Most online guides treat starting a business as a single filing: pick a name, pay a fee, and receive a certificate. In Maryland, that filing creates the legal entity, but a business that sells goods, collects sales tax, signs a lease, or hires employees has several more registrations to complete, most of them with different agencies. Missing one rarely causes a problem on the first day. It causes problems months later, when a landlord asks for a use and occupancy certificate, a clerk asks for a trader’s license, the Comptroller sends a notice, or a co-owner leaves without any written agreement about what happens next.

This checklist walks through the steps in the order they usually make sense. Not every step applies to every business.

The first decision is the legal form of the business and how it will be taxed. For most closely held businesses, a limited liability company is the most flexible starting point, but the right answer depends on the owners, the profits, any outside investors, and the exit plan. Our guide on choosing a business entity in Maryland walks through LLCs, S corporations, C corporations, and partnerships in detail, including the Maryland tax rules that affect the choice.

If more than one person is involved, settle the business deal before anyone files anything:

• Who owns what percentage, and what is each owner contributing in money, property, or work?
• Who makes day-to-day decisions, and which decisions require everyone’s consent?
• How and when will profits be distributed?
• What happens if an owner wants to leave, stops working in the business, becomes disabled, or dies?

Businesses with an owner who lives outside the United States, or who plan to form in Delaware or another state, have additional decisions to make. Our guides on forming in Maryland, Delaware, or Wyoming and Form 5472 for foreign-owned LLCs cover those situations.

What SDAT requires

Under Corporations and Associations Section 1-504, the name of a Maryland entity “must be distinguishable upon the records of the Department.” Under Section 1-502, the name must also include the right designator:

• An LLC’s name must include “limited liability company,” “L.L.C.,” “LLC,” “L.C.,” or “LC.”
• A corporation’s name must include “Corporation,” “Incorporated,” “Limited,” or “Company” (the last only if not preceded by “and” or an ampersand), or an abbreviation of one of those words.

You can check availability through SDAT’s business entity search and, if you are not ready to file, reserve a name for 30 days under Section 1-505, for a $25 fee under Section 1-203.

What SDAT acceptance does not do

SDAT’s approval of a name means only that it is distinguishable from other names on SDAT’s records. It does not mean no one else has rights in the name. Another business, in Maryland or elsewhere, may own a federal or state trademark, or common-law rights from prior use, that a new business’s use of a similar name would infringe. SDAT says something similar about trade name filings: its trade name application states that “Acceptance of a trade name application does not confer on the owner any greater right to use the name than he otherwise already has.”

Before investing in signs, a website, and marketing, search:

• the U.S. Patent and Trademark Office’s trademark database,
• Maryland’s state trademark register, maintained by the Maryland Secretary of State,
• internet search results and domain names, and
• businesses in the same industry and region using similar names.

A business that wants protection for its brand can register a mark with the Secretary of State under the Business Regulation Article, which the Secretary of State describes as giving “public notice of a person’s claim of ownership of the trademark or service mark,” or seek federal registration with the USPTO for broader protection.

Trade names

If the business will operate under a name other than its legal name, such as “Main Street Bakery” for “Smith Ventures, LLC,” Maryland’s trade name statute, Corporations and Associations Section 1-406, may require a trade name certificate filed with SDAT before the business begins operating under that name. The statute applies to persons engaged in a “mercantile, trading, or manufacturing business” who do business under a name other than their own. A certificate costs $25 and is effective for 5 years. Registering a trade name creates no entity, no liability protection, and no trademark rights.

Most Maryland entities are formed online through Maryland Business Express, the State’s online portal for forming and registering businesses. An LLC is formed by filing articles of organization, and under Section 4A-202, it comes into existence when SDAT accepts the articles for record or at a later time stated in the articles. A corporation is formed by filing articles of incorporation.

Maryland Business Express adds a convenience fee to online filings. Confirm current amounts on SDAT’s fee schedule before filing.

