How to Open a Business in Maryland
If you already have a business idea in mind and a plan to execute it, the next thing you need to know is how to set up a business in Maryland. At Hispanic Entrepreneurs we explain why it is an attractive place for business and the steps to follow to legalize it.
Advantages of Starting a Business in Maryland Home Improvement Commission
Starting a business in MD has several advantages. In fact, one of the bases of its economy is small business, according to the Small Business Administration (SBA).
His government approved an expansion of the popular tax credit and the creation of another program to stimulate the activities of the technology industry. This can benefit state companies.
It has a prime location and is the closest Atlantic seaport to the Midwest. It has a skilled workforce, especially in science and technology, anchored in two booming metropolitan areas: Baltimore and Washington DC. Nearly 40% of residents have a bachelor's degree or higher.
It occupies the 12th place in the list of the best states to do business supported by its authorities. Bloomberg ranked it as a leader in gender equality due to the rise of women-led businesses in its territory.
For its part, Entrepreneur ranked Baltimore among the top ideal cities for minority entrepreneurs.
It has the highest average household income in the country, a low cost of living and tax advantages.
How to start a business in Maryland home improvement commission
Starting a business in Maryland is similar to starting a business in other states. But through its digital platforms, the process is simple and fast.
Choose the business structure
All businesses must choose the business structure under which they will operate. The four most common are sole proprietor, partnership, corporation, and limited liability company (LLC).
Each of them has its advantages and disadvantages in terms of liability limitations, tax incentives and financial benefits.
When choosing, consider your interests, available resources, skills, and why you want to open your business in this state. It is best to choose the one that best suits your business plan.
For more detailed information, visit the Maryland Department of Taxes and Fees website.
Register your business with a contractor license
You can register online at the Maryland Business Express portal, administered by the Department of Assessment and Taxation.
You have to search if the name is available and fill in the forms. According to the department, all business entities registered to do business in Maryland must file an annual report.
Depending on the chosen structure, the documentation will be different. They generally have to appoint a registered agent, apply for an employer identification number (EIN), and have a physical office.
Register and file taxes
It is also essential for the registration of new businesses in Maryland to register and file an income tax return. The rate is 8,25% of net income.
The Department of Assessments and Taxes establishes that companies are required to pay an annual tax based on the value of their property. For their part, counties and cities collect the tax based on the location of the tax. In addition, sales and use tax is required.
In contrast, Maryland does not levy a gross receipts tax on manufacturers, a franchise tax on businesses, or a unit profits tax. It has no tax on income from foreign dividends, nor on intangible assets and it separates schoolchildren.
In addition, the Secretary of State grants a wide variety of tax exemptions and credits to encourage new investors. You can read more about this topic in our note on Local and state taxes for businesses in the USA
Apply for licenses and permits
Do I need a business license in Maryland? The answer is yes, all businesses in the state must obtain a general business license in the city or county where you are located.
Sectors such as construction, banking, health, security, restaurants, the environment, hospitality and specific services are included in the list of those that need a business license in Maryland.
Professionals such as doctors and engineers, among others, do not need a business license in Maryland, but professional and occupational licenses.
If you are wondering how to get a business license in Maryland, you should apply through https://onestop.md.gov/. On this site, you can request the one you need according to the industry.
Get business insurance
Identify the type of insurance your business needs. The policy and type will depend on the size, number of employees, type of business or desired coverage. They can be life, health, disability, workers' compensation, auto, housing, and property.
But make sure you know exactly which one you need so you don't waste money. You can ask the Maryland Insurance Administration for advice.
Open a business bank account
The next step is to open a corporate or business bank account to separate personal assets from business assets. It will also help you keep better track of your income and expenses.
Maryland Contractor's License
Maryland contractor license requirements are divided between state and local governments. For new residential or commercial construction projects, applications must be made at the Circuit Court Clerk's Offices located in the counties.
Meanwhile, general contractor licenses for home improvement and other specialized areas are handled by the state government. The MD contractor license application process depends on the area in which you will be working.
For example, for construction, requirements vary by county, so contacting the Circuit Court Clerk's Office is essential.
While the MHIC license requirements in Maryland (home improvement) are:
- -Two years of verifiable experience in home improvement, construction, or related training.
- -Proof of financial solvency depending on the size of the business or purchase a bond.
- -If you represent a corporation, you must present the articles of incorporation and the certificate of good standing issued by the Department of Assessments and Taxes.
- -Submit a business name registration certificate with the license application and proof of $50.000 liability insurance.
- The duration of the Maryland contractor's license is two years from the date of issuance and the application fee is $370. For more information, visit the Maryland Home Improvement Commission website.
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