The lifeblood of Maryland’s economy is small business. According to the most recent Small Business Administration (SBA) data, over a million small businesses (defined as fewer than 500 employees) existed in the state in 2019. The vast majority of those businesses do not have employees but rather are individuals providing goods and services on their own.
Fortunately small businesses have shown stability and growth throughout the past several years in the state. In the State of Maryland, the opportunity to start and grow a business is present if done correctly. Preparation, including forming a professional business plan to attract investors and obtain a competitive strategy is paramount. Investing in marketing, avoiding the common mistake of overspending, and setting goals may provide a start-up with a competitive edge.
Another very important step is forming a proper business entity for your start-up to best meet the needs of your business. Note that considerations should include whether your business will need to raise capital (and if so, how much), whether any other individuals or entities will contribute to the running of the business, and tax considerations.
Starting a new business in Maryland can be quite challenging. You have to consider the structure of your business, individual state tax laws, and any benefits of incorporating in a different state. Entrepreneurs often assume they should instead go with Delaware or Nevada since these two states are known for being business-friendly. Delaware’s flexible, pro-business laws and Nevada’s low taxes can be tempting for those looking to start-up a business.
In comparison, Maryland may seem less appealing for business formation. But if your business has a physical presence in the state, registering here could save you not only money but also time and energy that could be better spent in actually running your business.
If you intend to run a business under a different business name in Maryland, you’ll need to file a DBA, or ‘Doing Business As.’ If the owners of a company want to do business using a name that is different from the original name used to form the business, they must register the secondary name. For sole proprietorships and partnerships, the original name is the actual name of the owner or partners.
Note that under Maryland law, a domestic entity is expected to record its name by filing a trade name with the State of Maryland’s Department of Taxation and Assessment. Foreign corporations (corporations not organized under the laws of Maryland) can file for an assumed name and are expected to file for DBA when they wish to operate within Maryland but find their current name is not available. This is because Maryland law prohibits the use of a name that is identical to one already registered by a business and is in use.
Step By Step Guide to Filing a DBA in Maryland
Maryland law states that any domestic entity should by law register its DBA (Doing Business As) or assumed name with the State of Maryland’s Department of Taxation and Assessment. Foreign corporations also by law can register their assumed name if they wish to run their business in Maryland. As per the Maryland law, no business can adopt a business name that has been already registered. Howbeit, to properly register a DBA in Maryland, here are steps to follow.
Check for Name Availability
The first step includes searching for the availability of the name in the Charter Record Search database. Simply put, you will need to find out if the selected assumed name has been already registered. If it is already taken and is in use, the name will have to be changed. By law, a business is expected to bear a unique name.
Also have in mind that Maryland prohibits the use of certain names and phrases, for instance, corporations are not allowed to create names that are misleading or state the purpose which contradicts the purpose stated in their format documents.
A corporation is expected to include a corporate designation like “incorporated”, “corporation,” or “limited”. No assumed name can incorporate a word or phrase which is different to its actual entity, for example, if a business is a “Partnership” entity, it cannot use “incorporated”.
Obtain Trade Name Application Form
Once the assumed name is cleared to use, you will have to obtain a trade name application form from the Department of Assessments and Taxation website. Required information for filling out these forms will vary slightly from entity to entity, but generally it requires the name of the entity, the principal place of business, and the assumed business name that will be used. Sole proprietorships and partnerships will need to provide the names and addresses of all owners of the business entity.
At this point, you can choose to file your DBA application in person, by mail, or by fax. The filing fee is $25. Include a check for this amount payable to the Department of Assessments and Taxation. To file by mail, send to:
Department of Assessments and Taxation
301 W. Preston Street, Room 801
Baltimore, MD 21201
To file by fax, send the form to 410-333-7097. Include a cover sheet with your mailing address, telephone and fax numbers, credit card number, CVV code, and expiration date, and signature. You also can file in person at the Charter Division office, located at 301 W. Preston Street in Room 801, between 8:30 a.m. and 4:30 p.m. on weekdays.
Filing a business name in Maryland is a relatively simple process. The Department of Assessments and Taxation processes DBA filings within 10 weeks of receipt. To speed up the process, you have to pay an additional $50. This brings your total filing cost to $75.
If you file in person, your application will be processed while you wait. However, you are expected to arrive before 4:15 p.m. If you file by mail or fax, it will be processed within seven business days. Once approved by the Department of Assessments and Taxation, your DBA filing remains valid for five years.
Renew the filing for an additional five-year term within six months of the expiration date. If you fail to do so, DAT will terminate the alias. This means you will have to submit a new DBA application to resume using it.
- A Guide to Great Business ideas for the Future 2025 – 2030 - September 3, 2021
- How Long Do Cordless Drill Batteries Last in 2021? - August 2, 2021
- How Does the Use of Cargo Containers Benefit the Economy? - August 2, 2021