Incorporate in Maryland for FREE^*

Incorporation is the process of registering a business as a corporation and making it recognizable under law as its own legal entity. Incorporating a business can be a complicated process because each state has its own requirements for registering and operating a business as a corporation. Knowing the necessary steps and forms, however, will help keep you organized and stress-free. 

With our easy business registration service, you simply answer a few questions and we create your initial paperwork and file it with the state for you. The first business entity registration is free for Rocket Legal+ members—you pay only the state filing fees. Then, you can make and personalize all the legal documents you need for your business. Store everything online in your Rocket Lawyer account.

What is a C-Corp? 

A C-Corp, or C-Corporation, is a common business entity type. More specifically, a C-Corp is a corporation taxed under Subchapter C of the U.S. Code. Under Subchapter C, corporations are subject to tax at both the corporate and individual level (sometimes called “double taxation”). Depending on the situation, this may result in lower or higher tax burdens for the shareholders. 

C-Corps allow for anyone to be an investor and for an unlimited number of shareholders and multiple share classes.

As with other types of corporations, C-Corporations provide a common and well-known legal structure for businesses and offer their shareholders some limited liability. Except for certain instances of fraud or misconduct, a shareholder is not liable for the debts or obligations of a corporation beyond the shareholder's investment into the corporation.

Corporations are treated as a C-Corp by default, unless another type of tax treatment is selected, such as an S-Corp.

What is an S-Corp? 

Like C-Corps, S-Corps provide a common and well-known legal structure for businesses and offer their shareholders some limited liability. However, S-Corps have two main differences from C-Corps: they are taxed differently and they have more restrictions with shares.

An S-Corporation, or S-Corp, is an IRS election that allows a company to be treated like an LLC for income tax purposes, that is, as a “pass-through" entity. Instead of income taxes being owed at both the company and individual level, the income of an S-Corp is only taxed at the individual level, which means it passes through the company directly to the owners and shareholders. Again, this may result in lower or higher tax burdens for the shareholders depending on the situation.

S-Corps have more restrictions regarding shares and shareholders than C-Corps. Specifically, S-Corps can have no more than 100 shareholders, only one class of shares, and only U.S. residents or citizens as investors.

One area of common confusion is what type of entity can elect S-Corp status. Remember that this election is simply a tax choice, not a governance or legal structure choice. Both limited liability companies (LLCs) and corporations can choose S-Corp status if they qualify under the IRS's guidelines.

There are similarities between a Maryland S-Corp and a C-Corp regarding personal liability, management, structure, and compliance. The differences in Maryland, however, come down to the following:

• Ownership Rules: A C-Corp can have unlimited shareholders and unlimited stock classes. An S-Corp is restricted to a maximum number of shareholders, usually 100, and only one class of stock.
• Taxes: A C-Corp is taxed separately. It pays taxes at the corporate level, and individual dividends to shareholders can also be taxed. S-Corps are considered "pass-through" tax entities. This means that no taxes are paid at the corporate level. Instead, taxes are paid individually by the owners.
• Documents: An S-Corp must file IRS Form 2553 to gain S-Corp status.

Your corporation’s name should be unique and make a statement about your business. Make sure it complies with the following Maryland requirements:

• Your name must Include "Corporation," "Incorporated," "Limited," "Inc.," "Corp." or "Ltd."
• Don't use a deceptive name. Don't name your Maryland corporation "Joe's Hotdogs" if you're selling automobiles.
• Your name should not be deceptively similar to that of an existing business name in Maryland. A corporation's name must be distinguishable from all other recorded entities in the state. Make sure your name meets this requirement by conducting a name search online at the Maryland State Department of Assessments and Taxation, or call the Department at (410) 767-1330 for a non-binding check.

Need help coming up with a business name for your corporation? Try the Rocket Copilot™ AI Business Name Generator, a free tool to help you brainstorm business names and get started registering your corporation. 

Each state has its own personnel requirements for incorporating. In Maryland, personnel must be at least 18 years of age, but incorporators are not required to reside in Maryland. They are entitled to receive mail and notice in any jurisdiction, even in foreign countries. The same is true for directors.

Maryland allows single-director corporations.

Every Maryland corporation is required to appoint a registered agent. A registered agent is responsible for receiving tax, legal, and government documents on behalf of a corporation during regular business hours. Registered agents must have a physical address in the state, not a post office box. The agent must be included in the Articles of Incorporation. It can be a citizen of Maryland or a business in Maryland, but it can't be the corporation itself. We'll help designate a registered agent when you incorporate in Maryland using our services.

