Small Business Development Center of the Southern Maryland Region

 

 

FAQs

 

What kind of business should I establish?
What are the different types of businesses I can start?

Where can I find good resources to develop a business plan?
What kind of tax information do I need and where can I find it?

Does Maryland have a personal property tax for business?
How do I choose a name for my business?
Why are zoning ordinances and regulations important?

What are some financing basics?
Does the Maryland Department of Commerce offer any financing programs for new businesses?
What resources are available to help me do business with the state government?

What is Worker’s Comp Insurance and do I need it?
What is a Certificate of Status? How can I get one?

How can I find out what licenses I may need?
Where can I learn about importing and exporting?
Are there any additional regulations for an online business?

How do I start a non-profit organization in Maryland?
Where can I learn more about occupational safety and health regulations?

 

What kind of business should I establish?

When starting a business you must decide what form of business entity to establish. Financial implications vary based on which form of business structure you use. The four most common forms of business structure are the sole proprietorship, partnership, corporation and limited liability company. Learn more about each here.

 

Sole proprietorships or general partnerships require no legal entry formalities except compliance with state and local licensing and taxation requirements. One of these requirements is registering your business so that your business personal property can be properly assessed, and the business can obtain a state or local license if required.

 

For legal entities such as corporations, limited liability companies, limited partnerships and limited liability partnerships, Maryland offers several flexible options for organizing business activity. For information about registration requirements for legal entities, contact the State Department of Assessments and Taxation (SDAT) at (410) 767-1340.

 

Back to top.

 

What are the different types of businesses I can start?

Some possibilities include a home-based business, a franchise, buying an existing business, or if you're a foreign business — establishing a branch office.

Home-Based Business

More than half of all U.S. businesses are based out of an owner's home, according to the U.S. Small Business Administration. A home-based business is subject to many of the same laws and regulations affecting other businesses, such as zoning regulations and production restrictions. Be sure to consult with an attorney and your local, city and state departments of labor to find out which laws and regulations will affect your business.

Additional Resource:
SBA - Home-Based Businesses

SBA Blog Run Home-Based Business; Find Licenses and Permits

Franchises

A franchise is a legal and commercial relationship between the owner of a trademark, service mark, trade name, or advertising symbol and an individual or group wishing to use that identification in a business. The franchise governs the method of conducting business between the two parties. Generally, a franchisee sells goods or services supplied by the franchiser or that meet the franchiser's quality standards.

Additional Resource:
Franchise Directories and Evaluation

Buying an Existing Business

Many find the idea of running a small business appealing, but lose their motivation after dealing with business plans, investors, and legal issues associated with new startups. If you are discouraged by risky undertakings, buying an existing business is often a simpler and safer alternative.

Additional Resource:
SBA - Buying A Business

Establish a Branch Office (Foreign Businesses)

A foreign business planning to operate in Maryland may establish a branch office by registering or qualifying with the Maryland State Department of Assessments & Taxation. Learn more about all the great reasons to set up a branch office in Maryland.

 

Back to top.

Where can I find good resources to develop a business plan?

Planning is critical to successfully starting a business. A business plan generally projects 3-5 years ahead and outlines how the company will grow revenues. Once your business is up and running, you'll need to regularly review and update your plan to manage growth. The U.S. Small Business Administration (SBA) provides detailed topics to create a business plan. The Small Business and Technology Development Center Network and SCORE also provide guidance on creating a business plan.​For legal entities such as corporations, limited liability companies, limited partnerships and limited liability partnerships, Maryland offers several flexible options for organizing business activity. For information about registration requirements for legal entities, contact the State Department of Assessments and Taxation (SDAT) at (410) 767-1340.

 

Back to top.

What kind of tax information do I need and where can I find it?

 New businesses should contact the Internal Revenue Service (IRS) to register for:

A FEIN can also be established when using the Maryland Central Business Licensing and Registration Portal. The IRS provides business kits for three types of businesses: sole proprietorships, partnerships and corporations.

 

Back to top. 

Does Maryland have a personal property tax for business?

Yes, businesses must pay an annual tax based on the value of their personal property (furniture, fixtures, tools, machinery, equipment, etc.). The Department of Assessments and Taxation administers the valuation process while the counties and towns collect the tax based on the location of the property.

