Answers to small business questions in Maryland

Although most small businesses do not need to incorporate to operate, there may be advantages to doing so. For instance, it may be easier to get a loan from a bank or gain access to tax breaks after a business incorporates. While incorporating is not a difficult process, it is one that needs to be done correctly.

Incorporating generally involves submitting the proper paperwork and paying a fee to the state where the company wishes to incorporate. For companies that operate in one state, it is best to incorporate in the state where the company operates. However, a business may have an opportunity to incorporate in any state if it operates in multiple states.

Those who wish to run their company as a partnership do not need to incorporate. However, in most cases, it is a good idea to create a formal partnership agreement. Spouses who run a company together may be classified as a partnership by default. Certain qualified joint ventures may allow a husband and wife to file their taxes as sole proprietors. To qualify, the husband and wife must both agree to file as sole proprietors, must materially participate in the business and must be the only members of the venture.

Small business owners who are considering the proper structure for their business may wish to talk to a business law attorney. An attorney may be able to help create legal documents such as partnership agreements or documents related to forming a corporation. This may make it easier for a new business to get started properly and operate within the confines of state law.

What are the Types of Business Structures?

Before you launch a small business, two questions you should consider are: What are the types of business structures, and which one best fits my needs? The main types…