The resident agent

Every Maryland LLC and corporation must have a principal office in Maryland and a resident agent, who must be an individual residing in Maryland or a Maryland corporation, LLC, or limited partnership. The resident agent receives lawsuits and official notices. An owner who lives in Maryland can serve as his or her own resident agent, but should do so only if the address stays current and someone actually checks the mail. A lawsuit served on SDAT because the resident agent could not be found can lead to a default the owner never sees coming, as explained in our guide on what to do when your business is sued in Maryland.

Maryland does not require an LLC to have a written operating agreement. Under Section 4A-402, unless the articles of organization specifically require otherwise, an operating agreement need not even be in writing. Without one, the default rules of the Maryland LLC Act govern how decisions are made, how profits are shared, and what happens when a member leaves, and those defaults rarely match what the owners actually intended.

At a minimum, the founding documents should address:

• ownership percentages, capital contributions, and what happens if more money is needed;
• management authority and the decisions that require a vote or unanimous consent;
• distributions, including distributions to cover owners’ taxes on pass-through income;
• restrictions on transferring ownership, and buyouts on death, disability, departure, or deadlock;
• ownership of the business’s intellectual property, including work the founders did before the entity existed; and
• how disputes will be resolved.

For a corporation, the equivalent documents are the bylaws, the initial board and stockholder actions, and a shareholders’ agreement. Our guides to the Maryland LLC operating agreement, buy-sell agreements, and business partnership agreements explain what each should cover.

Employer identification number

Most businesses need a federal employer identification number (EIN) to open a bank account, hire employees, and file tax returns. The IRS issues EINs online and free of charge, and states that “You never have to pay a fee for an EIN.” Be cautious of websites that charge to obtain one.

A separate bank account

Open a business bank account in the entity’s name before the business takes in or pays out money. Commingling personal and business funds undermines the liability protection the entity is supposed to provide, as our guide on piercing the corporate veil explains, and makes bookkeeping and tax compliance harder.

Beneficial ownership reporting

Many older guides tell new businesses to file a beneficial ownership information (BOI) report with the Financial Crimes Enforcement Network (FinCEN) under the Corporate Transparency Act. That advice is out of date for domestic companies. FinCEN announced on August 11, 2026 that it had finalized its BOI reporting rule. FinCEN’s BOI page now states that “U.S. companies are exempt from the Beneficial Ownership Information (BOI) reporting requirements” and that the final rule became effective on August 14, 2026. The final rule makes permanent the exemptions in an interim final rule published on March 26, 2025. Foreign companies registered to do business in the United States remain subject to reporting obligations. Check FinCEN’s BOI page for the current rules, and be wary of solicitations that claim a U.S. company must pay to file.

Maryland business tax accounts are opened through the Comptroller’s Combined Registration Application (CRA). According to Maryland Business Express, “New businesses can file the CRA online using Maryland Business Express,” and “New or existing businesses can register and/or make updates at the Maryland Tax Connect website.” The CRA covers accounts including sales and use tax, employer withholding, admissions and amusement tax, the tire recycling fee, and transient vendor licenses. Certain specialized accounts, such as motor fuel, alcohol, and tobacco, are handled through Maryland Tax Connect.

Sales and use tax

Under Tax-General Section 11-702, a person “shall be licensed by the Comptroller” before engaging in business as a retail vendor in Maryland, which includes selling taxable goods, digital products, or taxable services. The general Maryland sales and use tax rate is 6%. Since July 1, 2025, certain data, information technology, and software publishing services have been subject to a 3% rate. However, the applicable rate depends on the nature and use of the product or service. For example, certain software-as-a-service (SaaS) transactions may be taxed at 6% rather than 3%, particularly when purchased for individual rather than qualifying enterprise use. Businesses offering software or technology services should carefully determine the applicable classification, rate, and exemptions. Our guide on Maryland’s 3% tax on IT and software services explains which services are covered.

Employer withholding

A business that pays wages must withhold Maryland income tax under Tax-General Section 10-906 and remit it to the Comptroller, which requires a withholding account. Owners of a corporation who work in the business are generally employees for this purpose, which matters to S corporation owners who must take a reasonable salary.

