The advantages of incorporating or forming an LLC in Maryland:
Corporations (Inc.)
Corporations are a very common form of business organization. As discussed in the "how to" section below, you can form a corporation in Maryland, or another state, by filing certain documents with the appropriate state office and paying the registration fee. After you have done so, you will have "formed" the corporation, and it can do business just as if it were a human being, for most legal purposes. Thus, corporations are entitled to own property, borrower or lend money, sign contracts, buy and sell merchandise, sue and be sued, etc. Of course, corporations cannot act on their own. They must act through their "agents," who will typically be the "officers," and "directors" of the corporation. The corporation is owned by shareholders (persons who own shares of stock in the corporation). These shares of stock can be sold to investors to raise money. If the corporation makes a profit, the profit can be distributed to shareholders as a "dividend" or similar distribution.
Advantages: There are two principal advantages of using the corporate form:
Limited Liability. The owners (shareholders) and agents of the corporation (officers and employees) are typically shielded from personal liability for debts of the corporation. Thus, in the usual case, the shareholders or officers or other employees of the corporation are not liable for rent on a corporation?s office lease. Nor would they be personally liable to repay loans to the corporation (unless they had agreed to be in a separate agreement called a "guarantee").
Investment Opportunities. The second important advantage of forming a corporation is that it is much easier to raise money (capital) to operate the business because the corporation can sell shares of stock to investors. While stock sales are often subject to complex anti-fraud and similar rules (both state and federal), such sales are an extremely important way to raise money to run the business.
Forming a Limited Liability Company (LLC)
LLCs are a relatively new form of business organization. They are designed to combine the advantages of corporations and partnerships with few of their disadvantages.
Advantages:
LLCs have the advantages of limited liability associated with corporations, but they do not pay separate income tax. Instead, they are generally treated like general partnerships for tax purposes.
Forming an LLC in Maryland
- Composite filing available
- Non-resident members may apply the amount withheld and paid by the LLC to their Maryland individual income tax
Business incentives in Maryland
Maryland offers a long list of tax credits to encourage new or existing businesses to invest or grow in the region.
The following tax credits apply:
- Business that Create New Jobs Credit
- Clean Energy Incentive Tax Credit
- Commuter Tax Credit
- Electric and Gas Utility Tax Credit
- Employer-Provided Long-Term Care Insurance Credit
- Employment Opportunity Tax Credit
- Enterprise Zone Tax Credit
- Green Building Tax Credit
- Heritage Structure Rehabilitation Tax Credit
- Job Creation Tax Credit
- Long-term Employment of Ex-Felons Tax Credit
- Maryland Disability Employment Tax Credit
- Maryland-Mined Coal Tax Credit
- Neighborhood Partnership Program Tax Credit
- One Maryland Economic Development Tax Credit
- Research and Development Tax Credit
- Telecommunications Property Tax Credit
- Water Quality Improvement Credit
- Work-Based Learning Program Credit
Other tax advantages of Maryland include:
- No gross receipts tax on manufacturers
- No corporate franchise tax
- No unitary tax on profits
- No income tax on foreign dividend, if the corporation owns 50 percent or more of the subsidiary
- No separate school taxes
Maryland offers a variety of tax and financing incentives to enhance business development opportunities in the state. Many of the programs offer attractive incentives to encourage development in the state's "smart growth" areas.
- Companies locating in a "One Maryland" jurisdiction may qualify for considerable income tax credits.
- Companies locating in the targeted areas receive favored consideration for other project support such as low cost financing and new employee training grants.
|
Incorporate your business 
Legal entities explained 
Our service
Incorporate in Your State
