Legal Question in Business Law in Maryland

Re: Forming A Sole Proprietorship

You don't have to do anything formal to work as a sole proprietor, unless there are business licensing requirements in your particular field. You will report your income and expenses on Schedule C of your federal tax return. You may want to consider setting yourself up as a Limited Liability Company, which will enable you to protect personal assets if you think you might get sued for any work you do. This requires a simple application to the state, which will register your LLC, and acquiring a new tax id number from IRS. As long as you contract with your clients only through the LLC, you'll be protected.