Starting a business in Maryland will mean potentially registering with a number of federal, state and local agencies. Let’s take a look at common licenses and permits a business will register for in Maryland.
Business License – There is no general state of Maryland business license, however many cities require businesses to be licensed in order to operate. Rules for business registration vary depending on location and what the business does. Below are a few cities that have licensing requirements.
Baltimore – The Baltimore Department of Finance issues licenses for businesses operating in the City of Baltimore regulating industries such as antique dealers, bowling alleys, towing services and many more.
Frederick – The main businesses needing a local business license in Frederick are food-related businesses (Health Department) and businesses serving alcohol (Liquor Board).
Rockville (Montgomery County) – Businesses such as retail stores, dry cleaners, plumbers and more will need to register with the Montgomery County Circuity Clerk.
Employer Identification Number (EIN) – Many businesses will register with the Internal Revenue Service (IRS) for an EIN or Employer Identification Number. The EIN is the business equivalent for a Social Security Number for an individual. Corporations, Limited Liability Companies, Partnerships and Sole Proprietorships with employees will all need to register for one. Sole Proprietorships without employees can use the owner’s Social Security Number.
There is no cost for an EIN and it only takes a few minutes to get.
Trader’s License – Businesses that sell products in Maryland will need to obtain a Trader’s License from the Clerk of the Circuit Court in the county where the business operates.
The license runs from May 1st to April 30th.
Fees for Trader’s licenses are based on the average commercial inventory that a business owns, which currently range from $15 to a maximum of $800 with the exception of Baltimore City which can be as high as $2,125.
Sales & Use Tax License – Businesses selling products and certain services will need to register for a Sales & Use Tax License from the Comptroller of Maryland.
Resale Certificate – Businesses purchasing merchandise to resell will usually want to obtain a Maryland Resale Certificate in order to not pay sales tax for merchandise that is being resold to customers.
Professional License – A variety of professions in the state are regulated and need to be registered before offering certain services. A few common professions that require licensing in Maryland include; contractors, accountants, landscapers, laundry services and many more. Additional information, fees and licensing requirements for professions are available from the Maryland Department of Commerce.
In addition to professional licenses, businesses in a variety of industries such as food establishments, daycares, salvage yards and many others require licensing. More information more information on these licenses are available from the Comptroller of Maryland.
Trade Name Registration – While not a business license, it’s common for Sole Proprietorships and Partnerships operating under a name that is different from the full name of the owner(s) to register for an Trade Name (also known as a Doing Business As or DBA) with the State Department of Assessments and Taxation.
These are a few of the most common business licenses, but there are way too many licenses and permits in Maryland for us to keep track of. Before starting your business, check with the City Hall, County Clerk, Chamber of Commerce and/or Economic Developer in your area to get more information regarding business licensing. Additionally, there are companies like IncFile or CorpNet that can do the research to ensure you have the proper federal, state and local licenses.