Maryland does not issue one license that covers every business. Instead, a business may need one or more of three kinds of licenses, depending on what it does and where:

• Licenses issued by the Clerk of the Circuit Court under Title 17 of the Business Regulation Article, the most common of which is the trader’s license;
• Occupational and professional licenses issued by state boards and agencies for regulated professions and trades, such as home improvement contractors, electricians, plumbers, real estate licensees, cosmetologists, and health care providers; and
• Local licenses and permits required by the county or municipality.

Maryland’s OneStop portal describes itself as “the central hub for Maryland State licenses, forms, certificates, permits, applications, and registrations,” and Maryland Business Express maintains a licenses and permits guide.

The trader’s license

Under Business Regulation Section 17-1803, a person must have a trader’s license to do business in Maryland as a trader, and each store or place of business that the person operates in Maryland needs its own license. A “trader” is defined in Section 17-101 as “a person who operates a room or other place of business for selling goods, including goods sold at auction,” and “goods” include tangible personal property and merchandise sold at wholesale or retail. Retail stores, wholesalers, and many other businesses that sell products from a location need one. Exemptions include growers, makers, and manufacturers, among others listed in the statute, and the subtitle does not apply to the sale of alcoholic beverages.

• Who issues it. The Clerk of the Circuit Court for the county where the business is located, or for Baltimore City.
• What it costs. Under Section 17-1807, the fee is based on the value of the applicant’s stock-in-trade, ranging outside Baltimore City and Baltimore County from $15, if the value is not more than $1,000, up to $800 for the largest inventories, with different schedules in Baltimore City and Baltimore County. Some jurisdictions have adopted a uniform fee instead. In a county or municipality that has not adopted a uniform fee, a new applicant must give the clerk a certification from SDAT, or another certification acceptable to the clerk, of the stock-in-trade value reported on the business personal property return.
• When it expires. Under Section 17-305, a license expires on the first April 30 after its effective date, so the license year runs from May 1 through April 30 regardless of when the license was purchased. Late applicants owe additional fees.
• Renewal conditions. Renewal requires certification that there are no unpaid State or county taxes on the business’s fixtures or stock-in-trade, which ties the license to the business’s personal property return.

Title 17 also requires other clerk-issued licenses for specific activities, so a business should confirm with the Clerk of the Circuit Court which license or licenses apply. As the Montgomery County Circuit Court puts it on its business license page, “It is your duty to determine which license(s) your business requires.”

Occupational and professional licenses

Regulated professions and trades are licensed by state boards, many of them within the Maryland Department of Labor. These licenses often attach to individuals rather than the entity, and some industries impose ownership or supervision requirements as well. Our industry guides for construction contractors, restaurants, and medical and dental practices cover the licensing rules for those industries.

Zoning and building permits are handled locally. Before signing a lease, confirm that the business’s use is permitted at that location and that the space has, or can obtain, the required use and occupancy certificate. In Montgomery County, for example, the Department of Permitting Services explains that when a business moves into an existing space, “the new space must have a valid Use & Occupancy certificate,” and that a “Change of Use” building permit is required if the business does not match the current use. In Baltimore, Cecil, Howard, and Calvert Counties, Business Regulation Section 17-1805 requires local zoning approval before the clerk issues a trader’s license, subject to county-specific conditions (in Calvert County, also for a change of location). Maryland Business Express advises business owners to contact their county’s office of inspections, licensing, or permits for local requirements.

The lease itself deserves careful review. Commercial leases commonly shift repair, compliance, and build-out costs to the tenant and require a personal guarantee from the owners. A tenant that signs before confirming zoning and occupancy can end up paying rent on a space it cannot legally use. Our guides on commercial lease review and personal guarantees explain what to negotiate.

Home-based businesses are not automatically exempt. Many local zoning codes regulate home occupations, including customer visits, signs, employees, and storage, and residential leases and homeowners association rules may impose their own limits.

Hiring the first employee triggers a group of obligations at once. Many of them apply with a single employee.

