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410-573-9991

2563 Forest Drive

Annapolis, MD 21401

 

 

 

[starting a new business]

Step by step guide

1. Determine what type of entity you should be: corporation, limited liability company, partnership or sole proprietorship.
This decision affects your liability protection as well as your taxation. It's important.  The decision will have a big impact on your taxes and administrative costs.  Call us for a free consultation and we’ll help you decide.  It’s also a good idea to check with your attorney.  We highly recommend that you work with an attorney if your business will have more than one owner.  For more information on the tax implications, see our overview of business taxes.

2. Make sure the name you want is available. 
Check the MD database to see if the name you want for your business has already been taken.

3. Establish the entity.
(If you chosen to be a sole proprietorship, you can skip this step.)  There are basically three ways to form an entity.  You can fill out the paperwork yourself, which is the cheapest – and quite easy in MD.  You can have your attorney do it.  Or you can use an online company that specializes in forming new business entities.  To do it yourself, click Forming an entity in MD 

4. Register for a trade name. 
File a MD trade name application to register the name you will use to do business.  This may or may not be the name of the entity you just formed.

5. Get an Employer ID Number (also called and EIN or Tax ID #).  
You can apply online for an EIN with the IRS.  (Note - you do not need an EIN if you are a sole proprietor and you will not have any employees.)

6. Open a bank account. 
Corporations, partnerships and LLCS will need an EIN.   Sole proprietorships can use a social security number.

8. Get a license.
Depending on your business, you may need a license. You can figure out what you need and apply online at Maryland Business Licenses Online

9  Get insurance. 
Generally every business needs insurance, even if you formed an entity with liability protection.  This might include general liability protection, errors and omissions insurance, workers compensation, etc.

10.  Start a payroll.
If you are going to have employees, there are a number of things that need to be done.  Start a payroll

11.  Choose your tax. 
If you formed a corporation or an LLC and you have decided to be taxed as an S Corporation, fill out and submit Form 2553. This is due 75 days after you establish the entity.. If you are an LLC and you have decided to be taxed as a corporation, fill out Form 8832.