STEP 1: Registering your business and forming a legal business entity with Maryland’s State Department of Assessments and Taxation (SDAT)

The first step in creating a business in Maryland is to determine which legal business structure is most relevant to your operations. When starting a restaurant, the most common legal business structures initially include limited liability companies (LLCs), sole proprietorships, and partnerships. Under an LLC, your restaurant acts as a separate legal entity while, under a sole proprietorship, you and your restaurant are the same legal entity. Partnerships are very similar to sole proprietorships with the exception of multiple individuals or parties owning the business versus just one. These basic differences lead to several advantages and disadvantages for each structure and deciding between the three ultimately depends on what you value most. Additional information can be found in our Guide: Choosing Your Legal Business Structure.

Once you have decided on a legal business structure for your restaurant, the next step is to complete the necessary registration requirements. ​You can either register online through the Maryland Business Express Website or in-person at the Maryland State Department of Assessments and Taxation (SDAT) office (address and contact information included below). For more information on how to register your business online, refer to our [Guide: Registering Through The Maryland Business Express Website].

After completing the registration, SDAT will issue its own identification number, usually beginning with a “D”, “F”, “W”, “L”, or “Z”. However, note that this identification number is NOT the same as the Federal Employer Identification Number (FEIN) soon to be described in STEP 3. The FEIN is generally the number required for opening any new business bank accounts. 

Maryland State Department of Assessments and Taxation (SDAT)
301 West Preston Street, 8th Floor
Baltimore, MD 21201
Telephone: 410-767-1184 | Outside the Baltimore Metro Area: 888-246-5941
Maryland Relay: 800-735-2258
Email: SDAT.charterhelp@maryland.gov

STEP 2: Registering a business trade name with the Maryland Department of Assessments and Taxation 

If you decide to file your restaurant as an LLC, this step is not required as you will already be establishing a separate legal entity for your restaurant. However, if you choose a sole proprietorship and want to operate your restaurant under a different name, then registering a business trade name with the Maryland Department of Assessments and Taxation is required. This process of creating a fictitious business name, also referred to as “Doing Business As” (DBA), is generally the simplest and least expensive way for a small business to legally conduct business under a different name.

For example, if Al Jones wants to open a sole proprietor burger business called “Burgers by Al Jones,” he needs to file a DBA for “Burgers by Al Jones.”  The rationale is to create an official public record for identifying what individual(s) are running the business.

For more information on how to register your trade name online, refer to our [Guide: Registering Through The Maryland Business Express Website]

STEP 3: Obtaining a Federal Employer Identification Number (FEIN) from the IRS

The FEIN is a unique nine-digit number used by the Internal Revenue Service (IRS) to identify a business operating in the United States. The IRS generally expects your business entity to be formed with the Maryland State Department of Assessments and Taxation (SDAT) before applying for a FEIN number. In other words, you will need to first register your business with SDAT as described in STEP 1 and STEP 2.

Again, note that your FEIN is different than the identification number assigned by SDAT after completing your registrations.

***Note that STEP 3 is the same task as Tax Requirement 1 in the Tax Workspace***

STEP 4: Registering your necessary tax accounts with the Comptroller of Maryland

After registering your restaurant with SDAT (STEP 1 and STEP 2) and obtaining your FEIN (STEP 3), you will need to register your necessary tax accounts with the Comptroller of Maryland.

We highly recommend registering through Maryland’s Business Express Website. In this portal, you can implement a Combined Registration Application, which registers your restaurant’s tax accounts for Sales and Use Tax, Employer Withholding Tax, Unemployment Insurance, Admissions and Amusement Tax, Tire Recycling Fee and Transient Vendor License. While you may need additional tax registrations depending on your business, this should cover the majority, if not all, the tax registrations initially required for your new restaurant.

For more information on how to do this, see our Guide: Registering Through the Maryland Business Express Website. You can also download the registration form here and fax or mail it to the below address. However, note that this registration form is far more difficult to navigate than doing it through Maryland’s Business Express Website.

Central Registration
Comptroller of Maryland Revenue Administration Center
110 Carroll Street
Annapolis, MD 21411-0001

For additional information, you can refer to each of the Comptroller’s taxpayer service offices. In all of their locations, you can obtain personal assistance for setting up tax accounts and asking questions regarding your business.

