The business name chosen for the new Maryland Corporation must be different from all other business entity registered and reserved with the state. It must also contain one or more of the following words (or an abbreviation thereof): “Incorporated,” “Corporation,” “Company” (but this must not follow the word “and” or a symbol for “and”), or “Limited.” Language that states or gives the impression that the corporation is organized for any purpose other than one permitted by state law and its articles of incorporation is not allowed.
By paying a $7 fee, you can reserve an available name for 30 days.
State Incorporation Timelines
The state incorporation timeline is 1 week, and the expedited time is within 1 business day.
State Incorporation Filing Fees
The state incorporation filing fee is $218, and can be expedited by paying an additional $50 is a faster time is desired.
Articles of Incorporation
The articles of incorporation must be filed, along with a minimum filing fee of $120. The articles must be delivered to the state secretary of state’s office by at least one of the incorporators, all of whom must be adult individuals of at least 18 years age. Their duties are to sign, verify, and deliver in duplicate those articles of incorporation to the secretary of state. The articles must include:
- Name and address of each incorporator
- Corporate purpose, or a statement that the corporation may engage in any lawful activity
- Number of directors authorized
- Names of all initial directors
- Total number of shares, itemized by class and par value (if designated), that the corporation is authorized to issue
- If par value is used, the aggregate par value of all the shares
- Any preferences, conversions, or other share rights
- Name and address of the corporation’s resident agent (must also sign the articles)
- Address of the principal corporate office in Maryland
Maryland also allows other, optional provisions to be included in the articles of incorporation, such as:
- Transferability of stock
- Division of directors into classes and the term of office for each class
- Establishment and terms of cumulative voting in the election of directors for the purpose of minority representation
- Regulating the powers of the corporation, its board of directors, and shareholders
- Limiting director and officer liability to the corporation in certain situations
You can authorize shares of stock either with or without a stated par value. The most common practice is to issue shares without par value. Maryland imposes a stock fee that depends on the number of shares you authorize in your articles. You can authorize up to 5,000 shares without par value or a number of par value shares whose total par value equals $100,000 for the minimum filing fee of $120 ($100 recording fee plus a $20 minimum stock fee). Authorizing 100,000 shares with a stated par value of $1 or 1,000,000 shares with a stated par value of $.10 both result in an aggregate par value of $100,000, and therefore qualifies your corporation for the minimum $120 filing fee. Most incorporators authorize one class of common shares with equal voting, dividend, and liquidation rights, and no special restrictions.
Maryland corporations must each have a registered, in-state agent. The registered agent is the person or business entity designated to receive official state correspondence, including notice if the corporation is “served” with a lawsuit. The state requires that all corporations maintain a registered, in-state office that may be its primary place of business. The registered agent must maintain a business office identical to the registered office, and must be either an individual person living in Maryland or a corporation authorized to conduct business in the “Old Line” State.
Bylaws lay out a corporation’s basic managerial and legal operating principles. The corporation must keep a copy at its principal executive office, but is not required to file them with the state. Nonetheless, they are a critically important document for the corporation.
At its initial meeting, the board of directors should adopt corporate bylaws, and then keep them updated as time goes on. The corporation’s board of directors can make, alter, amend, or repeal those bylaws, unless the articles of incorporation reserve this right to the shareholders. Bylaws normally address:
- Shareholders’ and directors’ meetings
- Authority, number, and tenure of directors
- Voting procedures
- Duties, responsibilities, and tenure of officers
- How stock is issued
- How and when annual financial information is provided to shareholders
Officers must be listed in the bylaws or elected by the board of directors. A Maryland corporation must have at least a president, a secretary, and a treasurer. Unless the bylaws specify otherwise, officers serve one-year terms and until a successor is elected and qualifies. So long as the bylaws permit it, state law allows a person to hold more than one office in a corporation, but they may not serve simultaneously as both president and vice president of the same corporation. A person may hold more than one office in the same corporation, but they may not act in more than one capacity to execute, acknowledge, or verify a document that requires that action by more than one officer.
An annual report, accompanied by a $300 fee, must be filed with the Maryland State Department of Assessments and Taxation each year with the corporate business personal property return.
State law also requires the president (or another officer specified in the bylaws) to furnish an annual statement of affairs report to the shareholders, which must include the corporation’s balance sheet and financial statement of operations. This report must be submitted at each annual stockholders’ meeting and filed at the principal office within 120 days after the end of the fiscal year.
Maryland’s corporate tax structure consists of a flat rate of 8.25 percent based on federal taxable income after state modifications. Among states that have corporate income taxes, Maryland’s rate ranks 16th highest nationally.