Workers’ compensation penalties

Failing to carry workers’ compensation is not a paperwork issue. Under Labor and Employment Section 9-407, the Workers’ Compensation Commission may order an uninsured employer to pay a penalty of up to $25,000 to the Uninsured Employers’ Fund, and, if the business’s assets are insufficient, an officer of a corporation, or a member of an LLC, who has general management responsibility in Maryland and knowingly failed to secure coverage can be jointly and severally liable for it. Under Section 9-1107, failing to secure coverage is also a misdemeanor punishable by a fine of up to $5,000, imprisonment of up to 1 year, or both.

Paid family and medical leave

Maryland’s Family and Medical Leave Insurance (FAMLI) program is scheduled to begin collecting contributions on January 1, 2027, under Labor and Employment Section 8.3-601. According to the Maryland Department of Labor’s paid leave program, the total contribution rate has been set at 0.9% of wages, employers may withhold up to half from employees’ wages, employers with fewer than 15 employees are not required to pay the employer share, and benefits are scheduled to begin January 1, 2028. Employers with Maryland employees must register with the program. These dates have been delayed before, so check the program’s site for the current schedule.

MarylandSaves

Under Labor and Employment Section 12-402, a covered employer that does not offer its own retirement plan must establish a payroll deduction arrangement through the MarylandSaves program and automatically enroll covered employees unless they opt out. Employers that have not been in business for the entire current and preceding calendar year, among others, are excluded. The statute’s stated consequence of noncompliance is the loss of the waiver of SDAT’s $300 annual report fee, which is available to employers that participate in MarylandSaves or offer a qualifying retirement plan.

Employees or contractors?

Calling a worker an independent contractor does not make the worker one. For Maryland unemployment insurance purposes, Labor and Employment Section 8-205 generally treats work performed under a contract of hire as covered employment unless the worker is free from control and direction, is customarily engaged in an independent business of the same nature, and performs the work either outside the hiring business’s usual course of business or outside any of its places of business. Other legal tests may apply under Maryland wage-and-hour laws, workers’ compensation law, and federal employment tax rules. Businesses should evaluate worker classification under each applicable law rather than relying solely on the contract’s designation. Our guides on worker misclassification and the Maryland Wage Payment and Collection Law explain the risks for employers.

Insurance

Beyond workers’ compensation, most businesses should discuss with a broker general liability, property, commercial auto, professional liability or errors and omissions, cyber, and, for businesses with employees, employment practices liability coverage. Many leases, customer contracts, and lenders require specific coverage and require that the other party be named as an additional insured. Review those requirements before signing, not after.

Contracts

A new business’s first contracts often become its templates for years. Customer agreements, supplier terms, independent contractor agreements, and confidentiality agreements should address payment terms, limitations of liability, intellectual property ownership, dispute resolution, and attorney’s fees. Our guide to common contract mistakes covers the provisions that most often cause problems, and our guide on non-compete agreements in Maryland explains the limits on restricting employees.

If you are buying an existing business or a franchise rather than starting from scratch, the steps change. Our guides on buying a business in Maryland and reviewing a franchise agreement cover those transactions.

Under Tax-Property Section 11-101, the annual report is due on or before April 15 of each year. Businesses that own, lease, or use Maryland business personal property with a total original cost of $20,000 or more generally must also complete the applicable personal property reporting section, while businesses below that threshold may qualify for the low-assessment exemption, subject to applicable reporting and certification requirements.

An entity that fails to file its annual report can forfeit its charter or its right to do business in Maryland, which can affect contracts, financing, and the ability to bring lawsuits. Our guide on SDAT forfeiture and reinstatement explains how to fix it, but it is far easier to calendar April 15 and never need it.

• Operating with a co-founder before forming the entity, and becoming a general partnership with personal liability.
• Assuming SDAT’s acceptance of a name means the name is safe to use without checking trademarks.
• Skipping the operating agreement or downloading a generic form that does not match the owners’ actual deal.
• Signing the lease in an owner’s own name, or before the entity exists.
• Signing a lease before confirming zoning and the use and occupancy certificate.
• Making taxable sales before obtaining a sales and use tax license.
• Overlooking the trader’s license because Maryland does not have a single general business license.
• Hiring the first employee without workers’ compensation coverage.
• Treating workers as independent contractors without analyzing whether they qualify.
• Mixing personal and business funds in the same account.
• Paying for a federal BOI filing that a domestic company no longer has to make.
• Missing the April 15 SDAT annual report and falling out of good standing.

