Potomac, MD asked in Business Law for Maryland

Q: Does a S corporation have to be registered somewhere...ie in MD, FL, VA or can it be legal without registration?

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1 Lawyer Answer
Mark Oakley
Mark Oakley
  • Rockville, MD
  • Licensed in Maryland

A: You’re mixing apples and oranges. First, any business that is not a state-registered entity (corporation, limited liability company, close corporation, etc.), is simply a sole proprietorship and all owners are personally at risk. A registered corporation can elect “Subchapter S” taxing status if it meets the number of shareholder requirements by simply filing the election with the IRS. It has nothing to do with being a legally registered corporation — although it has to be a registered corporation in order to elect Subchapter S status, as that status only applies to corporations. I suggest you meet with a lawyer and a tax accountant before you embark on your business enterprise. Learn what you need to know.

Rolanzo Richard White agrees with this answer

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