We usually get asked by our clients “is it possible to form a company in Delaware but make business in other states?” The answer is “yes”. Actually, most people form their company in Delaware because of its several benefits regarding taxes. They form a Delaware LLC but do not operate in Delaware. To put it simply, they set up a business in Delaware to take advantage of Delaware’s strong corporate law structure.
Even if you run your business in Maryland, there are many advantages to set up your company in Delaware.
You should note that like many states in the US, Maryland also has an application process and state fee for Delaware businesses to run there. For this reason, Foreign Qualification is necessary for your company’s permission to operate in that state with a Delaware LLC.
Maryland Foreign Limited Liability Company Registration form is required and in addition to that, the state of Maryland also requires you:
– Certificate of Good Standing from Delaware
Maryland State Department of Assessments and Taxation agency will confirm this registration.
Of course, there are some steps to be followed:
– You will need a Registered Agent.
– Maryland will contact your Registered Agent about all legal documents and correspondences they will send.
– If you have a physical address in Maryland, you can be your own Registered Agent. You can also retain one in Maryland though.
Maryland does not have to publish your application if it is not specifically required by the county where your Registered Agent resides.
Maryland Foreign Qualification application can take 8 weeks normally, it may also take some time for mailing; many people choose to speed up the process at an extra charge so they can have all the paperwork as soon as possible.
When your Delaware LLC is registered in Maryland as a foreign entity, Maryland state will require an annual report which is due April 15 of each year with a $300 fee. It must be physically mailed to the state – not through email. This report is similar to a tax return, so many clients ask for help from a tax professional to be assisted.
