Legal Question in Business Law in Maryland

Taxes are only one aspect to consider when forming a business. An LLC and S are pass through entities, a C is a separate taxable entity. The type of business and objective of a business plan should be considered in conjunction with a taxation decision.

Thanks for your post.

Just to clarify, "S Corp" is a type of taxable status, not a type of entity. An LLC is a type of entity but it can select to be taxed as a S-Corp if it so chooses. (it could also be taxed as a corporation if it wants or simply be a pass through). Some of the choices will depend on the specific nature of your business. S-Corps, for instance, are limited in the number of owners and so forth.

A more basic question is why Delaware (presumably your business is located in MD)? While DE has a reputation as a business-friendly forum, note that if your business operates in MD it will still need to register in MD, so selecting another state in some cases only serves to increase cost & administrative hassle. In some cases a business will have a specific reason for forming in another jurisdiction but that should be explored.

As a prior poster noted, the specific business goals will affect how you set up your business entity. You are encouraged to seek the advice of an attorney (and in many cases an accountant, too) before setting up your business structure. This is an area where the cliche "an ounce of prevention is worth a pound of cure" often holds true.