5 Basic Things to Do When You Start a Business in MD
Achievements don’t come to those who dream at night, but to those who dream during the day. And for those who wish to open a business, planning and dreaming go together. Plus, you must carry out a few essential tasks that help you lay a solid foundation for your business.
Once you have a sound business plan, done thorough market research, fixed a location, and raised the capital, you must do the following before you start a business in MD.
1. Choose a business structure.
It is important to have a legal structure for your business. Choose the one that suits your business plan, as it influences your taxes, personal liability, and profits.
Most new businesses come under the following structures:
- Sole proprietorship: This structure requires no corporate formalities. The business has a sole ownership. The owner is personally responsible for the profits and losses.
- Limited Liability Company (LLC): This type of business structure safeguards the owner’s personal assets from the business’s debt. It requires fewer corporate formalities. Corporate tax as profits cannot be passed to the owners of the business directly.
- Corporation: This type of business structure requires formal record-keeping. Starting a corporation reduces taxes, particularly self-employment taxes. No shareholder is personally accountable for business debts. Capital is raised from investors.
- Limited Partnership (LP): This type of business has two partners. Both are liable up to the amount they invest in the business.
- Non-Profit Business: This type of business is exempt from tax because it is run for a social cause and offers public benefit.
2. Choose a unique business name and register it.
Ensure your business name is unique and not used by another, lest it can cause legal trouble for you. If you are starting a business under a trade name, which means not in your name, you must register as DBA – Doing Business As. DBA lets you open a bank account and features lower startup costs.
3. Get a business permit or license.
Businesses need a license to operate. When you start a business in MD, please check the laws in the state. It is good to hire a business lawyer to ease out the legalities of a business. In MD, sole proprietorships do not need a license, but, depending on the type of business, you may be required to obtain a permit or local occupational license.
4. Trademark your business name and logo.
A business lawyer safeguards the intellectual property rights of their clients’ businesses. Make sure you use your rights to avoid somebody stealing or copying your logo or business name.
5. Create a living trust.
A living trust is like a will that lets you transfer your business to a beneficiary, in case you are incapacitated or die. A living trust lets a business gets transferred to the beneficiary quicker than a normal will after the death of the owner. This way, your business operations will run smoothly without interruptions. Your business lawyer can help you create a trust.
Just like there are business lawyers, there are also small businesses bankruptcy lawyers in MD. Be familiar with both when you plunge into the world of business.