It depends on what the business does. Maryland does not issue a single license that covers every business. Many businesses that sell goods from a place of business need a trader’s license from the Clerk of the Circuit Court, regulated professions and trades need occupational licenses from state boards, and counties and municipalities may require their own permits. Maryland’s OneStop portal, Maryland Business Express, and the Clerk of the Circuit Court for your county can help identify which licenses apply.

A trader’s license is issued by the Clerk of the Circuit Court under Title 17 of the Business Regulation Article. Under Section 17-1803, a person must have one to do business as a trader, meaning a person who operates a room or other place of business for selling goods, and each store or place of business that the person operates in Maryland needs its own license. The fee is based on the value of the business’s stock-in-trade, and the license expires on April 30 each year. Exemptions include growers, makers, and manufacturers, among others.

SDAT’s filing fee for articles of organization is $100, with optional fees for expedited processing and a convenience fee for online filing. Every Maryland LLC must also file an annual report by April 15 each year with a $300 fee, unless a fee waiver applies. Depending on the business, there may also be trader’s license fees, occupational license fees, local permit fees, resident agent fees, and legal fees for an operating agreement.

No. SDAT accepts a name if it is distinguishable from other names on SDAT’s records and includes the required designator, such as “LLC.” That does not give the business trademark rights or protect it from claims by a business with prior rights in a similar name. Before investing in a brand, search federal and state trademark records and consider registering the mark with the U.S. Patent and Trademark Office or the Maryland Secretary of State.

If the business operates under a name other than its own legal name, Corporations and Associations Section 1-406 may require a trade name certificate filed with SDAT before the business begins operating under that name. The statute applies to persons engaged in a mercantile, trading, or manufacturing business. The certificate costs $25 and is effective for 5 years. A trade name registration does not create an entity, limit liability, or provide trademark rights.

Yes, if the business will make taxable sales in Maryland. Under Tax-General Section 11-702, a person must be licensed by the Comptroller before engaging in business as a retail vendor, which includes selling taxable goods, digital products, or taxable services. New businesses register through the Combined Registration Application, available through Maryland Business Express and Maryland Tax Connect. Certain information technology and software services have been subject to a 3% rate since July 1, 2025, though some software-as-a-service transactions may be taxed at 6%.

Not if it was created in the United States. FinCEN finalized its BOI reporting rule effective August 14, 2026, exempting U.S. companies from the Beneficial Ownership Information reporting requirements. Foreign companies registered to do business in the United States remain subject to reporting obligations. Be cautious of solicitations claiming that a domestic company must pay to file a BOI report.

Generally, as soon as the business has an employee. Labor and Employment Section 9-402 requires each employer to secure compensation for all covered employees, and, outside a few categories such as certain small farm employers, there is no minimum number of employees. Failing to secure coverage can result in a penalty of up to $25,000 under Section 9-407 and criminal penalties under Section 9-1107. Coverage should be in place before the first employee starts work.

Every Maryland LLC, corporation, limited partnership, and LLP must file an annual report with SDAT by April 15. The fee is $300 for LLCs, stock corporations, limited partnerships, and LLPs, unless a waiver applies, and nonstock corporations generally have no annual report filing fee. Businesses with Maryland business personal property may have reporting obligations on that return. Sole proprietorships and general partnerships may need to file a personal property return on Form 2. Trader’s licenses expire each April 30, and sales tax and withholding returns are due on the schedule the Comptroller assigns.

The law does not require one, and many owners file their own articles through Maryland Business Express. The value of counsel is in the decisions around the filing: choosing the right entity and tax classification, documenting the deal among co-owners, protecting the brand, reviewing the lease and guarantees, and setting up contracts that will be used for years. Those are the issues that most often lead to disputes, tax problems, and lost value later.