Business Law Frequently Asked Questions (FAQs)

1. What steps do I need to take to form a business in Maryland or DC?

In Maryland, file Articles of Organization (LLC) or Articles of Incorporation (Corporation) with the Maryland State Department of Assessments and Taxation (SDAT). In DC, register your business with the DC Department of Licensing and Consumer Protection (DLCP).

Obtain an EIN from the IRS and any necessary state or local business licenses.

2. Do I need a written partnership agreement for my business?

Yes. While not legally required, a written partnership agreement helps outline roles, responsibilities, profit-sharing, and dispute resolution, preventing misunderstandings.

3. What is the difference between an LLC and a corporation?

An LLC offers flexibility in management and taxation (pass-through), while a corporation is better suited for businesses seeking investors or going public due to its structure and ability to issue stock.

4. Are non-compete agreements enforceable in Maryland and DC?

Maryland: Non-competes are enforceable but must be reasonable in duration, geography, and scope to protect legitimate business interests.

DC: The Non-Compete Clarification Act (2021) limits enforceability, particularly for low-wage workers.

5. When should I trademark my business name or logo?

Trademark your name/logo as soon as it’s unique and in use. Federal registration through the USPTO offers nationwide protection, but you can also file in Maryland or DC for local rights.

6. Do I need an operating agreement for my LLC?

It’s not legally required in Maryland or DC, but an operating agreement establishes rules for your LLC’s operation, ownership, and member responsibilities.

7. How do I dissolve a business in Maryland or DC?

File Articles of Dissolution with SDAT (Maryland) or the DCLP (DC), settle debts, distribute remaining assets, and cancel licenses.

8. Can I run my business from home in Maryland or DC?

Yes, but check local zoning laws and obtain any necessary home occupancy permits.

9. What taxes do Maryland and DC businesses need to pay?

Maryland businesses pay state income tax, sales tax (if applicable), and personal property tax. DC businesses pay franchise tax, sales tax, and possibly business improvement district fees.

10. What is a registered agent, and do I need one?

A registered agent receives legal documents on your behalf. Maryland and DC require every business entity to designate one.