The Articles of Incorporation for a Maryland stock corporation must include information about the number of shares of stock the corporation will have authority to issue. The Articles must also include information about the par value of each share of stock. If the aggregate par value—the number of stock shares times the par value—is greater than $100,000, or if more than 5,000 shares of stock without par value are used, then the state's filing fee is higher than the minimum filing fee assessed to corporations. If stock without par value is used, incorporators must insert "$0" as the share's par value in their Articles of Incorporation. Stock is required if a corporation seeks to maximize various tax options and benefits.

The Articles of Incorporation for a Maryland stock corporation also require a disclosure about the nature of its business. Maryland suggests one or two sentences at most.

Maryland requires that corporations file additional documents with their Articles of Incorporation. The Maryland Department of Assessments and Taxation, Personal Property Division has prepared and assembled the forms needed in a booklet. Maryland corporations must complete and file these forms annually. They include:

• Personal property tax return.
• Combination Form 4A, Balance sheet.
• Form 4B, Depreciation schedule.
• Form 4C, Disposal and Transfer Reconciliation.

To make changes after a business's initial incorporation, the Maryland Department of Assessments and Taxation has forms available. These include forms for changing your registered agent and/or principal place of business and an Articles of Amendment form for amending the charter of a Maryland corporation in specific ways.

Maryland also requires corporations to file annual reports. The state charges a filing fee for these reports.

Nearly every state has standard processing times, but not all provide expedited processing for corporations. In Maryland, there are a few fees that you may be charged when you register your business as a corporation. They include the following:

State fee: $176.

Rocket Lawyer filing fee: $0 $99.99.

• First filing FREE* for Rocket Legal+ members (excluding state fees).
• Get additional filings HALF OFF with Rocket Legal+.

Processing time: 7-10 business days.

Note: The above state fees and processing times (including expedited processing fees and times) are provided as a summary and may or may not encompass various fees mandated by your state or local authorities. Your state may also change these fees and processing times over time and without notice. If you have questions, speak to a Rocket Lawyer Business Pro to understand the costs and processing times that apply to your specific filing.

Businesses can save up to $2,500 per year with a Rocket Legal+^™ membership. This calculation is based on total savings on an initial business registration and registered agent, trademark, and business tax filing services for Rocket Legal+ members (a total cost of $924.97) compared to Rocket Legal members (a total cost of $1,949.96). This is in addition to savings on the average cost of 5 hours for document preparation by a non-Rocket Lawyer network attorney at the average attorney hourly rate in the U.S. of $300 (an estimated cost of $1,500 when purchased without any form of Rocket Lawyer membership) compared to unlimited use of customizable business documents for both Rocket Legal+ and Rocket Legal members at no extra cost.

Yes – although it's not the most entertaining part of owning a business, you'll have to pay taxes for your new Maryland corporation. Before opening your doors for business, apply to the IRS for an employer identification number, or EIN. An EIN is similar to a Social Security number, but it's for businesses. All corporations that have or will have employees require one. Many larger banks require EINs to open corporate banking accounts as well.

We have more information about the tax structures of Maryland S-Corps and C-Corps.

Maryland corporations are subject to a tax penalty of 1/10 of 1 percent of the county assessment if they file their annual personal property tax return after the due date of April 16. This is on top of interest charged at the rate of 2 percent of the initial penalty amount for each 30 days or the portion of 30 days that the return is late. Maryland corporations that do not file personal property returns will receive estimated assessments that are twice the estimated value of the business's owned personal property.

Maryland requires corporations to create certain records, such as Bylaws and Corporate Minutes, to maintain corporate status. It's recommended that you keep these documents regardless of whether Maryland technically and officially requires them. They help protect the legality of your corporate status. We have all the Bylaws and Meeting Minutes requirements for Maryland.

We wish you success with your new Maryland corporation! You can count on Rocket Lawyer for all the business, tax, and legal help you need at a price you can afford.

If you are planning to operate in another state, you may need to register a corporation in that state. Rocket Lawyer can help you determine which states you should register in.

Other states may have their own rules for foreign corporations that originate in Maryland or domestic corporations that also operate in Maryland. Talk to an attorney to understand the legal and tax requirements for the state(s) in which you plan to operate.