The department automatically registers corporations, limited liability companies, limited partnerships, and limited liability partnerships for this tax when these legal entities form. All other businesses (sole proprietorships, general partnerships) that own or lease personal property or need a business license are required to:

For information regarding personal property assessments, visit the State Department of Assessments and Taxation (SDAT) Personal Property Division.

 

Back to top.

 

How do I choose a name for my business?

Picking a name for your business requires much more than just creativity and a working knowledge of your target market. Thought must be given to state and local requirements and making sure you don't infringe upon the rights of someone else's business name.

 

When registering your business through the Maryland Central Business Licensing and Registration Portal, you can search against existing Maryland business names and register a business trade name with the Maryland Department of Assessments and Taxation.

 

You may also register a trademark with the Secretary of State's office. A trademark is a unique graphic symbol or logo associated with a business, which distinguishes it from another business or person. Click here to learn more about trademarks and do an online trademark search.

 

Additional Resources

U.S. Patent and Trademark Office - Trademarks

U.S. Patent and Trademark Office - Trademarks FAQs

Trademarks and Servicemarks – Maryland Secretary of State

Trade Name Application – Maryland Department of Assessments & Taxation

 

Back to top.

 

Why are zoning ordinances and regulations important?

Zoning laws come into play on every single real estate development, regardless of how big or small, so if you are thinking about buying property or making improvements to property you already own, be sure to understand the zoning restrictions before you commit to anything. One zoning use is typically not compatible with another. For example, a commercial building usually cannot be constructed on property that's zoned for residential uses.

 

Additional resources:
Local Departments of Planning

 

Back to top.

What are some financing basics?

There are two primary types of financing: equity financing and debt financing. Unfortunately, there is no such thing as "free" government or grant money to help you start your business. Family members, friends and former associates are all potential sources, especially when capital requirements are smaller.

 

Debt Financing

 

There are many sources for debt financing: banks, savings and loans, and commercial finance companies. The U.S. Small Business Administration (SBA) can also provide assistance to small businesses by providing credit insurance to small business lenders.  They do not lend directly to small businesses.

State and local governments have developed many programs in recent years to encourage the growth of small businesses in recognition of their positive effects on the economy. You should always check with your local economic development agency to see if they have local programs that you can use. Some the state's small business debt financing programs are listed below:

 

o             Maryland Small Business Development Financing Authority (MSBDFA)

o             Small, Minority, and Women-Owned Small Business Loan Fund (VLT) 

o             Maryland Economic Adjustment Fund (MEAF)

o             Maryland Industrial Development Financing Authority (MIDFA)

 

Back to top.

 

Does the Maryland Department of Commerce offer any financing programs for new businesses?

Yes, however businesses need to be registered and in good standing with the state. Visit our Funding and Incentives section to learn about programs like the Small, Minority, and Women-Owned Small Business Loan Fund (VLT) and Maryland Small Business Development Financing Authority (MSBDFA) loans geared towards small businesses. Other Commerce programs that may benefit small businesses include:

Back to top.

 

What resources are available to help me do business with the state government?

Here are some state contract certification requirements and opportunities:

  • Minority Business Enterprise Program (MBE)
    Encourages minority-owned firms to participate in the state procurement process. Current MBE law requires agencies to structure their procurements to try to achieve an overall minimum of 25% of the total dollar value of their procurement contracts directly or indirectly from certified MBE firms.
  • Maryland Procurement Technical Assistance Center (PTAP)
    Designed to help small and minority businesses identify, bid and perform on federal government prime and sub-contracts. The center also provides counseling and training
    services. PTAP is a program of the Maryland Small Business and Technology Development Center Network (SBTDC).
  • Small Business Reserve Program
    Committed to the growth and success of small businesses, which will be able to bid for state contracts without competing with larger, more established companies. Designated agencies will be required to award a minimum of 10 percent of their units' total dollar value of goods, supplies, services, maintenance, construction, construction related, architectural service and engineering service contracts to small businesses.

eMaryland Marketplace

eMaryland Marketplace (eMM), the State of Maryland's internet-based procurement system, is a business tool that provides an efficient means to improve vendor's access to State procurement information. eMM provides the means to publish solicitations via the internet to potential bidders, providing equal access to solicitation information and is also the resource for electronic bid submission. In addition, the system allows vendors to obtain bid results online once the due date and time for bid submission has passed.

