After you have developed a solid business plan, the next step is to actually register your business with the State of Maryland.
Step 1 Form the Legal Entity for Your Business with the Maryland Department of Assessments & Taxation
Registering your business with the Maryland Department of Assessments and Taxation is the first step. Maryland Business Express’ award-winning online filing portal makes this quick and easy, and accepts filings for most entity types.
Upon approval, the Department of Assessments and Taxation will issue you an SDAT Identification Number, which will begin with a letter (“D”, “F”, “W”, “L”, “T” or “Z”). This number serves as Maryland’s unique identifier for your business. Importantly, this is not the FEIN number issued by the IRS and required by financial institutions to open an account.
Keeping Your Identification Numbers Straight
Please be aware that once a state, federal, or local agency approves your registration, they may give you identification numbers that look similar, but are actually unique. For example, all legal entities are required to have a Department Identification Number from the Maryland Department of Assessments & Taxation. However, many businesses also need a Federal Employer Identification Number (FEIN) from the IRS, and a Central Registration Number from Maryland’s Office of the Comptroller. It’s very important you recognize that these are different, unique identifiers. This is one of the most common oversights by business owners and taking notice now will save you from many headaches in the future!
Depending on the type of business you select, you may need to register with multiple state, federal, and local agencies.
Sole proprietorships and general partnerships
Sole proprietorships or general partnerships are not legal entities but must still comply with state and local licensing and taxation requirements. You will need an SDAT Identification Number if you wish to open a business account, which can be obtained using Maryland Business Express.
Congratulations! You have finished the first step that all Maryland entities are required to complete. The next four steps that most Maryland businesses will need to complete involve (2) obtaining a Federal Tax ID Number from the IRS, (3) reporting Beneficial Ownership information to FinCEN, (4) applying for Maryland Tax and Insurance Accounts, (5) completing any necessary licensing and permitting registrations, (6) purchasing business insurance, and (7) purchasing health insurance.