By Fernando Berrocal

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Are you considering forming a corporation in the state of Maryland? To get started, go to the Department of Assessments and Taxation and file the Articles of Incorporation. In this article, we’ll go over five general steps that apply to most business types and industries in Maryland.

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To get started, follow our “How to Incorporate in Maryland” article.

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Step 1: Choose a Name for your Corporation:

The first step to start a corporation is to choose a business name. This name must be distinctive and satisfy Maryland’s corporation naming requirements.

Guidelines to name a Corporation in Maryland: One of the following words must appear in your corporation's name: "limited," "incorporated," "corporation," or an abbreviation of the chosen word. The name you choose cannot imply that the corporation was established for a purpose other than the one stated in the articles of incorporation.

The name you elect for your firm must be distinct from any other existing business in the state of Maryland. This covers reserved names as well. Furthermore, no words associated with government entities are permitted in the name (FBI, State Department, etc).

Make sure to read the corporation naming guidelines in the state of Maryland for more information.

1. Check if the name of the company is available in Maryland: The name chosen for the corporation must be distinct from those used by other businesses in the state. Use the “Maryland Business Express Entity Search” to ensure you choose a unique name. To get more information related to corporation name searches in Maryland, visit our guide “How to Name a Business” and select “Maryland”.

2. The availability of the URL: You should confirm the availability of a good URL (Uniform Resource Locator) for the chosen business name before registering your corporation. It’s recommended to create a business website even if you are not planning to create one right now. We suggest you to buy a web domain (use GoDaddy to search for options) as soon as possible to prevent other businesses from taking them.

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Step 2: Designate a Maryland’s Registered Agent:

You must have a Maryland’s Registered Agent when you register your corporation with the Department of Assessments and Taxation.

What is a Registered Agent? It’s an entity or person designated by a Limited Liability Company (LLC) or a corporation to accept process serving, government communication, and compliance documents in the name of the business. To learn more about this, check this article related to learn about “What is a Registered Agent”.

Who can be a Registered Agent? It can be and individual, a registered professional or a corporate entity. Anyone from the company or an individual can serve as your Maryland’s Resident Agent as long as: is older than 18 years old, have a physical residence in the state where the business is conducted, and is physically available during regular business hours. Keep in mind that there are benefits in nominating someone else to be the registered agent for your LLC or corporation.

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Step 3: Set a date for an Organizational Meeting:

Before filing the Articles of Incorporation, you should hold an organizational meeting to fulfill the following tasks:

• Complete and execute the Articles of Incorporation.
• Propose bylaws and have them approve.
• Choose your first director(s)
• Decide on your ownership structure.
• Prepare an Incorporator's Statement and put it into action.

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Create and Approve Bylaws: The term “Bylaws” refers to a set of rules that determines how your business is run and governed. For all parties concerned, it clarifies the standards and priorities. Any rules set by the federal government or the state will be reinforced by a corporation's bylaws. Include the following in your bylaws:

• The management of the corporation, including the roles of directors and executives.

• The different roles of directors and officers in the corporation's governance.
• How meetings are held, voting procedures, and how executives or directors are elected.
• How will records be preserved and managed, as well as how will disagreements be resolved?
• How bylaws will be added and/or modify in the future.
• The date of the annual shareholders' meeting.
• How to negotiate contracts.

Choose a Share Structure and Strategy: A share of stock is the smallest unit of ownership in a firm. Each share of stock represents a proportion of ownership the company. A shareholder (stock owner) owns the entire company if a company issues one share of stock.

Classes can be created for shares: Each share class has a different set of rights and benefits. You can create multiple classes, each of which can hold an unlimited number of shares. 

The Articles of Incorporation Form from the Maryland’s Department of Assessments and Taxation can only be used to start a corporation with one share class. You must write your own Articles of Incorporation if the company requires a multiple share class structure.

Create an Incorporator's Statement and Implement it: The incorporator(s) must sign and file an Incorporator's Statement with their full names and addresses of each initial director in the corporate’s records book. The initial director(s) chosen in this agreement will serve until the board of directors is elected at the first shareholder meeting. It should be filed with the rest of your corporation's documents.

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Step 4: Register the Maryland Articles of Incorporation:

To form a corporation in Maryland, you’ll need to file Articles of Incorporation. These articles are legal documents that establish your company. The Maryland’s Department of Assessments and Taxation receives it online, through mail, or in person.

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If the total par value of authorized shares does not exceed $100,000, or if no par value is used, and the total number of authorized shares is 5,000 or less, the filing fee is $120. If your stock exceeds these limits, you must pay a fee to the Maryland’s Department of Assessments and Taxation; call them at (410) 767-1340.

This document will go over the fundamentals of your business, such as: the name of the corporation, the street address, and the mission statement. The name, signature, and the street address of corporate’s resident agent. Lastly, it will also indicate the maximum number of authorized shares that a company can issue name(s) of the corporate director(s) and the name(s) and address(es) of incorporator(s).

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Step 5: Obtain an EIN for your Maryland Corporation:

What is an EIN number? The federal government uses an Employer Identification Number (EIN) or a Federal Tax Identification Number (FTIN) to identify a company’s entity. It's essentially the company's version of a social security number.

What is the purpose of having an EIN? For the aforementioned, an EIN is required:

• To open a bank account for the company.
• For the purposes of federal and state taxes.
• To hire employees for the corporation.

How to obtaining an EIN? The business owner obtains an EIN from the IRS (for free) after founding the company. This can be done online or by mail.

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