by Lisa White

Lisa WhiteMay 9, 20260 comments

Maryland is a great state to form a Non-Stock Corporation

Maryland’s corporation  laws make it a favorable state in which to form a non-stock corporation. A non-stock corporation is a corporation that does not issue shares of stock, and is formed for not-for-profit purposes. The term “non-stock” is different than the designation of an entity as a “501(c)(3)” corporation. The 501(c)(3) designation is an IRS tax-exempt status for a corporation. Non-stock corporations can qualify for tax-exempt status with the IRS, if the entity complies with all necessary requirements. Non-stock corporations can be formed for a variety of purposes, including religious, educational, or charitable. This type of corporate entity often is used by homeowner’s associations, religious groups, trade associations, and other entities that want to run a not-for-profit organization, and take advantage of the benefits afforded to this type of entity.

The State of Maryland provides tax exemptions to non-stock corporations that meet certain requirements. For instance, the state may offer exemption certificates to qualifying non-stock corporations for purchasing personal property without paying sales and use tax. Some non-stock corporations may also be eligible for a state income tax exemption.

Officers of a non-stock corporation receive legal protections from liability, though these protections are not absolute. Limits on liability allow the officers of the company to focus on the mission of the corporation. 

Forming a non-stock corporation requires compliance with Maryland’s general corporations law as well as the laws applicable to non-stock corporations. At Lewicky, O’Connor, Hunt, & Meiser, LLC, I assist my clients with forming Maryland non-stock corporations and helping them navigate the process. This includes choosing a name, filing Articles of Incorporation, selecting a Resident Agent, creating By-Laws, and holding organizational meetings. If you or someone you know are interested in forming a non-stock corporation, Lewicky, O’Connor, Hunt, & Meiser, LLC stands ready to assist you.

None of the information provided in this article constitutes legal advice. Every situation is different and should be thoroughly reviewed by and discussed with your legal advisors. Please do not rely on the contents of this article as a basis for making decisions regarding your situation. Please call us to schedule a consultation at (410) 489-1996.