Can My Business Do Business In Dc If It Is Registered In Md

Starting a business in DC

This mail service was originally published in Feb, 2014. Nosotros're re-posting in case you missed information technology.

Determining the Appropriate Concern Entity–Should I Form an LLC or a Corporation?

Every potential concern possessor and service provider should give serious consideration to forming a business entity when they start a business organization to limit his/her individual liability for the debts and other obligations of his/her business.

Having a separate business organization organisation, such as a corporation or limited liability visitor, may permit you to separate your personal assets from those of your business concern—and thus protect your personal assets from certain claims against your business.

To achieve this liability protection, yous must organize and register your business entity with a State or the Commune of Columbia when you get-go a business .

Yous will have a range of entity types to choose from.

As a practical matter, however, most new businesses are existence formed either as a limited liability company or a corporation.

Tax considerations for when you starting time a concern.

The choice between the ii depends on (1) the tax treatment y'all want for the entity, and (2) the desired buying construction and direction of the entity. Liability protection comes with a choice of tax treatments for the business. For income tax purposes, your business entity volition be taxed in one of three ways: disregarded, equally a flow thru entity, or as a corporation. If the entity is disregarded for taxation purposes or treated as a flow thru, and then the entity itself does not pay revenue enhancement on its income. Instead, the business owner(s) is/are personally taxed on all of the entity's income.

If the entity is treated as a corporation for tax purposes, then the entity will pay income revenue enhancement on its earnings. This type of entity is often referred to as a "C-corp." If the owners of a corporation receive dividends, they too pay individual income tax on those dividends. Currently in most cases at a reduced 20% rate. Such double-taxation of income earned by a corporation tin can be costly, although that cost may be kickoff by deductions available simply to corporations.

Corporations that meet certain requirements may elect to have Due south-corporation status, which eliminates the double-tax result past allocating the Southward-corporation's income and tax liability to its individual owners. In addition, utilise of an S-Corporation status may, under the right circumstances, limit your payroll taxes. However, S-corporation status brings with information technology significant restrictions on the structure and ownership of the business organisation entity and eliminates many of the deductions available to C-corps.

The option of revenue enhancement treatment is an of import fiscal and tax determination, and best made in consultation with a qualified tax attorney when you lot start a business. The chart on the following pages summarizes the revenue enhancement treatment available for a given entity type. Notation that while a corporation may be treated as a C-corporation or S-corporation for taxation purposes, a limited liability company with ii or more members may choose to exist taxed every bit either a corporation or every bit a menses through entity. And if otherwise eligible, a limited liability visitor that chooses to be taxed equally a corporation may also elect to be taxed equally an South-corporation. Accordingly, when you showtime a business as a LLC you lot should consult a tax professional for assist in determining the appropriate taxation status for your new business.

Direction of Entity

Separately, when you start a concern, you should consider how you are going to organize the direction of your business concern. Corporations have a predictable management structure: its shareholders elect a Board of Directors, who in turn appoint the officers of the corporation, and the officers carry out the corporation's twenty-four hour period-to-day business operations. When yous get-go a business in a C-corporation, different shareholders may take different voting and dividend rights. When you lot start a business in an South-corporation, all shareholders must accept identical dividend rights and those who accept voting rights must have the same voting rights. Shareholders in a corporation should enter into a shareholders' agreement that provides for things such as how they volition vote or limitations on the transfer of their shares.

Express liability companies, on the other mitt, can accept wide-ranging management structures. Such companies may be managed past all of its owners or by one or more than managers, who generally are not required to be owners. All of the operations of a limited liability visitor are governed by the company's operating agreement and the applicable state express liability company rules. Because the operating agreement is then of import, information technology is imperative to put it in writing, even for a limited liability visitor with only one member. The operating agreement will both lay out the twenty-four hours-to-twenty-four hours decision making procedures for the company and the rules for the interaction of the visitor's members. Such rules typically include restrictions on the transfer of membership interests and provisions for distribution to members. The operating agreement should exist signed past all of the members, also equally the limited liability company.

The predictability of the corporate management construction tin be bonny to outside investors because it does not nowadays the chance that they will be confused past the quirks of a limited liability operating agreement. However, the flexibility of the express liability visitor's management structure enables business owners to do constructive control over the management of their businesses. The attorneys at General Counsel, P.C. tin help yous evaluate the pros-and-cons of both possibilities and enable you to make an informed decisionwhen you start a business.

