Maryland Business Express - What Every Maryland Business Owner Should Know

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If you are already doing business in Maryland or are considering doing so, there are many things you need to know. Whether you are a domestic company or a foreign business operating in our state, there is a great deal of information you need.

Maryland Business Express can help you with all of your company’s needs and guide you on how to stay in compliance. Here’s a quick overview of what every Maryland business owner should know.

Maryland Business Organizations

You need to choose which type of business structure your company will have. Maryland law allows these forms for business organizations:

• Sole proprietorship

• General partnership

• Corporation

• Limited partnership

• Limited liability partnership

• Limited liability limited partnership

• Limited liability company

There are different advantages and disadvantages among the business forms, including issues like taxation, liability, and the ease of forming and maintaining the business entity.

Foreign Companies Doing Business in Maryland

For purposes of doing business within Maryland, a foreign company is one that has its home location in another state or another country. Foreign businesses may operate independently by establishing a branch office in Maryland or in a joint venture with another firm organized in the United States.

Taxes in Maryland

In general, residents and businesses pay higher taxes in Maryland than in most other states. Some of the taxes Maryland imposes include:

• Corporate income tax

• Personal income tax

• Real property tax

• Sales and use tax

Businesses need to register for sales and use tax, unemployment insurance tax, and income tax withholding. With few exceptions, Maryland’s municipalities and counties do not levy local sales and use taxes. The state sales and use tax is 6 percent. There is a 9 percent sales tax on the sale of alcoholic beverages. There are multiple categories of business transactions that are exempt from Maryland’s sales and use tax.

Maryland Regulations on Mergers and Conversions

Maryland prides itself on its flexibility toward economic ventures. The options available for mergers and conversions are one example. Maryland business organizations and other foreign or domestic business entities are allowed to merge with or convert into organizational structures to create a new business entity of either a similar or different organizational structure.

Maryland Securities Law

Companies offering securities must comply with both the federal securities regulations and the Maryland Securities Act. The company must make full and complete disclosure about the company with sufficient information for potential investors to make informed business decisions.

How Labor and Employment Laws Work in Our State

Employers must follow both the federal and Maryland laws that apply to the workplace. Employers are subject to the Immigration Reform and Control Act (IRCA 1986) which requires employers to keep an I-9 form for each worker.

Federal and Maryland laws prohibit discrimination against job applicants or employees on the basis of race, color, national origin, sex (including pregnancy-related conditions), religion, age, disability, or genetic information. Maryland law also prohibits discrimination in the workplace based on sexual orientation, physical or mental handicap, or marital status.

Employers must follow the guidelines of federal law (the Occupational Safety and Health Act of 1970 or OSHA) and the Maryland Occupational Safety and Health Act (MOSH) to maintain a healthy and safe workplace. Maryland companies may purchase workers’ compensation insurance from the State Accident Fund, any company authorized to write workers’ compensation coverage in Maryland, or by self-insuring after getting the approval of the Maryland Workers’ Compensation Commission.

Consumer Protection Regulations

The Maryland Consumer Protection Act prohibits companies from engaging in deceptive or unfair practices in the offer or sale of consumer goods, credit, services, or real estate. The Act makes it illegal to make false or misleading representations in advertising or when making sales.

Maryland’s Consumer Protection Division has units that work closely between consumers and businesses, offering mediation and arbitration of disputes. The Division’s Health Education and Advocacy Unit helps with healthcare and insurance coverage disputes. Also, the Division has an Identity Theft Unit. Businesses that experience data breaches or losses involving the personal information of consumers are supposed to report the incidents to the Unit.

Maryland Law on Natural Resources

Forty-two percent of our total land area is covered with forests. We have over 2,300 miles of inland waterways. The Department of Natural Resources protects these resources as well as our Atlantic seaboard and the Appalachian Mountains. Businesses wanting to make commercial use of these natural resources must follow the Department’s regulations on the development of the forest and shoreline and commercial boating, wildlife, and fishing.

This information is but a small sampling of the wealth of topics you need to know about when doing business in Maryland. You can turn to Maryland Business Express for a wide variety of your company’s needs. For expert advice on navigating business ownership in Maryland, contact Steve Thienel today.