***Note that STEP 4 is the same task as Tax Requirement 2 in the Tax Workspace***

I. Restaurant Layout (1. Building Considerations)

Before beginning work on any building structure make sure you have done the following:

• Checked Building Zoning
• Obtained Building Permit
• Ensured Structural Soundness

I. Restaurant Layout (2. Parts of the Restaurant)

A typical restaurant consists of the following parts:

• Cooking Area
• Beverage Area
• Storage Areas
• Serving Areas
• Restrooms
• Dishwashing Area
• Janitorial Area
• Parking
• Manager's Office

I. Restaurant Layout (3. Aisle / Workspace Standards)

There must be aisles for people to walk and they should be present on your architectural plan. Aisles and workspaces should be unobstructed and meet the following standards:

II. Plumbing & Trash (1. Sewage)

If you’re planning on having a restroom in your restaurant, even just one for employees, you must have a strategy for the disposal of sewage. Most restaurants connect into the public sewage system, but some use an on-site disposal. If you are moving into a building that was used as a service facility or housing before, it is likely that you will already be connected to the public sewage system. Owners of new buildings should ensure that they are connected to a sewage pipe, or consider using an on-site disposal. Connecting to the public sewage system can vary in price depending on the distance you are from existing pipes.

If there is a sewage problem, ranging anywhere from a broken pipe to a clogged toilet, contact a local plumber to fix it before opening the restaurant. Also make sure to purchase a lot of necessary toilet equipment such as toilet paper, paper towels, hand soap, a plunger, and air freshener. For retailers of these products visit our Vendors section.

II. Plumbing & Trash (2. Water)

You need running water to wash dishes, clean hands, and most of all, drink. You can get this water through the public water system or a private well. If you are located near public water pipes and the water quality is up to your standards, it is worth connecting into the public system. If not you can tap into a private well. Private wells often provide fresher water but can be expensive to tap into. Check which water pipes come closest to your particular location and make a decision from there.

When designing your restaurant you must ensure that fresh water pipes attach to all sinks and dishwashing devices. If you need to lay new piping or alter existing pipes we recommend calling a local Plumber to assist you.

If you are concerned with the taste or quality of your water you should consider using a Water Testing Kit to make sure the water is up to your standards.

II. Plumbing & Trash (3. Grease)

If you are planning on cooking with any type of grease you need a safe way to dispose of it. You can handle your used grease yourself through either an exterior grease trap or grease interceptor or you can choose to have a grease-collection company handle it for you. Grease interceptors must be located on the exterior of the building and may not be located within food preparation, for storage, or food service areas. In addition, all grease storage must be located on a grease-resistant, durable surface such as asphalt or sealed concrete pad. If you are using a grease-collection company make sure to have a plan for storing grease before the company removes it.

Refer to the resources below to help you make the right choice for your restaurant.

Grease Trap vs. Grease Interceptor

Buying Grease Interceptor

II. Plumbing & Trash (4. Trash)

You’ll need to have a full plan for how waste will be disposed of. Make sure you have trashcans set throughout your space to prevent any one from filling up too quickly. Identify the dumpster you will use to dispose of trash and your plan for getting it there. A dumpster must be put on a grease-resistant, durable surface such as asphalt or a sealed concrete pad. Also, make sure you double check to make sure a public trash collection route comes near your dumpster.

We also encourage recycling, as it is the responsible thing to do. Make sure your recycling containers are clearly marked.

III. Equipment & Finishes (1. Purchasing Equipment)

Refer to the Equipment section for a full list of necessary and commonly-used equipment as well as vendors that sell it. It is absolutely essential that you keep track of all equipment you buy including the manufacturer name, number, and model type, as you will use this information in your Structural Plan Review. This section deals mainly with regulations on certain equipment.

