Tip #1: Get the free forms the Maryland Secretary of State supplies
Whether you're forming an LLC or a traditional corporation in Maryland, you do so by filing articles of incorporation (for corporations) or articles of organization (for limited liability companies) with the secretary of state.
Here's the interesting thing to know, though, if you want to save money: These articles can be prepared using free forms available from the state of Maryland's government website.
Unfortunately, the full URL addresses of the free Maryland forms sometimes change so providing a link here doesn't make sense. But if you have the exact document name you need, you can search (using something like Google) and find the form you need.
For example, search on "Maryland Articles of Incorporation for Stock Corporation form and instructions" for a regular corporation form, search on "Maryland Articles of Incorporation for Close Corporation form and instructions" for the Maryland close corporation form, and search on "Articles of Organization for Limited Liability Company form and instructions" for the Maryland limited liability company form.
Note: Consider the Maryland close corporation option for a one-shareholder corporation or a husband-and-wife corporation. Small family corporations like these often don't need to use traditional corporate governance mechanisms, such as regular shareholder meetings, a full board of directors, corporate officers, and so on.
Tip: Even people who end up working with a lawyer will find the free Maryland forms interesting. The forms show you what goes into the articles paperwork and give you insight into the work required.
Tip #2: Take up the IRS on fast and free EIN
You can pay an accountant for help getting an employer identification number, or EIN. You can even use online services that purport to ease the process. But you know what's often truly easiest? Just doing the application yourself once you get your certificate of incorporation from the Maryland Secretary of State. All of the information and the free forms you need to obtain an EIN are available at the Internal Revenue Service's website www dot irs dot gov!
If you want to apply for an EIN with a paper form you mail or fax into the Internal Revenue Service, for example, you can download a free copy of the SS-4 form and instructions right from the irs dot gov website. The form instructions explain in detail what you need to do and explain where to send the completed EIN application form.
If you can't wait a few weeks for your EIN (as happens commonly when you apply using the paper form method), you can use the IRS's website to apply online. To apply online, visit the IRS website home page and then look for and click on the "Apply for an Employer Identification Number (EIN) Online" hyperlink.
Tip: If you need an EIN quickly, use the online application. With the online application process, you can get your employer identification number the same day that you hear from the State of Maryland that your articles of incorporation or LLC organization have been accepted.
Tip #3: Do subchapter S election with help from tax man
Not everybody knows this, but an S corporation isn't actually a real corporation. Rather, an S corporation is a corporation or limited liability company that uses the tax accounting rules contained in subchapter S for the Internal Revenue Code.
You may just want to elect a Subchapter S status for either a Maryland corporation or a Maryland LLC because often the S corp accounting rules save employment taxes (self-employment taxes, Social Security taxes or Medicare taxes).
Normally, because S corporations are a "tax thing" people go to a CPA, enrolled agent, or unenrolled tax accountant for help. But you can make an S election yourself using the IRS form 2553 and the form 2553 instructions. To get the 2553 S election form, Google on the phrase "Internal Revenue Service 2553 form" or visit the irs dot gov web site and enter "2553" into the search box on the IRS home page.
Tip: Most people will also benefit by getting and then perusing the free S election instructions that explain the 2553 form. To get that instruction pamphlet from the IRS website, Google on the phrase "Internal Revenue Service Instructions for 2553" or enter "2553 instructions" into the search box on the IRS home page.
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Need a Maryland corporation or S corporation? QuickBooks author and tax accountant Stephen L. Nelson is the author of two downloadable do-it-yourself kits for small business people who need to inexpensively incorporate in Maryland. For information, visit http://www.scorporationsexplained.com/doityourself_MarylandSCorp.htm and http://www.fasteasyincorporationkits.com/MarylandCorporationKit.htm.
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