 

Back to top.

 

What is Worker’s Comp Insurance and do I need it?

Maryland workers' comp law requires employers to purchase insurance to pay compensation to employees for work-related injuries, occupational diseases, or deaths, regardless of whether someone is at fault. This non-fault compensation is the employee's exclusive remedy against the employer for work-related injuries; the injured employee may not sue the employer in an attempt to recover greater compensation. The compensation available includes medical and rehabilitation expenses, a percentage of lost wages, and an amount for impairment of earning capacity.

 

Employers may obtain coverage for their employees in one of three ways:

  • State Accident Fund, a non-profit self-supporting agency of the State of Maryland.
  • Any company authorized to write this coverage in the state. To obtain a directory of licensed insurance companies, visit the Insurance Commissioner's website.
  • Self-insure with the prior permission of the Maryland Workers' Compensation Commission.

To learn more, visit the Workers' Compensation Commission website.

 

Back to top.

 

What is a Certificate of Status?  How can I get one?

When obtaining a license, a license renewal or a loan settlement, you are often required to obtain a "Certificate of Status" (generally called a "good standing" certificate) from the Maryland Department of Assessments and Taxation.  

 

When the Department issues a certificate verifying that a business entity is in "good standing," it means that all documents and fees required by law have been received, and that no other government agency has notified the Department that the entity is delinquent in tax payments.

 

Click here​ for easy steps to obtain a Certificate of Status.

 

Back to top.

 

How can I find out what licenses I may need?

Are you looking to start a construction, storage warehouse, or vending machine business? These are just a few of the businesses that require a special license. Visit Maryland’s Business License Information System (BLIS) to find out what licenses and permits you may need for your business. You can also check out the Comptroller of Maryland’s web site​ for business license information.

 

Back to top.

 

Where can I learn about importing and exporting?

Maryland’s Office of International Investment and Trade provides support to Maryland companies planning to enter new foreign markets or advance their export sales in their companies' existing foreign markets. 

 

Visit our Expand to International Markets page for more information about our ExportMD program, or call (410) 767-0685 to learn how to grow your Maryland business overseas. The World Trade Center Institute​ is another great Maryland resource to learn the international ropes.​

 

Back to top.

 

Are there any additional regulations for an online business?

From a licensing standpoint, an online business is not all that different than a business that has a physical storefront location. Maryland State agencies regulate certain goods and services that could be offered to the public over the Internet.

 

Back to top.

 

How do I start a non-profit organization in Maryland?

The Maryland Office of the Secretary of State provides detailed information on the steps needed to form a non-profit organization. Certain charitable, fraternal, educational and religious organizations in Maryland may be eligible for an exemption from state property tax if non-profit status is approved.  

 

​Organizations soliciting charitable contributions in Maryland are generally required to register with the Office of the Secretary of State as a charitable organization. Registration is required before soliciting in Maryland begins and continues on an annual basis. 

 

Maryland NonProfits​ 

Non-Profit Institute at The College of Southern Maryland

 

Back to top.

 

Where can I learn more about occupational safety and health regulations?

Maryland Occupational Safety and Health (MOSH), part of the Maryland Department of Labor, Licensing and Regulation, works to improve the safety and health of Maryland's working men and women in both the public and private sector by providing consultation services, outreach and educational programs, establishing partnerships, setting and enforcing standards, and encouraging continual process improvement in workplace safety and health.

 

MOSH offers a free consultative service​ designed to help employers recognize and control potential safety and health hazards at their worksites, improve their safety and health program, assist in training employees, and possibly qualify for a one-year exemption from routine OSHA inspections. This confidential service is primarily targeted for smaller businesses (less than 250 employees per establishment or 500 employees nationwide) in high hazard industries; such as manufacturing, healthcare, and construction.

 

Back to top.

 

Source:  Maryland Department of Commerce

 

Southern Region


Your Local SBDC

Regional Offices

Your Local SBDC

Statewide Services

Grow Smart, Already In Business
Smart Start, Getting Started
Calendar for Event/Training
Special Programs
Virtual classroom