Concern Entities Comparison Chart

What'due south in a Proper noun: The importance of the public'southward knowledge of your business

When you lot start a business, the proper noun of your business tin can exist critically important in attracting customers. But thinking of a bang-up name is simply the start step in a surprisingly complex process for registering the name that the public volition know your concern as.

The showtime pace is the proper name of your business entity itself. The entity cannot have the same name equally another business organization in the state in which it is organized. The staff at the Maryland Land Department of Assessments and Tax, Virginia Land Corporation Commission or DC Department of Consumer and Regulatory Affairs volition be able to tell you whether the name that you are because is available. If it is, you may register the entity immediately when you first a business organization or, alternatively, request that the country or District reserve the name for you for several months.

If you always use the full proper name of your business entity when y'all marketplace your business to the public, and then your registration requirements stop with the business entity. However, if you apply a different name, and then you must annals that equally a merchandise name. (Similarly, if you are sole proprietors simply do business under a different proper noun, and then yous must annals that other name as a trade proper name.) When you start a business in Virginia, you must annals the merchandise name in each county or city in which your entity does business, and you must besides register the trade proper noun with the Virginia State Corporation Committee. When you commencement a business in Maryland and the Commune of Columbia, a single registration with the state or Commune government is sufficient.

If yous want trademark rights to attach to your business's proper noun, so y'all must accept boosted steps. Trademark rights for a proper name are based on the use of that name in commerce, not on the name'southward registration with state bureau that governs business entities. You lot can improve your claim to trademark rights by registering the name with the The states Patent and Trademark Office. The Intellectual Belongings practise group at Full general Counsel, P.C. can help you make that filing and preserve the valuable trademark rights to the name that you created.

Shouldn't I Have a Delaware Corporation or Limited Liability Visitor?

Choosing the State of Organization

All fifty states and the District of Columbia qualify the system of corporations and limited liability companies when you first a business . Y'all tin have a particular state issue the charter for your business entity even if you do not conduct business in that country or have whatsoever connection with that state. This concept is most famously demonstrated with the Delaware Corporation, where many Fortune 500 corporations are chartered in Delaware even though their business organisation operations are in other states.

This occurs because a business entity's internal relationships (corporate shareholders-board of directors; LLC member-LLC managing director) are governed by the police force of the land in which the business entity is organized and registered when you kickoff a business. Delaware corporate law is generally considered to be favorable to corporate management. Delaware also has a very well adult trunk of case constabulary regarding business organization and an hands attainable Chancery Court for resolving commercial disputes. For these reasons, publicly traded companies (and many private companies) frequently choose to organize under Delaware law.

For the vast majority of businesses, the choice of the state of organization when they start a business does not take whatever real impact on its tax liability in the states where the company does business. Thus y'all are highly unlikely to avoid paying corporate income taxes to, for example, Virginia, on income generated at that place but because you organized your corporation nether the laws of some other land.

Most new businesses are best served by organizing as an entity under the constabulary of the land in which almost of the business organisation operations will occur. In the Washington, D.C. metropolitan area, Virginia, Maryland, and D.C. law vary in their requirements for corporations and limited liability companies. Although, none of the differences are significant enough to justify the extra expense of organizing an entity in a country where you are not conducting business.

Registering in Other States by Business organization Conducting Business in More than One State

When you lot showtime a business concern you lot must annals your business entity in every state in which it "does business." This simple phrase belies some complex analysis. If your business has employees in a state other than the state in which the concern entity is organized—even if information technology'south an employee who frequently travels into the state on sales calls—or if your business does more than than occasional concern in another state, then the business entity may demand to register as a "foreign entity" in that other state. If your business but infrequently provides a service in some other state, and so it may not demand to register in that other land. If y'all are unsure where your business falls, you should consult i of the business attorneys at General Counsel, PC.

Choosing a Registered Agent

A business entity must appoint an official agent in every state or District in which it is registered and/or doing business. The official title of these agents varies by state (near often they are called a "Registered Agent" or "Resident Amanuensis"), and the laws of the unlike states' provide different duties and responsibility to the agents.