You must ensure that the following standards are followed:

• Accurate thermometers (+-2 degrees) must be provided in all refrigeration, freezer, and hot storage equipment. Refrigeration equipment must be 41 degrees and below. Freezer units must be able to go 0 degrees and below.
• Ice Machines must be accompanied with an ice scoop.
• Ice Machines, soda fountain carbonators, drink dispensers, and dish machines must be equipped with an appropriate back flow prevention device to prevent contamination of the water supply and food product
• Walk-in fridges and freezers need adequate shelving to store items properly and allow for proper circulation.
• You need a HVAC system
• Splashguards are required on sinks to protect food from contamination
• Gloves and utensils must be provided for handling ready-to-eat foods. Bare hand contact of ready-to-eat food is not permitted.
• Toxic and poisonous material must be maintained separately from food storage, food preparation, food equipment, utensil washing, and utensil storage. Toxic material must be prominently and distinctly marked.
• Ventilation Hoods are required over all cooking, dishwashing, and steaming equipment (visit the Ventilation Hood section for additional information)

III. Equipment & Finishes (2. Equipment Placement)

There are many placement standards put in place to ensure that your cooking area does not pose a threat to customers and that your entire restaurant is easy to clean. It is important to follow these regulations as they will be checked once during your Structural Plan Review and once during Health Inspections.

Requirements are included below.

• Food preparation and food preparation equipment may not be located in areas accessible to the public
• Counters and cabinets must be open on the business side to allow for easy cleaning. They must also be equipped with casters or sealed to the wall, floor, or other food service equipment with an acceptable sealant such as caulk or flashing to a cap no greater than 1/32”
• Shelving must be elevated at least 6” above the floor and placed so that there is sufficient space for cleaning
• Stationary food equipment including walk-in coolers, proofers, rack ovens, floor mixers, and floor mounted equipment must have sufficient space to allow for cleaning or must be sealed with an acceptable sealant to the wall, floor, or other food service equipment with a gap no greater than 1/32”
• Ventilation Hood Requirements

III. Equipment & Finishes (3. Purchasing Finishes)

The tile and hard surface finishes you put in various places of your interior need to apply with government standards. These standards are in place to ensure that surfaces can be easily cleaned and won’t retain any filth. If you need suggestions as to where to look for finish material, refer here. In addition, make sure to record the material used for all surfaces and finishes as it is needed as part of your Structural Plan Review.

When purchasing finishes make sure you comply with the following standards.

• The walls in food preparation, food storage, utensil washing, and toilet room areas must be smooth, washable, and water and grease resistant to a level above the splash zone or highest level reached by potential splashes of food and water
• The floors in the areas mentioned above must be smooth and durable. Acceptable materials include epoxy, sealed concrete, quarry tile, ceramic tile, and commercial grade continuous sheet vinyl
• Carpet tiles are not permitted where liquid food products are served, stored or displayed
• The ceilings in food preparation and utensil and dishwashing areas must be smooth and washable. Ceiling tiles may not be perforated or contain a glass fiber backing
• Exposed construction such as exposed floor and ceiling rafters, trusses or beams, utility ducts, and lighting must be limited to dining areas, dry food storage areas, and areas over self-service beverage dispensing equipment. Exposed construction may not extend into the bar area or beverage dispensing areas where utensil washing or food or drink is prepared

III. Equipment & Finishes (4. Placement of Finishes)

There are no requirements or regulations as to the placement of finishes in Anne Arundel County, Maryland.

IV. Lighting & Power (1. Lighting)

Explore Lighting OptionsDifferent light intensities from different angles can give a drastically different feel to the ambiance of your particular space. Some restaurants like high-end steakhouses seek low lighting, while others, like bars, prefer more lit spaces. You want to experiment with your particular space and see how different lights from different places affect the area. To check out different types of lights commonly used in restaurant settings refer here.

Follow Lighting RequirementsWhen installing lights it’s important to keep the following in mind and record it as part of your Structural Plan Review.

• Lighting in food preparation and food equipment areas must be sufficient to meet 50 footcandles at work surfaces
• Lighting in storage areas, toilet rooms, locker rooms, garbage storing areas, dining areas during cleaning, utensil washing areas, bar, wait station, and service areas must be sufficient to provide 20 footcandles at 30” from floor surface
• Light bulbs and tubes must be shielded in food preparation, food storage, and utensil storage areas to prevent glass from falling into food or onto utensils

IV. Lighting & Power (2. Power)

Obviously you need some source of power to keep you restaurant going. If you live in a cold region you’ll most likely need gas to heat the place in the winter. You’ll want to make sure you have a contract with some power-provider in your area far before opening day and ensure that you are connected to the power grid.

Refer here for energy providers near you.