ABC’s of Business in Maryland
Introduction
Some basic concepts will help you in what to consider when starting your business and how to avoid common mistakes
Topics of Discussion
Assembling a professional team
Choice of entity
Common Mistakes
Resources
The Professional Team
Every business needs a team of professionals with which to consult
The types of professionals may vary by the type of business but should include: attorney, Certified Public Accountant, insurance broker and banker
To incorporate or not to incorporate, that is the question
Sole Proprietor v. Entity
Personal assets at risk v. ease
What are your long term goals?
Do you have employees?
Are you placing goods in the stream of commerce?
Cost now v. cost later
What is an entity?
The legally recognized form under which your business will operate.
Choice of Entity
There are several forms of business entities available in Maryland, including:
Corporation
Partnership
Limited Liability Company
Limited Partnership
Limited Liability Partnership
Limited Liability Limited Partnership
Most Common
The most commonly used entities for small business are:
Corporation
Limited Liability Company
Tax Advice
Get competent tax advice before choosing your entity
Always get tax advice before embarking on a major business decision
Exit Strategy
Must know from day one that you will likely outlive the entity
What are everyone’s rights and responsibilities upon retirement, death, divorce, disability, sale of interest?
Document, document, document
Limitations of Entities
Personal tax liabilities
Personal guarantees
Officers can be responsible for income, sales, and employee withholding taxes
Can not hide behind entity for personal actions
Trade names and Trademarks
A trade name is a alternate name used and owned by the entity/proprietor
A trademark is a word, symbol or combination that identifies that product or service with the entity or proprietor
® ™ K
Common Mistakes
Using an incorporation service
Cutting and pasting contracts from others in the industry
Not having a stockholders/member agreement
Not paying taxes
Not obtaining the proper license
Not properly signing formal documents
More Common Mistakes
Not paying employees overtime (not using a payroll service)
Not understanding intellectual property
Not having a business plan
Doing the deal and then calling the lawyer
No employee documentation
Resources at Center for Business & Technology Development
Small Business Development Center (SBA)
Business Resource Center (EDA)
SCORE (Service Corp of Retired Executives)
James Rouse Entrepreneurial Fund
Howard County Economic Development Authority
State of Maryland Economic Development Authority
Where to go from here
Assemble a team of professionals at the planning stages
Consult with your team regularly before, during and after start-up
Have an attorney form an entity if appropriate
Seek assistance from available resources
