As an entrepreneur, you have so much to keep up with. Local, state, and federal compliance takes up a good bit of your time, apart from actually keeping your business profitable. In Maryland, your business needs a Certificate of Status, which is a document authorizing your company to do business in the state. Having a CoS also indicates that your business is up-to-date on all taxes and reports. To assist you and other entrepreneurs, our firm has assembled a list of to-do’s to ensure your business is in good standing.
- Remember to file Form 1 (Business Personal Property Return). This form for Maryland LLCs also acts as its annual report and must be physically mailed if you missed the deadline. This report gives an update on ownership of your LLC, contact information, and other basic facts.
- Have an active registered agent. Your LLC must have a registered agent within the state who can receive important tax and legal information relevant to your LLC – essentially, the state mandates a point of contact. In addition to having a registered agent, your LLC’s principal office must be in Maryland.
- Don’t mix your business’s finances with personal finances. This is risky and opens up your personal assets to lawsuits against your LLC, which is called “piercing the corporate veil.” To help keep your personal and business assets separate, open a checking account and line of credit specifically for your LLC. This also allows you to be more efficient when doing your taxes.
- Keep up with the minutes for your LLC. When you hold meetings with owners and members of your LLC, you should record the minutes, which is a collective summary of what was covered during the meeting. Recording minutes can help ensure that your LLC is protected from various liabilities and stays in good standing with the state.
What Happens If My Business is Not in Good Standing?
If your Maryland company is not in good standing, then it is not permitted to operate in the state. A business that is not in good standing for a long enough period of time will be forfeited. A forfeited business means that it is not considered a valid entity and can therefore not initiate a lawsuit or other legal action.
If your business has lost its good standing status, you can take steps to regain a Certificate of Status from the state Dept. of Assessments & Taxation. Even a forfeited business can be brought back to good standing. Call our firm today at (410) 296-6485 for an experienced Maryland business lawyer who can help put your LLC on the path to good standing.