutely. The IRS requires corporations to obtain an EIN for federal tax filings. You’ll also need your EIN to register with the Comptroller of Maryland for taxes. You can apply for an EIN directly with the IRS for no fee.
Had enough paperwork already? Hire Northwest to get your EIN for you. Just add on EIN service during checkout when signing up for our incorporation services.
Does a Maryland Corporation Need a Business License?
There’s no general, statewide business license in Maryland, but local areas often have their own requirements. Most Maryland counties require licenses for specific business activities. For example, Montgomery County licenses a wide variety of activities, from running a group home to renting apartments. Frederick County, on the other hand, focuses licensing on electrical, plumbing and gaming activities.
Some cities and towns have additional licensing requirements as well. For instance, all businesses operating in Ocean City must get a city business license (and may also need a license from Worcester County, depending on their specific business activities).
What is a Maryland Annual Report?
Your Maryland Annual Report is a form you file with SDAT each year. Besides emptying your wallet, the form serves to update the state on your ownership and contact information. Questions in Section III of the form also determine whether or not you’re required to file a Personal Property Tax Return as well (see below). The Annual Report and the $300 filing fee are due April 15th each year. Forget to file? Late fees can be as much as $500, depending on how late your filing is and how much you owe in personal property taxes.
Avoid late fees and penalties when you hire Northwest as your registered agent. We’ll send you report reminders to help ensure you stay in compliance.
What is Maryland’s Personal Property Tax Return?
A major headache. More specifically, the Personal Property Tax Return is a tax return most businesses have to submit along with their Maryland Annual Report. You’re required to file this return if your Maryland corporation owns, leases or uses any personal property in Maryland or if your business has a Trader’s License. On the return, you list your personal property, its original cost, and its current value.
What is personal property? Personal property is basically everything besides intellectual property, real estate, land or registered vehicles. It includes inventory, machinery, tools, furniture, computers, supplies—everything. Have blinds on your office windows? They count too. As you can imagine, this return takes a lot of work, so be sure to give yourself plenty of time before the April 15th deadline.
Maryland Corporation Articles of Incorporation Requirements
Your incorporator is the person who submits your Articles of Incorporation to officially form your Maryland corporation. Incorporators must be 18 years and must include their name and signature. Incorporators don’t have to be directors, officers or anyone in the corporation. Tip: We’ll be your incorporator when you hire Northwest.
Your name must include “Corporation,” “Incorporated,” “Limited” or an abbreviation of one of these words. Tip: Most corporations go with “Corp.” or “Inc.”
This section isn’t as existential as it sounds. Your “purpose” is just the business activity you plan to engage in. You can be general and state that you are incorporating to engage in lawful business in the State of Maryland. Or, you can be more specific and describe what your business will primarily do, like “motorcycle repair and maintenance.”
This Maryland street address is the official address of your business and where you’ll receive mail from the state (except for any service of process, which will go to your resident agent). Tip: Keep it simple with one address for all your mail and notifications. Hire Northwest as your resident agent, and you can use our Maryland address as your principal office address.
Include the name and signature of either a Maryland resident (such as yourself) or a business that provides Maryland resident agent service (such as Northwest). Tip: We’re fans of Northwest.
Resident Agent Address
Like your principal office, your resident agent address must be a Maryland street address and will become part of the permanent public record of your Maryland corporation. Tip: Hire Northwest and our address will go here.
List the number of shares you’re creating and their par value. Par value is the “face value” of the share (the price listed on stock certificates). It’s typically the lowest value at which the share will be traded. If the par value of all your shares together is over $100,000, your Articles filing fee will increase. No par value? Your filing fee will increase if you have more than 5,000 shares.
List the names of your directors and the total number of directors your Maryland corporation will have.