In all states, when a business organization entity is sued the legal papers for the lawsuit may be served on its registered agent. In many states, including Virginia, the agent is also the recipient of all of the official correspondence to the concern entity, such as annual renewal paperwork from the land.

Business organisation owners ofttimes engage law firms and other specialist businesses to serve as their amanuensis. General Counsel, P.C. serves as a Virginia registered agent for a number of business entities. In addition, a business organisation owner generally may serve as his or her business entity's amanuensis in the state in which that owner resides.

Writing a Business Programme

Before y'all brainstorm making decisions about your business, you lot should organize and formulate your thoughts and objectives by creating a concern plan. It does non need to exist a formal document, peculiarly in its early stages of when you get-go a business. A business plan is a living document—y'all will alter it frequently as you go forth.

When you lot discuss your business idea with advisors, such as an attorney or accountant, the concern program will help them tailor their advice to your precise concept, product or services. Further, when you discuss your business idea with potential lenders or investors, the business plan will provide a take-home slice that demonstrates the viability of your concept. Commercial lenders, including banks, generally will not consider lending to your business if you lot exercise not have a well drafted written business plan.

First a Business: Business Plan Outline

I. Executive Summary:This is a one to two page summary of core ideas for a concern plan. The summary should interest a reader in the business concept, product or services and entice him/her to read the entire plan. Fifty-fifty though here, the Executive Summary appears first in the concluding document, information technology volition typically be written concluding.

Two. Description of Business and Management:This section should give a brief clarification of your business organisation. Include the name of the business concern, how it is organized, the identity of the owners, and the history of the business.

III. Description of Product or Service:It is critical to requite a articulate and concise clarification of the services to be offered by your business. This section should be written in layperson terms—technical data can be attached in the appendix. You should emphasize the benefit your product or services offer to the target marketplace.

Four. Marketing Plan:The marketing plan should include a review of manufacture conditions, a precise definition of your target market place(s), an analysis of competitor advantages and weaknesses and a plan for promoting and selling your services.

A. Industry: Describe the state of affairs within your industry segment.

B. Customer: In this section, write a articulate description of your target marketplace and include their needs and wants. Your service should offering a solution to the target marketplace or provide a do good to your client.

C. Competition: This section identifies competitors providing the aforementioned or similar solution to your target marketplace. For each competitor, you should define strengths and weaknesses and define how y'all volition position your business in the market with the established firms. Practice not presume that you have NO competitors. Somehow, someway, your target marketplace is using a service that meets the demand you aim to satisfy.

D. Advert and Promotion: In this department y'all should define how you intend to go your service to your target market. This includes marketing avenues—advertising, promotions, public relations—and distribution channels.

Eastward. Location: Describe the location of your business organisation and how its features impact your business organization. If the business requires special zoning or building improvements, note them here.

V. Subcontractors:If you depend on subcontractors to evangelize a service, you should know how to contact these sources. In this section you volition list your disquisitional subcontractors.

VI. Direction Capabilities:It is important to know what resources you have in-house to back up business development and growth and what resources y'all volition need to detect. In this section, you should demonstrate that your management team has technical abilities, marketing abilities and business apprehending to succeed. In addition, place directors and advisors who yous will consult with.

7. Financial Plan:This section should include past financials and futurity projections based on sound and reasonable assumptions. If the business plan is being presented for financing, the source and utilise of funds should be defined here.

No Obligation Consultation: If you lot would similar to conform a no obligation consultation to discuss your business goals and appropriate entity for your business feel free to call Norman L. Eule, Esq., Chair of General Counsel P.C.'s Corporate and Tax Group at 703-556-0411, or e-mail him at neule@gcpc.com.

*The foregoing is not intended to provide, nor should it be relied upon for, legal advice. Nor is it intended to establish an attorney-customer relationship with General Counsel, PC.

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General Counsel, P.C. – Every Business organization Needs a Full general Counsel:Led by Norman Eule, General Counsel's Business concern and Tax Practice Grouphas over 40 years of professional person feel in counseling business owners on all aspects of commercial transactions. Our attorneys have extensive experience representing a broad range of local, regional, and national companies and business ventures. If you take any questions regarding the outcome of the new solicitation rules on your company, or any other business law related questions, please contact either Norman L. Eule or Robert Lee.